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Pricing behaviour under competition in the UK electricity supply industry


  • Monica Giulietti
  • Jesus Otero
  • Michael Waterson


This paper investigates the evolution of electricity prices for domestic customers in the UK following the introduction of competition. The empirical analysis is based on a panel data set containing detailed information about electricity supply prices over the period 1999 to 2006. The analysis examines the pricing patterns and draws inferences concerning the benefits of incumbency and the gains from search. The econometric analysis of persistence and price dispersion provides rather limited support for the view that the market is becoming more competitive and also indicates that there remain significant potential benefits to consumers from searching alternative suppliers. Copyright 2010 Oxford University Press 2009 All rights reserved, Oxford University Press.

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  • Monica Giulietti & Jesus Otero & Michael Waterson, 2010. "Pricing behaviour under competition in the UK electricity supply industry," Oxford Economic Papers, Oxford University Press, vol. 62(3), pages 478-503, July.
  • Handle: RePEc:oup:oxecpp:v:62:y:2010:i:3:p:478-503

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    References listed on IDEAS

    1. Morgan, John & Orzen, Henrik & Sefton, Martin, 2006. "An experimental study of price dispersion," Games and Economic Behavior, Elsevier, vol. 54(1), pages 134-158, January.
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    6. Giulietti, Monica & Otero, Jesus & Smith, Jeremy, 2006. "Testing for stationarity in heterogeneous panel data in the presence of cross section dependence," The Warwick Economics Research Paper Series (TWERPS) 758, University of Warwick, Department of Economics.
    7. Goldberg, Pinelopi K. & Verboven, Frank, 2005. "Market integration and convergence to the Law of One Price: evidence from the European car market," Journal of International Economics, Elsevier, vol. 65(1), pages 49-73, January.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Nils-Henrik M. von der Fehr & Petter Vegard Hansen, 2010. "Electricity Retailing in Norway," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 25-46.
    2. Xiaoping He & David Reiner, 2015. "Why Do More British Consumers Not Switch Energy Suppliers? The Role of Individual Attitudes," Cambridge Working Papers in Economics 1525, Faculty of Economics, University of Cambridge.
    3. repec:eee:eneeco:v:67:y:2017:i:c:p:355-365 is not listed on IDEAS
    4. Silvia Concettini & Anna Créti, 2013. "Liberalization of electricity retailing in Europe: coming back or going forth?," Working Papers hal-00915924, HAL.
    5. Wilson, Chris M., 2012. "Market frictions: A unified model of search costs and switching costs," European Economic Review, Elsevier, vol. 56(6), pages 1070-1086.
    6. Poupeau, François-Mathieu, 2009. "Domestic customers and reform of the gas sector. An organisational sociology perspective," Energy Policy, Elsevier, vol. 37(12), pages 5385-5392, December.
    7. repec:eee:enepol:v:108:y:2017:i:c:p:467-473 is not listed on IDEAS
    8. repec:aen:journl:ej38-6-xiaoping is not listed on IDEAS
    9. Daglish, Toby, 2016. "Consumer governance in electricity markets," Energy Economics, Elsevier, vol. 56(C), pages 326-337.
    10. Defeuilley, Christophe, 2009. "Retail competition in electricity markets," Energy Policy, Elsevier, vol. 37(2), pages 377-386, February.
    11. Wilson, Chris M, 2009. "Market Frictions: A Unified Model of Search and Switching Costs," MPRA Paper 13672, University Library of Munich, Germany.
    12. Lehto, Eero, 2011. "Electricity prices in the Finnish retail market," Energy Policy, Elsevier, vol. 39(4), pages 2179-2192, April.
    13. Daglish, Toby, 2015. "Consumer Governance in Electricity Markets," Working Paper Series 4183, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    14. Brown, David P. & Eckert, Andrew, 2017. "The Effect of Default Rates on Retail Competition and Pricing Decisions of Competitive Retailers: The Case of Alberta," Working Papers 2017-6, University of Alberta, Department of Economics.

    More about this item

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • 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
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models


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