Welfare effects of vertical integration in energy distribution
This paper analyses the welfare effects of vertical integration of networks and trade in energy markets. Vertical integration reduces the effect of double marginalisation, thus increasing welfare. On the other hand, vertical integration hinders equal competition, rendering the vertically integrated supplier a competitive advantage. We find that the net effect of vertical integration is beneficial to welfare if firms are symmetric, but the effect is ambiguous in the probably more relevant situation where the non-network firm has a cost advantage.
|Date of creation:||Jul 2002|
|Date of revision:|
|Contact details of provider:|| Postal: Postbus 80510, 2508 GM Den Haag|
Phone: (070) 338 33 80
Fax: (070) 338 33 50
Web page: http://www.cpb.nl/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Schmalensee, 1981.
"Monopolistic Two-Part Pricing Arrangements,"
Bell Journal of Economics,
The RAND Corporation, vol. 12(2), pages 445-466, Autumn.
- Harrison, Mark & Kline, J. Jude, 2001.
"Quantity competition with access fees,"
International Journal of Industrial Organization,
Elsevier, vol. 19(3-4), pages 345-373, March.
When requesting a correction, please mention this item's handle: RePEc:cpb:memodm:43. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.