Im-Perfectly Competitive Contract Markets for Electricity

44 Pages Posted: 4 Feb 2008 Last revised: 18 Apr 2008

See all articles by Monica Bonacina

Monica Bonacina

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Anna Creti

Université Paris Ouest - Nanterre, La Défense - EconomiX; Ecole Polytechnique, Paris - Laboratoire d'Econometrie

Federica Manca

affiliation not provided to SSRN

Date Written: Jannuary 2008

Abstract

Notwithstanding academic and regulatory interests as well as empirical evidence, to date the effect of contracts on competition in electricity markets is a very controversial issue. We suggest an original approach to shed light on this debate. Modeling competition by mean of conjectural variations we demonstrate that anti-competitive effects follow the upsurge of discrimination practices. Altering the time distribution of the perfect arbitrage constraint (i.e. ex-post in spite of ex-ante) we put a bridge between IO and financial models on price manipulation. Endogenizing forward demand we provide a rationale for shifting dominant attitudes to forward markets. Finally, studying sequential choices we balance quantity and price competition with Stackelberg leadership. Simulations and qualitative estimates support our findings.

Keywords: Electricity Markets, Imperfect Competition, Forward and Futures

JEL Classification: L13, L44, L94

Suggested Citation

Bonacina, Monica and Creti, Anna and Manca, Federica, Im-Perfectly Competitive Contract Markets for Electricity (Jannuary 2008). Available at SSRN: https://ssrn.com/abstract=1089047 or http://dx.doi.org/10.2139/ssrn.1089047

Monica Bonacina

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

viale Filippetti, 9
Milan, 20122
Italy

Anna Creti (Contact Author)

Université Paris Ouest - Nanterre, La Défense - EconomiX ( email )

200 Avenue de la République
Nanterre cedex, Nanterre Cedex 92000
France

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

1 rue Descartes
Paris, 75005
France

Federica Manca

affiliation not provided to SSRN ( email )

No Address Available

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