By exercising market power, a firm will distort the production, and therefore the emissions decisions, of all firms in the market. This paper examines how the welfare implications of strategic behavior depend on how pollution is regulated. Under an emissions tax, aggregate emissions do not...

We conduct a social cost-benefit analysis of wholesale electricity market restructuring and competition in New England. A counter-factual investment path is formulated which characterizes how the wholesale power system might have evolved in New England under continued regulation. The investment...