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Vertical Arrangements, Market Structure, and Competition
James B. Bushnell
Erin Mansur
Celeste Saravia
其他書名
An Analysis of Restructured U.S. Electricity Markets
出版
National Bureau of Economic Research
, 2007
URL
http://books.google.com.hk/books?id=iBDwAAAAMAAJ&hl=&source=gbs_api
註釋
This paper examines vertical arrangements in electricity markets. Vertically integrated wholesalers, or those with long-term contracts, have less incentive to raise wholesale prices when retail prices are determined beforehand. For three restructured markets, we simulate prices that define bounds on static oligopoly equilibria. Our findings suggest that vertical arrangements dramatically affect estimated market outcomes. Had regulators impeded vertical arrangements (as in California), our simulations imply vastly higher prices than observed and production inefficiencies costing over 45 percent of those production costs with vertical arrangements. We conclude that horizontal market structure accurately predicts market performance only when accounting for vertical structure.
