Demand Elasticity and Market Power in the Spanish Electricity Market
AbstractIn this paper we check whether generators' bid behavior at the Spanish wholesale electricity market is consistent with the hypothesis of pro?fit maximization on their residual demands. Using OMEL data, we ?find the arc-elasticity of the residual demand around the system marginal price. The results suggest that the larger ?firms are not actually pro?fit-maximizing on their residual demands while smaller generators' behavior is consistent with profit maximization. We argue how the regulatory environment may drive these results. Finally, we repeat the analysis for the ?first session of the intra-day market where presumably ?firms may not have the same incentives as in the day-ahead market
Download InfoIf 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.
Bibliographic InfoPaper provided by Department of Business Economics, Universitat Autonoma de Barcelona in its series Working Paper with number 200606.
Date of creation: Jul 2006
Date of revision:
Contact details of provider:
Postal: 08193 Bellaterra (Cerdanyola del Vallès)
Phone: 34 93 581 1209
Fax: 34 93 581 2555
Web page: http://webs2002.uab.es/dep-economia-empresa/
More information through EDIRC
market power; electricity market; residual demand elasticity; pro?fit maximization;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-18 (All new papers)
- NEP-COM-2006-11-18 (Industrial Competition)
- NEP-ENE-2006-11-18 (Energy Economics)
- NEP-IND-2006-11-18 (Industrial Organization)
- NEP-MIC-2006-11-18 (Microeconomics)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral 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: (Armando Lloro Ayuso) The email address of this maintainer does not seem to be valid anymore. Please ask Armando Lloro Ayuso to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.