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Using restructured electricity supply industries to understand oligopoly industry outcomes

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  • Wolak, Frank A.

Abstract

This paper argues that many determinants of generic oligopoly market outcomes can be studied in bid-based wholesale electricity markets under much weaker assumptions than in other oligopoly industries because of their rich data, regulatory history, and clearly specified market rules. These methods are compared to those used in existing studies of oligopolistic industries where the best data available are market-clearing prices and quantities and demand and cost shifters. The extent to which the methods used in bid-based wholesale electricity markets generalize conventional methods is explained in detail and major applications of these techniques are summarized. Lessons from the study of wholesale electricity markets for the monitoring and design of other oligopolistic markets are also discussed.

Suggested Citation

  • Wolak, Frank A., 2010. "Using restructured electricity supply industries to understand oligopoly industry outcomes," Utilities Policy, Elsevier, vol. 18(4), pages 227-246, December.
    • Handle: RePEc:eee:juipol:v:18:y:2010:i:4:p:227-246
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    Cited by:

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    2. Brown, David P. & Eckert, Andrew, 2021. "Analyzing firm behavior in restructured electricity markets: Empirical challenges with a residual demand analysis," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    3. Wolak, Frank A., 2015. "Measuring the competitiveness benefits of a transmission investment policy: The case of the Alberta electricity market," Energy Policy, Elsevier, vol. 85(C), pages 426-444.
    4. Brown, David P. & Eckert, Andrew & Shaffer, Blake, 2023. "Evaluating the impact of divestitures on competition: Evidence from Alberta’s wholesale electricity market," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    5. Daisy Shen & Qing Yang, . "Electricity Market Regulatory Reform and Competition – Case Study of the New Zealand Electricity Market," Chapters, in: Yanrui Wu & Xunpeng Shi & Fukunari Kimura (ed.), Energy Market Integration in East Asia: Theories, Electricity Sector and Subsidies, chapter 6, pages 103-140, Economic Research Institute for ASEAN and East Asia (ERIA).
    6. Bosco, Bruno & Parisio, Lucia & Pelagatti, Matteo, 2012. "Strategic bidding in vertically integrated power markets with an application to the Italian electricity auctions," Energy Economics, Elsevier, vol. 34(6), pages 2046-2057.
    7. Bosco, Bruno & Parisio, Lucia & Pelagatti, Matteo, 2013. "Price-capping in partially monopolistic electricity markets with an application to Italy," Energy Policy, Elsevier, vol. 54(C), pages 257-266.

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