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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-Technical SummaryThis paper examines the effect of an investigation report by the competition authority on the pass-through of EU emission allowance (EUA) prices to German electricity wholesale prices. Since January 2005, the European Emissions Trading Scheme (EU ETS) has obligated larger greenhouse gas emitters in the EU to measure their emissions and submit a corresponding amount of allowances by the end of each year. As a result, rising electricity prices could be observed in several European countries. For the German electricity wholesale market, Zachmann and von Hirschhausen (2008) found an asymmetric response to the price for emission allowances: The increase of the electricity price in response to increasing prices on the EUA market was more pronounced than the decrease in response to decreasing EUA prices.This paper confirms the result of Zachmann and von Hirschhausen (2008) with different data and a more subtle identification strategy, but also limits the time frame for which the asymmetry can be observed. In March 2006, the German competition authority published a paper in order to prepare for a hearing on emissions trading and electricity price formation with a surprisingly critical assessment of the pass-through of EUA prices to electricity prices. The asymmetric pricing pattern, however, was not detected at the time of the report, nor had it been part of the investigations. Nevertheless, our results suggest that the asymmetric pricing pattern disappeared by the time the report was published. By means of the chosen methodology, we can exclude other major events, such as the sharp fall of EUA prices in April 2006, as driving factors for our results. Our findings therefore evidence the deterring effect of regulatory oversight on firms, exhibiting non-competitive pricing behavior on concentrated markets. For recent years, we cannot find any asymmetric pass-through of EUA prices. Several robustness checks support our results. Das Wichtigste in Kürze AbstractWe find an asymmetric pass-through of European Emission Allowance (EUA) prices to wholesale electricity prices in Germany and show that this asymmetry has disappeared in response to a report on investigations by the competition authority. The asymmetric pricing pattern, however, was not detected at the time of the report, nor had it been part of the investigations. Our results therefore provide evidence of the deterring effect of regulatory monitoring on firms which exhibit non-competitive pricin...

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-Technical SummaryThis paper examines the effect of an investigation report by the competition authority on the pass-through of EU emission allowance (EUA) prices to German electricity wholesale prices. Since January 2005, the European Emissions Trading Scheme (EU ETS) has obligated larger greenhouse gas emitters in the EU to measure their emissions and submit a corresponding amount of allowances by the end of each year. As a result, rising electricity prices could be observed in several European countries. For the German electricity wholesale market, Zachmann and von Hirschhausen (2008) found an asymmetric response to the price for emission allowances: The increase of the electricity price in response to increasing prices on the EUA market was more pronounced than the decrease in response to decreasing EUA prices.This paper confirms the result of Zachmann and von Hirschhausen (2008) with different data and a more subtle identification strategy, but also limits the time frame for which the asymmetry can be observed. In March 2006, the German competition authority published a paper in order to prepare for a hearing on emissions trading and electricity price formation with a surprisingly critical assessment of the pass-through of EUA prices to electricity prices. The asymmetric pricing pattern, however, was not detected at the time of the report, nor had it been part of the investigations. Nevertheless, our results suggest that the asymmetric pricing pattern disappeared by the time the report was published. By means of the chosen methodology, we can exclude other major events, such as the sharp fall of EUA prices in April 2006, as driving factors for our results. Our findings therefore evidence the deterring effect of regulatory oversight on firms, exhibiting non-competitive pricing behavior on concentrated markets. For recent years, we cannot find any asymmetric pass-through of EUA prices. Several robustness checks support our results. Das Wichtigste in Kürze AbstractWe find an asymmetric pass-through of European Emission Allowance (EUA) prices to wholesale electricity prices in Germany and show that this asymmetry has disappeared in response to a report on investigations by the competition authority. The asymmetric pricing pattern, however, was not detected at the time of the report, nor had it been part of the investigations. Our results therefore provide evidence of the deterring effect of regulatory monitoring on firms which exhibit non-competitive pricin...

Functional panels are collections of functional time series, and arise often in the study of high frequency multivariate data. We develop a portmanteau style test to determine if the cross-sections of such a panel are independent and identically distributed. Our framework allows the number of functional projections and/or the number of time series to grow with the sample size. A large sample justification is based on a new central limit theorem for random vectors of increasing dimension. With a proper normalization, the limit is standard normal, potentially making this result easily applicable in other FDA context in which projections on a subspace of increasing dimension are used. The test is shown to have correct size and excellent power using simulated panels whose random structure mimics the realistic dependence encountered in real panel data. It is expected to find application in climatology, finance, ecology, economics, and geophysics. We apply it to Southern Pacific sea surface temperature data, precipitation patterns in the South-West United States, and temperature curves in Germany.

This paper studies the effect of forward contracts on the stability of collusion among firms, competing in supply functions on the spot market. A forward market can increase the range of discount factors which allow to sustain collusion. On the contrary, collusion is destabilised when a potential deviator sells a significant amount forward. Results do not depend on the type (financial or physical) of contract fulfilment and are robust to different levels of demand uncertainty. As a policy implication, the study finds that liquid and anonymous forward markets are incompatible with collusion.