Recovery of stranded costs is perhaps the most litigious issue encountering regulators in promoting competition in United States and European utility industries. We build a dynamic model of Cournot competition which takes into account a particular regulatory mechanism regularly employed in...

In this paper we have developed a model which analyzes price competition in the deregulated Spanish electriciy market. This model is the first to take explicitly into account the mechanism designed in the recent Spanish electricity law for settling stranded costs payments. We show that stranded...