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Retail Power Market Competition with Endogenous Entry Decision-An Auction Data Analysis

Author

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  • Nobuhiro Hosoe

    (National Graduate Institute for Policy Studies)

  • Shingo Takagi

    (Graduate School of Economics and Business Administration, Hokkaido University)

Abstract

Deregulation in the electric power industry has been aimed at promoting competition and thereby enhancing the industry's efficiency. We use the auction data of public power procurements to study the impact of the reform on the retail power market in Japan. We quantify this impact by measuring a decline in power charges, controlling for the endogeneity bias caused by the entrants' bid-submission decisions. Our results suggest that power charges would decline by about 0.48 yen/kWh on average when two or more providers bid at an auction.

Suggested Citation

  • Nobuhiro Hosoe & Shingo Takagi, 2011. "Retail Power Market Competition with Endogenous Entry Decision-An Auction Data Analysis," GRIPS Discussion Papers 11-01, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:11-01
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    Cited by:

    1. Xiaoli Wang & Yun Liu & Yanbing Ju, 2018. "Sustainable Public Procurement Policies on Promoting Scientific and Technological Innovation in China: Comparisons with the U.S., the UK, Japan, Germany, France, and South Korea," Sustainability, MDPI, vol. 10(7), pages 1-27, June.
    2. Simone Di Leo & Marta Chicca & Cinzia Daraio & Andrea Guerrini & Stefano Scarcella, 2022. "A Framework for the Analysis of the Sustainability of the Energy Retail Market," Sustainability, MDPI, vol. 14(12), pages 1-28, June.
    3. Shigeharu Okajima & Hiroko Okajima, 2016. "Impact of environmental regulation and the 2011 earthquake on the Japanese electricity industry," Journal of Regulatory Economics, Springer, vol. 49(2), pages 223-249, April.
    4. Nakajima, Tadahiro, 2013. "Inefficient and opaque price formation in the Japan Electric Power Exchange," Energy Policy, Elsevier, vol. 55(C), pages 329-334.
    5. Lei Shen & Xi Zhang & Hongda Liu & Pinbo Yao, 2021. "Research on the Economic Development Threshold Effect of the Employment Density of the Shanghai Consumer Goods Industry in the Context of New Manufacturing, Based on the Experience Comparison with Int," Mathematics, MDPI, vol. 9(9), pages 1-19, April.

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    More about this item

    Keywords

    electric power industry; auction data; public procurement; sample selection bias;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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