A theory advanced in regulatory hearings holds that market performance will be improved if one side of the market is forced to publicly reveal preferences. For example, wholesale electricity producers claim that retail electricity consumers would pay lower prices if wholesale public utility demand is disclosed to producers. Experimental markets studied here featured decentralized, privately negotiated contracts, typical of the wholesale electricity markets. Two conclusions emerge: (1) such markets generally converge to the competitive equilibrium and (2) forced disclosure works to the disadvantage of the disclosing side. Information disclosure would result in higher wholesale and thus higher retail electricity prices. (JEL L50, L94, D43) Copyright 2005, Oxford University Press.
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Article provided by Oxford University Press in its journal Economic Inquiry.
Volume (Year): 43 (2005) Issue (Month): 4 (October) Pages: 699-714 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: L50 - Industrial Organization - - Regulation and Industrial Policy - - - General L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection