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| Author: | Chapman, D. (et al.) |
| Title: | Market efficiency, competition, and communication in electric power markets: experimental results |
| Journal: | Ecological Economics
2004 : MAR, VOL. 48:3, p. 317-327 |
| Index terms: | Market efficiency Electricity industry Antitrust Competition Prices USA |
| Language: | eng |
| Abstract: | Economic theory gives no clear indication of the minimum number of producers necessary for a market to define competitive price-quantity equilibria, which approximate price equal to marginal cost. Previous work and Federal Energy Regulatory Commission (FERC) guidelines generally suggest that 610 suppliers may be workably competitive. This study's experiments with PowerWeb suggest that a higher number of suppliers may be necessary to approximate competitive market solutions, this in the absence of any communication among producers. As communications rules are altered to parallel differing types of antitrust enforcement, market results with 24 participants approach pure monopoly values. |
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