Advanced Search
MyIDEAS: Login

Understanding Competitive Pricing and Market Power in Wholesale Electricity Markets

Contents:

Author Info

  • Borenstein, Severin

Abstract

Discussions of competition in restructured electricity markets have revealed many misunderstandings about the definition, diagnosis, and implications of market power. In this paper, I attempt to clarify the meaning of market power and show how it can be distinguished from competitive pricing in markets with significant short-run supply constraints. I also address two common myths about market power: (a) that it is present in all markets and (b) that it must be present in order for firms to remain profitable in markets with significant fixed costs. I conclude by arguing that, while a finding of market power in an industry does not necessarily indicate that government intervention is warranted, such analysis is an important part of creating sound public policy.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6VSS-40YSBRN-6/2/5e8f20ae3402ca3d509fddef4976cca1
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal The Electricity Journal.

Volume (Year): 13 (2000)
Issue (Month): 6 (July)
Pages: 49-57

as in new window
Handle: RePEc:eee:jelect:v:13:y:2000:i:6:p:49-57

Contact details of provider:
Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/600875/description#description

Order Information:
Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
Web: https://shop.elsevier.com/OOC/InitController?id=600875&ref=600875_01_ooc_1&version=01

Related research

Keywords:

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Goto, Mika & Karolyi, G. Andrew, 2004. "Understanding Electricity Price Volatility within and across Markets," Working Paper Series 2004-12, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
  2. Rafael Macatangay, 2002. "Tacit Collusion in the Frequently Repeated Multi-Unit Uniform Price Auction for Wholesale Electricity in England and Wales," European Journal of Law and Economics, Springer, vol. 13(3), pages 257-273, May.
  3. Lynne Kiesling & Bart Wilson, 2007. "An experimental analysis of the effects of automated mitigation procedures on investment and prices in wholesale electricity markets," Journal of Regulatory Economics, Springer, vol. 31(3), pages 313-334, June.
  4. Severin Borenstein, 2002. "The Trouble With Electricity Markets: Understanding California's Restructuring Disaster," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 191-211, Winter.
  5. Macatangay, Rafael Emmanuel A., 2001. "Market definition and dominant position abuse under the new electricity trading arrangements in England and Wales," Energy Policy, Elsevier, vol. 29(5), pages 337-340, April.
  6. Bunn, Derek W. & Day, Christopher J., 2009. "Computational modelling of price formation in the electricity pool of England and Wales," Journal of Economic Dynamics and Control, Elsevier, vol. 33(2), pages 363-376, February.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jelect:v:13:y:2000:i:6:p:49-57. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.