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| Author: | Sweeting, A. |
| Title: | Market power in the England and Wales wholesale electricity market 1995-2000 |
| Journal: | Economic Journal
2007 : APR, VOL. 117:520, p. 654-685 |
| Index terms: | electricity industry wholesaling England Wales |
| Freeterms: | market power |
| Language: | eng |
| Abstract: | The paper shows that generators exercised considerable market power in the England and Wales wholesale electricity market in the late 1990s. This is surprising because static oligopoly models predict that falling market concentration should have reduced market power. The paper tests the equilibrium assumption of these models that each generator's bids should maximise its short-run profits given the bids of other generators. It is found that the two largest generators could have profitably increased their output from the beginning of 1997. Their behaviour was consistent with tacit collusion. |
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