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Mixed Oligopoly and Market Power Mitigation: Evidence from the Colombian Wholesale Electricity Market

Author

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  • Carlos Suarez

    (Department of Econometrics, Statistics and Applied Economics, Research Group on Governments and Markets, University of Barcelona, Avinguda Diagonal 690, 08034 Barcelona, Tower 6 Floor 3. Engineering Department, Research Group on Energy, Environment and Development, Jorge Tadeo Lozano University.)

Abstract

Using information on price bids in wholesale electricity pools and empirical techniques described in the literature on electricity markets, this study identifies the market power mitigation effect of public firms in the Colombian market. The results suggest that while private firms exercise less market power than is predicted by a profit-maximization model, there are marked differences between private and public firms in their exercise of unilateral market power. These findings support the hypothesis of the market power mitigation effect of public firms.

Suggested Citation

  • Carlos Suarez, 2021. "Mixed Oligopoly and Market Power Mitigation: Evidence from the Colombian Wholesale Electricity Market," IREA Working Papers 202101, University of Barcelona, Research Institute of Applied Economics, revised Jan 2021.
    • Handle: RePEc:ira:wpaper:202101
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    File URL: http://www.ub.edu/irea/working_papers/2021/202101.pdf
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    References listed on IDEAS

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    Cited by:

    1. Brown, David P. & Eckert, Andrew & Shaffer, Blake, 2023. "Evaluating the impact of divestitures on competition: Evidence from Alberta’s wholesale electricity market," International Journal of Industrial Organization, Elsevier, vol. 89(C).

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    More about this item

    Keywords

    Electricity Markets; Market Power; Privatization; Mixed Oligopoly; Regulatory Intervention. JEL classification: L13; L94; C10.;
    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

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