Arbeitspapier
Vertical integration and long-term contracts in risky markets
We consider the effects of vertical integration on the performance of long-term and spot markets when spot prices are uncertain and agents are risk averse. We find that vertical integration impairs market performance by increasing the gap between contract and (expected) spot prices. This holds regardless of whether retail prices are fixed or linked to spot prices. Depending upon the characteristics of demand and supply, vertical integration (and long-term contracting) may increase or decrease spot-price volatility.
- Language
-
Englisch
- Bibliographic citation
-
Series: Memorandum ; No. 2007,01
- Classification
-
Wirtschaft
General Economics: General
- Subject
-
Vertical integration
long-term contracts
spot markets
risk aversion
electricity markets
Energiemarkt
Vertikale Konzentration
Vertragstheorie
Spotmarkt
Dauer
Risikoaversion
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Baldursson, Fridrik M.
Fehr, Nils-Henrik M. von der
- Event
-
Veröffentlichung
- (who)
-
University of Oslo, Department of Economics
- (where)
-
Oslo
- (when)
-
2007
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Baldursson, Fridrik M.
- Fehr, Nils-Henrik M. von der
- University of Oslo, Department of Economics
Time of origin
- 2007
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