n order to analyze competition in gas markets, an intermediate activity of storage is included in a classical model of vertical relations. In that case, firms can inject or withdraw strategically natural gas resource. The access to the storage facility can deteriore the welfare since it incites the vertically integrated firms (production and distribution) to withdraw strategically. This incentive is reduced by vertical integration between storage and distribution. Thus it improves the social welfare.
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Article provided by Economics Bulletin in its journal Economics Bulletin.
Find related papers by JEL classification: L5 - Industrial Organization - - Regulation and Industrial Policy Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
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