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Author: | Cremer, H. Laffont, J-J. |
Title: | Competition in gas markets |
Journal: | European Economic Review
2002 : APR, VOL. 46:4-5, p. 928-935 |
Index terms: | Gas industry Transport Capacity Competition Markets Models |
Freeterms: | Transmission capacity |
Language: | eng |
Abstract: | This paper discusses some of the current regulatory issues arising in gas markets under perfect or imperfect competition. It first presents a benchmark model of gas transportation pricing, when all markets are competitive. Optimal prices and capacities are characterized both without and with a break-even constraint for the transportation operator. Elaborating on this framework, it then studies the appropriate dimensioning of the transportation network when an otherwise unregulated supplier exerts market power. Specifically, it points to the possibility of building up "excess" transmission capacity to mitigate local market power. |
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