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Vertical Integration and Market Power in Electricity Markets
Hogan, Seamus - 2019
Vertical separation of generation from electricity retailing has often been required as a condition of electricity market liberalisation. A well-developed and liquid contracts market is similarly suggested as necessary to manage the resulting wholesale market risks, which risks are further...
Persistent link: https://www.econbiz.de/10012890370
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Two tales on resale
Höffler, Felix; Schmidt, Klaus M. - 2007
In some markets vertically integrated firms sell directly to final customers hut also to independent downstream firms with whom they then compete on the downstream market. It is often argued that resellers intensify competition and benefit consumers, in particular when wholesale prices are...
Persistent link: https://www.econbiz.de/10010365855
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Collusive vertical relations
Bolatto, Stefano; Lambertini, Luca - 2017
We investigate the possibility for two vertically related firms to at least partially collude on the wholesale price over an in.nite horizon to mitigate or eliminate the e¤ects of double marginalisation, thereby avoiding contracts which might not be enforceable. We characterise alternative...
Persistent link: https://www.econbiz.de/10011674459
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Unbundling, regulation and pricing : evidence from electricity distribution
Heim, Sven; Krieger, Bastian; Liebensteiner, Mario - 2018
Unbundling of vertically integrated utilities has become an integral element in the regulation of network industries and has been implemented in many jurisdictions. The idea of separating the network, as the natural monopoly, from downstream retailing, which may be exposed to competition, is...
Persistent link: https://www.econbiz.de/10011932606
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Cost Savings from Generation and Distribution with an Application to Italian Electric Utilities
Fraquelli, Giovanni; Piacenza, Massimiliano; Vannoni, Davide - 2004
In the last decade a new regulatory framework for electric utilities, aiming at a gradual liberalization of the sector, has been set in Europe. The promotion of competition among generators implies the need to separate power generation from downstream transmission and distribution activities....
Persistent link: https://www.econbiz.de/10014069881
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Vertical Arrangements, Market Structure, and Competition : An Analysis of Restructured U.S. Electricity Markets
Bushnell, James; Mansur, Erin T.; Saravia, Celeste - 2005
This paper examines the relative importance of horizontal market structure, auction design, and vertical arrangements in explaining electricity prices. We define vertical arrangements as either vertical integration or long term contracts whereby retail prices are determined prior to wholesale...
Persistent link: https://www.econbiz.de/10014027930
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Vertical structure and the risk of rent extraction in the electricity industry
Boom, Anette; Bühler, Stefan - 2018 - This draft: August 23, 2018
This paper studies how competition and vertical structure jointly determine generating capacities, retail prices, and welfare in the electricity industry. Analyzing a model in which demand is uncertain and retailers must commit to retail prices before they buy electricity in the wholesale...
Persistent link: https://www.econbiz.de/10012023903
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Vertical integration and downstream collusion
Biancini, Sara; Ettinger, David - 2016
stakes of collusion. On the other hand, it creates an asymmetry between the integrated firm and the unintegrated competitors … cooperative equilibrium, which potentially harms collusion. As we show, the optimal collusive profit-sharing agreement takes care … the asymmetries in the non cooperative state. As a result, vertical integration generally favors collusion. …
Persistent link: https://www.econbiz.de/10011482885
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Dynamic entry in vertically differentiated markets
Auer, Raphael A.; Sauré, Philip - 2016
We develop a model of vertical innovation in which firms incur a market entry cost and choose a unique level of quality. Once established, firms compete for market shares, selling to consumers with heterogeneous tastes for quality. The equilibrium of the pricing game exists and is unique within...
Persistent link: https://www.econbiz.de/10011547909
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Strategic Vertical Market Structure with Opaque Products
Tappata, Mariano E. - 2012
This paper studies the strategic introduction of an opaque channel by incumbent firms. We endow a circular city model with an intermediary that sells lotteries (opaque products) over goods produced by upstream firms. Compared to the benchmark model (Salop, 1979), opaque intermediation creates...
Persistent link: https://www.econbiz.de/10013112801