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Hayek and the Texas blackout

Author

Listed:
  • Stephen Littlechild

    (EPRG, CJBS, University of Cambridge)

  • Lynne Kiesling

    (University of Colorado-Denver)

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Stephen Littlechild & Lynne Kiesling, 2021. "Hayek and the Texas blackout," Working Papers EPRG2118, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg2118
    as

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    File URL: https://www.jbs.cam.ac.uk/wp-content/uploads/2023/12/eprg-wp2118.pdf
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    References listed on IDEAS

    as
    1. Kiesling, Lynne, 2005. "Using Economic Experiments to Test Electricity Policy," The Electricity Journal, Elsevier, vol. 18(9), pages 43-50, November.
    2. von Hayek, Friedrich August, 1989. "The Pretence of Knowledge," American Economic Review, American Economic Association, vol. 79(6), pages 3-7, December.
    3. Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.
    4. William W. Hogan, 2013. "Electricity Scarcity Pricing Through Operating Reserves," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    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)

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    Cited by:

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    More about this item

    Keywords

    Hayek; Texas blackout; scarcity pricing; retail electricity competition;
    All these 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

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