IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/2149.html

Hayek and the Texas blackout

Author

Listed:
  • Littlechild, S.
  • Kiesling, L.

Abstract

Was the Texas blackout a market failure or regulatory failure? The economist Hayek has been adduced in support of both views. Hayek would have approved the competitive Texas system, including ERCOT. His likely view on the scarcity pricing framework is less clear, and the recent regulatory implementation of the "circuit breaker" was problematic. There is now a need to revise the scarcity pricing framework in the light of recent events, and to reflect ever-changing market conditions.

Suggested Citation

  • Littlechild, S. & Kiesling, L., 2021. "Hayek and the Texas blackout," Cambridge Working Papers in Economics 2149, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2149
    Note: sl304
    as

    Download full text from publisher

    File URL: https://www.econ.cam.ac.uk/sites/default/files/publication-cwpe-pdfs/cwpe2149.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:aen:eeepjl:2_2_a04 is not listed on IDEAS
    2. Kiesling, Lynne, 2005. "Using Economic Experiments to Test Electricity Policy," The Electricity Journal, Elsevier, vol. 18(9), pages 43-50, November.
    3. von Hayek, Friedrich August, 1989. "The Pretence of Knowledge," American Economic Review, American Economic Association, vol. 79(6), pages 3-7, December.
    4. Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.
    5. Boettke, Peter & Coyne, Christopher (ed.), 2015. "The Oxford Handbook of Austrian Economics," OUP Catalogue, Oxford University Press, number 9780199811762.
    6. Andrew N. Kleit & L. Lynne Kiesling, 2009. "Electricity Restructuring: The Texas Story," Books, American Enterprise Institute, number 50474, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    2. Kazi Sifatul Islam & Samiul Hasan & Tamal Chowdhury & Hemal Chowdhury & Sadiq M. Sait, 2022. "Outage Survivability Investigation of a PV/Battery/CHP System in a Hospital Building in Texas," Sustainability, MDPI, vol. 14(22), pages 1-14, November.
    3. Tomasz Sieńko & Jerzy Szczepanik, 2025. "EU Energy Markets and Renewable Energy Sources—Are We Waiting for a Crisis?," Energies, MDPI, vol. 18(15), pages 1-19, August.
    4. Nan, Lu & Hu, Siduo & Chen, Yuhang & He, Chuan, 2025. "Critical transmission cut-sets identification within power grids," Reliability Engineering and System Safety, Elsevier, vol. 264(PA).
    5. Prakash, Abhijith & Bruce, Anna & MacGill, Iain, 2025. "The scheduling role of future pricing information in electricity markets with rising deployments of energy storage: An Australian National Electricity Market case study," Energy Economics, Elsevier, vol. 142(C).
    6. Danielian, Armen, 2025. "Regulating electricity spot markets during extreme events: The 2021 Texas case," Utilities Policy, Elsevier, vol. 93(C).
    7. Biggar, Darryl R. & Hesamzadeh, Mohammad Reza, 2024. "Crises in Texas and Australia: Failures of energy-only markets or unforeseen consequences of price caps?," Energy Economics, Elsevier, vol. 137(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269.
    2. Burak Erkut, 2020. "From Digital Government to Digital Governance: Are We There Yet?," Sustainability, MDPI, vol. 12(3), pages 1-13, January.
    3. Kolev, Stefan, 2021. "When liberty presupposes order: F. A. Hayek's learning ordoliberalism," Freiburg Discussion Papers on Constitutional Economics 21/2, Walter Eucken Institut e.V..
    4. Jayme Lemke & John Kroencke, 2020. "Methodological confusions and the science wars in economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(1), pages 87-106, March.
    5. Daniel Sutter & Daniel J. Smith, 2017. "Coordination in disaster: Nonprice learning and the allocation of resources after natural disasters," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(4), pages 469-492, December.
    6. Philip Booth, 2017. "Are Expert Economic Forecasters Socially Useless?," Economic Affairs, Wiley Blackwell, vol. 37(3), pages 436-440, October.
    7. Andor, Mark A. & Frondel, Manuel & Schmidt, Christoph M. & Simora, Michael & Sommer, Stephan, 2015. "Klima- und Energiepolitik in Deutschland: Dissens und Konsens," RWI Materialien 91, RWI - Leibniz-Institut für Wirtschaftsforschung.
    8. Paul Simshauser, 2025. "Are gas turbines 'bankable' in transitioning energy-only markets?," Working Papers EPRG2601, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    9. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    10. Anz, Michael, 2009. "Effekte regionalisierter Innovationspolitik auf die Entstehung von Clustern: Eine multidimensionale Betrachtung der Biotechnologieoffensive des Freistaates Sachsen," Arbeitsmaterial der ARL: Aufsätze, in: Dannenberg, Peter & Köhler, Hadia & Lang, Thilo & Utz, Judith & Zakirova, Betka & Zimmermann, Thomas (ed.), Innovationen im Raum - Raum für Innovationen: 11. Junges Forum der ARL, 21. bis 23. Mai 2008 in Berlin, volume 127, pages 91-100, ARL – Akademie für Raumentwicklung in der Leibniz-Gemeinschaft.
    11. Heo, Deung-Yong & Tesfatsion, Leigh, 2013. "Standardized Contracts with Swing for the Market-Supported Procurement of Energy and Reserve: Illustrative Examples," Staff General Research Papers Archive 36747, Iowa State University, Department of Economics.
    12. Dirk Ulbricht & Konstantin A. Kholodilin & Tobias Thomas, 2017. "Do Media Data Help to Predict German Industrial Production?," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 36(5), pages 483-496, August.
    13. Shastitko, Andrey & Golovanova, Svetlana, 2016. "Meeting blindly… Is Austrian economics useful for dynamic capabilities theory?," Russian Journal of Economics, Elsevier, vol. 2(1), pages 86-110.
    14. Silvestri, Paolo, 2012. "The ideal of good government in Luigi Einaudi's Thought and Life: Between Law and Freedom," MPRA Paper 55351, University Library of Munich, Germany.
    15. Pär Holmberg & Robert A. Ritz, 2021. "Optimal Capacity Mechanisms for Competitive Electricity Markets," The Energy Journal, , vol. 42(1_suppl), pages 1-34, June.
    16. Christina Elberg, 2014. "Cross-Border Effects of Capacity Mechanisms in Electricity Markets," EWI Working Papers 2014-11, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    17. Giuseppe Garofalo, 2014. "Irreducible complexities: from Gödel and Turing to the paradigm of Imperfect Knowledge Economics," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(6), pages 3463-3474, November.
    18. Growitsch, Christian & Just, Lisa & Pedell, Burkhard, 2014. "Risk Assessment of Investments in Energy-only and Capacity Markets," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 68(3), pages 181-188.
    19. Kim, Hyunsook & Kim, Sung-Soo, 2012. "The resource adequacy scheme in the Korean electricity market," Energy Policy, Elsevier, vol. 47(C), pages 133-144.
    20. de Soto Jesus Huerta, 1998. "The Ongoing Methodenstreit of The Austrian School," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 8(1), pages 75-114, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cam:camdae:2149. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.