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| Author: | Weiss, J. |
| Title: | Market power and power markets |
| Journal: | Interfaces
2002 : SEP-OCT, VOL. 32:5, p. 37-46 |
| Index terms: | Energy industry Electricity industry Decision making Bidding Auctions |
| Language: | eng |
| Abstract: | Market power is a prominent issue in the current debate about electricity industry restructuring. Market experiments conducted with industry subjects via the Internet show the impact of seller concentration, demand-side bidding, and transmission constraints on competition in simulated elecricity markets. Realistic modeling of the transmission grid revealed opportunities to exercise market power not found in simpler experimental designs. In particular, increasing the number of sellers in a market did not necessarily reduce market power as standard theory suggests. Rather, locational advantages allowed some players to maintain profits near monopoly levels even when seller concentration was at levels generally considered competitive. |
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