Im-Perfectly Competitive Contract Markets for Electricity
Author | : Monica Bonacina |
Publisher | : |
Total Pages | : 44 |
Release | : 2008 |
ISBN-10 | : OCLC:1290304802 |
ISBN-13 | : |
Rating | : 4/5 (02 Downloads) |
Book excerpt: Notwithstanding academic and regulatory interests as well as empirical evidence, to date the effect of contracts on competition in electricity markets is a very controversial issue. We suggest an original approach to shed light on this debate. Modeling competition by mean of conjectural variations we demonstrate that anti-competitive effects follow the upsurge of discrimination practices. Altering the time distribution of the perfect arbitrage constraint (i.e. ex-post in spite of ex-ante) we put a bridge between IO and financial models on price manipulation. Endogenizing forward demand we provide a rationale for shifting dominant attitudes to forward markets. Finally, studying sequential choices we balance quantity and price competition with Stackelberg leadership. Simulations and qualitative estimates support our findings.