An Examination of Frank Wolak's Model of Market Power and Its Application to the New Zealand Electricity Market

Evans, Lewis T.; Guthrie, Graeme

doi:10.2139/ssrn.1967988

An Examination of Frank Wolak's Model of Market Power and Its Application to the New Zealand Electricity Market

10 Pages Posted: 4 Dec 2011

See all articles by Lewis T. Evans

Lewis T. Evans

Victoria University of Wellington - New Zealand Institute for Study of Competition and Regulation Inc. (ISCR)

Graeme Guthrie

Victoria University of Wellington - School of Economics & Finance

Date Written: December 4, 2011

Abstract

We appraise the theoretical basis and the consequent empirical work of Frank Wolak in his study of the New Zealand Electricity market in a report to the New Zealand Commerce Commission released in March 2009. The report found no multilateral actions, but concluded there was evidence of market power. We find that the theoretical and empirical methodologies employed do not imply the existence of unilateral market power in oligopoly electricity markets.

Keywords: electricity markets, market power

JEL Classification: L41,L13

Suggested Citation: Suggested Citation

Evans, Lewis T. and Guthrie, Graeme, An Examination of Frank Wolak's Model of Market Power and Its Application to the New Zealand Electricity Market (December 4, 2011). Available at SSRN: https://ssrn.com/abstract=1967988 or http://dx.doi.org/10.2139/ssrn.1967988