Arbeitspapier
A Look Upstream: Electricity Market Restructuring, Risk, Procurement Contracts and Efficiency
This paper analyzes theoretically and empirically how upstream markets are affected by deregulation downstream. Deregulation tends to increase the level of uncertainty in the upstream market. Our theoretical analysis predicts that deregulated firms respond to this increase in uncertainty by writing more rigid contracts with their suppliers. Using the restructuring of the electricity market in the U.S. as our case study, we find support for our theoretical predictions. Furthermore, we investigate the impact this change in procurement contracts has on efficiency. Focusing on coal mines, we find that those selling coal to plants in restructured markets are significantly more productive than their counterparts working with regulated plants. On the other hand, we also find that transaction costs may have increased as a consequence of deregulation.
- Sprache
-
Englisch
- Erschienen in
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Series: CESifo Working Paper ; No. 5124
- Klassifikation
-
Wirtschaft
Transactional Relationships; Contracts and Reputation; Networks
Economics of Regulation
Nonrenewable Resources and Conservation: Demand and Supply; Prices
Energy: Government Policy
- Thema
-
energy policy
electricity market restructuring
deregulation
procurement contracts
risk
efficiency
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Di Maria, Corrado
Lange, Ian A.
Lazarova, Emiliya
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2014
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Di Maria, Corrado
- Lange, Ian A.
- Lazarova, Emiliya
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2014