IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v37y2009i2p377-386.html
   My bibliography  Save this article

Retail competition in electricity markets

Author

Listed:
  • Defeuilley, Christophe

Abstract

The introduction of competition into retail electricity supply gave rise to great expectations. However, to date, its performance has proven less than stellar, owing primarily to the theoretical concepts underpinning this reform, which draw heavily on the Austrian school. Neither consumers' decision processes nor this sector's technical paradigm were adequately accounted for, leading to an uncorrect estimation of the expected impact of opening to competition. Short- and medium-term prospects for the evolution of retail markets must be reconsidered from the perspective of greater stability: not a generalization of competition, but rather a persistent segmentation between active and inactive clients; not a large and rapid diffusion of radical innovations in commercialisation, with the potential for undermining the incumbents' positions.

Suggested Citation

  • Defeuilley, Christophe, 2009. "Retail competition in electricity markets," Energy Policy, Elsevier, vol. 37(2), pages 377-386, February.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:2:p:377-386
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(08)00387-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
    2. Littlechild Stephen C., 2002. "Competition in Retail Electricity Supply," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(2), pages 1-26, June.
    3. Nancy L. Rose & Paul L. Joskow, 1990. "The Diffusion of New Technologies: Evidence from the Electric Utility Industry," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 354-373, Autumn.
    4. Littlechild, S.C., 2000. "Why We Need Electricity Retailers: A Reply to Joskow on Wholesale Spot Price pass-through," Cambridge Working Papers in Economics 0008, Faculty of Economics, University of Cambridge.
    5. Littlechild, Stephen, 2006. "Competition and contracts in the Nordic residential electricity markets," Utilities Policy, Elsevier, vol. 14(3), pages 135-147, September.
    6. Nicolai J. Foss & Peter G. Klein, 2004. "Entrepreneurshoip and the Economic Theory of the Firm Any Gains from Trade?," DRUID Working Papers 04-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    7. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 375-394.
    8. Daniel McFadden, 2006. "Free Markets and Fettered Consumers," American Economic Review, American Economic Association, vol. 96(1), pages 5-29, March.
    9. Nils-Henrik M. von der Fehr & Petter Vegard Hansen, 2010. "Electricity Retailing in Norway," The Energy Journal, , vol. 31(1), pages 25-46, January.
    10. 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.
    11. Daniel McFadden, 1986. "The Choice Theory Approach to Market Research," Marketing Science, INFORMS, vol. 5(4), pages 275-297.
    12. Yoonhee Tina Chang & Catherine Waddams Price, 2008. "Gain or Pain: Does Consumer Activity Reflect Utility Maximisation?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2008-15, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    13. Giovanni Dosi, 2000. "Sources, Procedures, and Microeconomic Effects of Innovation," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 2, pages 63-114, Edward Elgar Publishing.
    14. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
    15. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    16. Anthony Endres & Christine Woods, 2006. "Modern Theories of Entrepreneurial Behavior: A Comparison and Appraisal," Small Business Economics, Springer, vol. 26(2), pages 189-202, March.
    17. Jamasb, T. & Pollitt, M., 2005. "Deregulation and R&D in Network Industries: The Case of the Electricity Industry," Cambridge Working Papers in Economics 0533, Faculty of Economics, University of Cambridge.
    18. Littlechild, Stephen C, 2003. "Wholesale Spot Price Pass-Through," Journal of Regulatory Economics, Springer, vol. 23(1), pages 61-91, January.
    19. Jamasb,Tooraj & Nuttall,William J. & Pollitt,Michael G. (ed.), 2006. "Future Electricity Technologies and Systems," Cambridge Books, Cambridge University Press, number 9780521860499.
    20. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
    21. Chris M. Wilson & Catherine Waddams Price, 2010. "Do consumers switch to the best supplier?," Oxford Economic Papers, Oxford University Press, vol. 62(4), pages 647-668, October.
    22. Wolozin, Harold & Wolozin, Benjamin, 2007. "The unconscious in economic decision-making: Convergent voices," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(6), pages 856-864, December.
    23. Daniel McFadden, 2001. "Economic Choices," American Economic Review, American Economic Association, vol. 91(3), pages 351-378, June.
    24. Helm, Dieter, 2003. "Energy, the State, and the Market: British Energy Policy since 1979," OUP Catalogue, Oxford University Press, number 9780199262038.
    25. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    26. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
    27. Breschi, Stefano & Malerba, Franco & Orsenigo, Luigi, 2000. "Technological Regimes and Schumpeterian Patterns of Innovation," Economic Journal, Royal Economic Society, vol. 110(463), pages 388-410, April.
    28. Monica Giulietti & Catherine Waddams Price & Michael Waterson, 2005. "Consumer Choice and Competition Policy: a Study of UK Energy Markets," Economic Journal, Royal Economic Society, vol. 115(506), pages 949-968, October.
    29. Loomis, David & Malm, Eric, 1999. "Active Market Share: measuring competitiveness in retail energy markets," Utilities Policy, Elsevier, vol. 8(4), pages 213-221, December.
    Full references (including those not matched with items on IDEAS)

