Market power and strategic interaction in electricity networks

Cardell, Judith B.; Hitt, Carrie Cullen; Hogan, William W.

doi:10.1016/s0928-7655(97)00006-7

Cited by 381 publications

(184 citation statements)

References 20 publications

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“…They demonstrate that FTR market power by a producer in the importing region (or a consumer in the exporting region) aggravates their monopoly (monopsony) power, because dominance in the FTR market creates an incentive to curtail generation (demand) to increase the value of the FTRs. This is also in line with the conclusion in the FTR literature: generators can more easily exert local market power when transmission congestion is present (Bushnell, 1999;Bushnell and Stoft, 1997;Joskow and Tirole, 2000;Oren, 1997;Joskow and Schmalensee, 1983;Chao and Peck, 1997;Gilbert, Neuhoff, and Newbery, 2002;Cardell, Hitt, and Hogan, 1997;Borenstein, Bushnell and Stoft, 1998;Wolfram, 1998;Bushnell and Wolak, 1999). The behavior of the generators in the FTR market should then be regulated.…”

Section: Financial Transmission Rights and Market Powersupporting

confidence: 84%

Markets for Financial Transmission Rights

Kristiansen¹

2004

Energy Studies Review

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This paper surveys the markets for financial transmission rights (FTRs) around the world. FTRs are used to hedge the costs associated with transmission congestion. Currently these rights are in use in PJM, New York and New England. A variant of financial transmission rights, which has both a physical and a financial aspect, was introduced in California in 2000. Similarly, flowgates were introduced in Texas in 2002. FTRs are also planned for introduction in New Zealand. The features of the FTRs and the design of the different FTR markets are described. The paper focuses on how FTRs can be acquired, their advantages and disadvantages, and their market performance.

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Section: Financial Transmission Rights and Market Powersupporting

confidence: 84%

Markets for Financial Transmission Rights

Kristiansen¹

2004

Energy Studies Review

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“…Since HHI outcomes are compared against the threshold index suggested in Merger Guidelines of U.S. Department of Justice and the Federal Trade Commission and other studies (Cardell, Hitt and Hogan, 1997;Kerber, Kretschmer and von Wangenheim, 2009) that follow the index format convention in the Merger Guidelines, percent sign (%) is left out for both S i and HHI expressions. For example, S 1 is expressed as 33.83 rather than 33.83%.…”

Section: B) Calculation Of Hirfindahl-hirschman Index (Hhi)mentioning

confidence: 99%

Concentration Analysis of New Private Residential Units Market in Hong Kong

Cheung

Levina

Niu

2017

CEB

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The new residential property price in Hong Kong has rocketed in the last decade and has ranked within the top three metropolitan cities in the world. Housing is a necessity for most people, high residential property price has its social ramification. The rocketing price seems not solely the result of the market. As such, this raised the issue of competition in this market. This study employs Concentration Ratio and Hirfindahl-Hirschman index to evaluate the market concentration of the New Private Resident Units Market in Hong Kong. Using the best information available in the public domains and applying universal thresholds, the New Private Resident Units Market in Hong Kong is considered moderately concentrated. It is noted that the big five listed developers in Hong Kong are collectively holding a dominant position of the potential supply. Moreover, the top three have comparable market shares thus suggesting no monopoly exists. It is also found that the substantial land banks held by the five big listed developers, amount to 60% of that owned by the Government. These developers will therefore retain their dominant market power in the future. Further study is recommended to examine whether the big developers have abused their market power.

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“…Dijk et al (2009) look at the impact of network pricing on the dynamic efficiency of investments in the electricity sector in a there are not significant differences between both models when one looks at the available market data. Other studies using Cournot competition are Borenstein et al ( , 2000, , Cardell et al (1997), Hogan (1997), Oren (1997) and Stoft (1997). stochastic two stage oligopolistic model. It is shown that social and private incentives are not aligned and that additional regulatory instruments are required.…”

Section: Long Term Efficiencymentioning

confidence: 99%

Cost Recovery in Congested Electricity Networks

Pepermans¹,

Willems

2010

Z Energiewirtsch

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Large scale investments in European electricity networks are foreseen in the next decade. Pricing the network at marginal cost will not be sufficient to pay for those investments as the network is a natural monopoly. This paper derives numerically the socially optimal transmission prices for cost recovery, taking into account that electricity networks are often congested, while allowing for market power in generation. The model is illustrated with a Stackelberg game for the Belgian electricity market.

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Market power and strategic interaction in electricity networks

Cited by 381 publications

References 20 publications

Markets for Financial Transmission Rights

Markets for Financial Transmission Rights

Concentration Analysis of New Private Residential Units Market in Hong Kong

Cost Recovery in Congested Electricity Networks

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