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Market power in the Spanish electricity auction

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  • Aitor Ciarreta
  • María Espinosa

Abstract

In the context of the recent electricity market reforms in Europe and the US, we evaluate the performance of the Spanish pool. Our method is not based on price-cost estimates but rather on the different behavior of operators with higher market power as compared to the behavior of more competitive operators. Our results indicate that the two larger operators in the market are able to increase prices by a significant amount as compared to the situation in which each plant is run independently.
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Suggested Citation

  • Aitor Ciarreta & María Espinosa, 2010. "Market power in the Spanish electricity auction," Journal of Regulatory Economics, Springer, vol. 37(1), pages 42-69, February.
  • Handle: RePEc:kap:regeco:v:37:y:2010:i:1:p:42-69
    DOI: 10.1007/s11149-009-9102-7
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    More about this item

    Keywords

    Market power; Electricity market; L11; L13; L51;
    All these keywords.

    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

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