Welfare effects of vertical integration in energy distribution
AbstractThis paper analyses the welfare effects of vertical integration of networks and trade in energy markets. Vertical integration reduces the effect of double marginalisation, thus increasing welfare. On the other hand, vertical integration hinders equal competition, rendering the vertically integrated supplier a competitive advantage. We find that the net effect of vertical integration is beneficial to welfare if firms are symmetric, but the effect is ambiguous in the probably more relevant situation where the non-network firm has a cost advantage.
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 CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memorandum with number 43.
Date of creation: Jul 2002
Date of revision:
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- de Bijl,Paul & Peitz,Martin, 2003.
"Regulation and Entry into Telecommunications Markets,"
Cambridge University Press, number 9780521808378, November.
- de Bijl,Paul & Peitz,Martin, 2008. "Regulation and Entry into Telecommunications Markets," Cambridge Books, Cambridge University Press, number 9780521066631, November.
- Harrison, Mark & Kline, J. Jude, 2001.
"Quantity competition with access fees,"
International Journal of Industrial Organization,
Elsevier, vol. 19(3-4), pages 345-373, March.
- Mark Lijesen, 2002. "End user prices in liberalised energy markets," CPB Discussion Paper 16, CPB Netherlands Bureau for Economic Policy Analysis.
- Heikki Kemppi & Adriaan Perrels, 2003. "Liberalised Electricity Markets - Strengths and Weaknesses in Finland and Nordpool," Research Reports 97, Government Institute for Economic Research Finland (VATT).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.