Hold-Up Problems in International Electricity Trade

37 Pages Posted: 2 Sep 2015

Date Written: September 1, 2013

Abstract

This paper investigates the impact of limited commitment on international electricity trade. We build a model where hold-up problems originating from incomplete contracts decrease countries’ willingness to trade. In particular, an inability to commit to future trade reduces the specialization of investment. The paper then uses the model to explore potential policy solutions including deregulation and the liberalization of ownership.

JEL Classification: D86, F19, L94, O18

Suggested Citation

Wren-Lewis, Liam, Hold-Up Problems in International Electricity Trade (September 1, 2013). Available at SSRN: https://ssrn.com/abstract=2654312 or http://dx.doi.org/10.2139/ssrn.2654312

Liam Wren-Lewis (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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