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What’s Happening to the European Electricity Market?

Author

Listed:
  • Isabel Soares
  • Andres Faina
  • Jose Lopez
  • Laura Varela-Candamio

Abstract

This paper deals with market power and information issues in the ongoing process of the European Electricity Market. We present a regulatory game played among the key group of utilities, the customers and the regulatory authority. The development of the game allows us to state for a clear commitment to entry freedom reducing the informational strategic advantage of incumbents. As the assumption of such a commitment involves another game, we develop it and we conclude that the liberalisation of entry is also a key factor for credibility and effectiveness of flexible regulation and tariffs reduction as well.

Suggested Citation

  • Isabel Soares & Andres Faina & Jose Lopez & Laura Varela-Candamio, 2012. "What’s Happening to the European Electricity Market?," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 145-156.
    • Handle: RePEc:ers:journl:v:xv:y:2012:i:4:p:145-156
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    File URL: http://www.ersj.eu/repec/ers/papers/12_4_p7.pdf
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    References listed on IDEAS

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    1. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 1-12.
    2. Claude Crampes and Natalia Fabra, 2005. "The Spanish Electricity Industry: Plus ca change," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 127-154.
    3. Fabra, Natalia & Toro, Juan, 2005. "Price wars and collusion in the Spanish electricity market," International Journal of Industrial Organization, Elsevier, vol. 23(3-4), pages 155-181, April.
    4. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
    5. Abreu, Dilip & Pearce, David & Stacchetti, Ennio, 1986. "Optimal cartel equilibria with imperfect monitoring," Journal of Economic Theory, Elsevier, vol. 39(1), pages 251-269, June.
    6. Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
    7. Green, Richard J & Joanne Evans, 2003. "Why did British electricity prices fall after 1998?," Royal Economic Society Annual Conference 2003 92, Royal Economic Society.
    8. Michael G. Pollitt, 2009. "Electricity Liberalisation in the European Union: A Progress Report," Working Papers EPRG 0929, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    9. J. Gregory Sidak & William Baumol, 1994. "Toward Competition in Local Telephony," Books, American Enterprise Institute, number 52984, September.
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    Cited by:

    1. Viktoria Sihua & Anxo Calvo-Silvosa & Ilya Starodumov, 2015. "An Approach to the Analysis of Strategic Development Trend in the Electricity Production Regarding the Energy Sector Framework: The Ukrainian and Spanish Cases," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 45-78.

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    More about this item

    Keywords

    Electricity Market; Competition; Regulation Games;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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