    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. 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. 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.
    3. Peter D. Lunn, 2013. "Telecommunications Consumers: A Behavioral Economic Analysis," Journal of Consumer Affairs, Wiley Blackwell, vol. 47(1), pages 167-189, April.
    4. Stephen Littlechild, 2019. "Promoting competition and protecting customers? Regulation of the GB retail energy market 2008–2016," Journal of Regulatory Economics, Springer, vol. 55(2), pages 107-139, April.
    5. Vesterberg, Mattias, 2018. "The effect of price on electricity contract choice," Energy Economics, Elsevier, vol. 69(C), pages 59-70.
    6. Massimo Dragotto & Marco Magnani & Paola Valbonesi, 2021. "Consumer inertia and firm incumbency in liberalised retail electricity markets: an empirical investigation," "Marco Fanno" Working Papers 0277, Dipartimento di Scienze Economiche "Marco Fanno".
    7. Boroumand, Raphaël Homayoun, 2015. "Electricity markets and oligopolistic behaviors: The impact of a multimarket structure," Research in International Business and Finance, Elsevier, vol. 33(C), pages 319-333.
    8. Nogata, Daisuke, 2022. "Determinants of household switching between natural gas suppliers: Evidence from Japan," Utilities Policy, Elsevier, vol. 76(C).
    9. Daniel McFadden, 2014. "The new science of pleasure: consumer choice behavior and the measurement of well-being," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 2, pages 7-48, Edward Elgar Publishing.
    10. Franco Malerba & Maureen McKelvey, 2020. "Knowledge-intensive innovative entrepreneurship integrating Schumpeter, evolutionary economics, and innovation systems," Small Business Economics, Springer, vol. 54(2), pages 503-522, February.
    11. Xiaoping He & David Reiner, 2015. "Why Do More British Consumers Not Switch Energy Suppliers? The Role of Individual Attitudes," Working Papers EPRG 1515, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    12. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(3), pages 455-488, June.
    13. Silvia Concettini & Anna Creti, 2013. "Liberalization of electricity retailing in Europe: coming back or going forth?," Working Papers hal-00915924, HAL.
    14. Johnsen, Tor Arnt & Olsen, Ole Jess, 2011. "Regulated and unregulated Nordic retail prices," Energy Policy, Elsevier, vol. 39(6), pages 3337-3345, June.
    15. Tim Burnett, 2014. "The Impact of Service Bundling on Consumer Switching Behaviour: Evidence from UK Communication Markets," The Centre for Market and Public Organisation 14/321, The Centre for Market and Public Organisation, University of Bristol, UK.
    16. Xiaoping He & David Reiner, 2017. "Why Consumers Switch Energy Suppliers: The Role of Individual Attitudes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 6).
    17. Gauthier Lanot & Mattias Vesterberg, 2019. "An empirical model of the decision to switch between electricity price contracts," Journal of Business Analytics, Taylor & Francis Journals, vol. 2(1), pages 24-46, January.
    18. Steven Andrew Culpepper & James Joseph Balamuta, 2017. "A Hierarchical Model for Accuracy and Choice on Standardized Tests," Psychometrika, Springer;The Psychometric Society, vol. 82(3), pages 820-845, September.
    19. Valeria Costantini & Francesco Crespi, 2015. "European enlargement policy, technological capabilities and sectoral export dynamics," The Journal of Technology Transfer, Springer, vol. 40(1), pages 25-69, February.
    20. Kemnitz Alexander, 2013. "A Simple Model of Health Insurance Competition," German Economic Review, De Gruyter, vol. 14(4), pages 432-448, December.

    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:eee:enepol:v:37:y:2009:i:2:p:377-386. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    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.