Uncertain bidding zone configurations: the role of expectations for transmission and generation capacity expansion

•We propose a stochastic multilevel model with uncertainty about future bidding zones.•If potential bidding zones provide better regional price signals, welfare gains occur.•Welfare gains materialize even if the change does not actually take place.•Gains of an actual change of bidding zones are lower due to anticipatory effects.•We show distributional effects between producers, consumers and technologies.