Long-term supply contracts and collusion in the electricity market

Arbeitspapier

It has been argued that having a contract market before the spot market enhances competition (Allaz and Vila, 1993). Taking into account the repeated nature of electricity markets, we check the robustness of the argument that the access to contract markets reduces the market power of generators. In particular, we investigate the sensitivity of this result with respect to the finite horizon assumption. This paper proposes a model of the electricity market where firms sign long-term supply contracts with their retailers. Subsequently, the firms repeatedly interact on the spot market. It is shown that contract markets help sustain collusion on the spot market.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: SSE/EFI Working Paper Series in Economics and Finance ; No. 552

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Noncooperative Games ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Contingent Pricing; Futures Pricing; option pricing ; Oligopoly and Other Imperfect Markets ; Electric Utilities
• Thema: Contract market ; Electricity ; Spot Market ; Forward ; Tacit collusion ; Elektrizitätswirtschaft ; Markt ; Termingeschäft ; Kartell ; Vertragsrecht

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Le Coq, Chloé
• Ereignis: Veröffentlichung
• (wer): Stockholm School of Economics, The Economic Research Institute (EFI)
• (wo): Stockholm
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/56077
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