to invest compared to autarky. The investment levels remain inefficient though. With generation facilities over-investment … occurs sometimes, while systematic under-investment occurs for transportation facilities. Free-riding reduces the incentives … investment. -- regulation ; competition ; market integration ; investment ; electricity …

I model the strategic interaction between firms, that face decisions on investment, forward contracts and spot market … quantities. For an investment decision that takes place after firms have contracted forward but before firms compete on the spot … market (medium term investment), competition becomes fierce. Thus, the efficiency gains from forward trading found by Allaz …

prices, but distort consumption and investment. Market integration alleviates supply constraints, but requires costly network … reinforcement. Capacity reserves can be up- or downward distorted, but network investment is always insufficient in equilibrium …