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Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden

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  • Erik Lundin

Abstract

I examine the anticompetitive effects of joint ownership by analyzing the operation of three Swedish nuclear plants. I formulate a model of optimal maintenance allocation given three behavioral assumptions: i) maximal collusion, where all owners’ profits on both nuclear and other output are jointly maximized; ii) Cournot competition, where the majority owners’ profits on both nuclear and other output are maximized; and iii) a divested solution, where all owners’ profits on nuclear output are maximized. Maximal collusion is only achieved during the summer, when regulatory oversight is less strict. During the winter, data is instead consistent with the divested solution.

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  • Erik Lundin, 2021. "Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden," Journal of Industrial Economics, Wiley Blackwell, vol. 69(3), pages 485-536, September.
  • Handle: RePEc:bla:jindec:v:69:y:2021:i:3:p:485-536
    DOI: 10.1111/joie.12271
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    Cited by:

    1. Persson, Lars & Tangerås, Thomas, 2018. "Transmission Network Investment across National Borders: The Liberalized Nordic Electricity Market," Working Paper Series 1242, Research Institute of Industrial Economics.
    2. Azar, José & Schmalz, Martin & Tecu, Isabel, 2017. "Anti-Competitive Effects of Common Ownership," IESE Research Papers D/1169, IESE Business School.
    3. Lundin, Erik & Tangerås, Thomas P., 2020. "Cournot competition in wholesale electricity markets: The Nordic power exchange, Nord Pool," International Journal of Industrial Organization, Elsevier, vol. 68(C).

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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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