We examine the effects of reorganizing electricity markets on ca- pacity investments, retail prices and welfare when … wholesale trade, and (iii) sep- arated duopoly with wholesale trade. Assuming that wholesale prices can react to changes in … retail prices (but not vice versa), we find that generators install sufficient capacity to serve retail demand in each market …

We study the role of vertical structure in determining generating capacities and retail prices in the electricity … prices are such that welfare is highest (lowest) under separated (integrated) duopoly. The driving force behind this result … that vertical structure plays an important role in determining generating capacities and retail prices. …

welfare in the electricity industry. Analyzing a model in which demand is uncertain and retailers must commit to retail prices …This paper studies how competition and vertical structure jointly determine generating capacities, retail prices, and … before they buy electricity in the wholesale market, we show that welfare is highest if competition in generation and …