Strategic bidding of quantities in uniform price auction - conjectured supply function approach

We have followed a variation of conjectured supply function approach, whereby each generating company conjectures how rival firms adjust their supplies in response to price changes. We have shown that rather than conjecturing how all rival firms adjust their supplies, it is only necessary to assume the resulting market clearing price and its slope as it will contain in a synthetic form all the conjectured responses of all the competitors. This approach allows to find equilibrium even if the demand is price inelastic. Generally it is better for generators to err on the positive side and assume that other generators bid strategically too. A simple 3-generator example was used to illustrate the methodology.