A Market Screening Model for Price Inconstancies: Empirical Evidence from German Electricity Markets
AbstractIn this paper, we develop a market screening model to detect inconstancies in price changes. Although there is a long history of industrial organization research of collusion, price setting behavior, and conduct - a robust model to detect structural changes in market structure was missing so far. Our non-parametric approach closes this gap and can be used as a tentative warning system for emerging collusions. Based on the theoretical and empirical results from previous research, we describe requirements of screenings, develop a model, and illustrate our approach with a short market simulation. Finally, we apply the model to the German electricity market. According to our results, between 2001 and 2011 energy suppliers appear to be successful in controlling the market price for several phases.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1274.
Length: 26 p.
Date of creation: 2013
Date of revision:
Market screening; collusion; competition policy; energy markets;
Find related papers by JEL classification:
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
- NEP-ENE-2013-03-16 (Energy Economics)
- NEP-IND-2013-03-16 (Industrial Organization)
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