restricted entry in arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the … model predictions using micro-data from the Iberian electricity market. We show that the observed price differences and firm … behavior are consistent with the model. Finally, we quantify the welfare effects of arbitrage using a structural model. In the …

Spain and some of the Scandinavian countries have recently given to the consumers the possibility to face the spot prices … choose between fixed tariffs and the wholesale prices. The model is calibrated on a real market case - Spain - where since …