Vertical Arrangements, Market Structure, and Competition - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Vertical Arrangements, Market Structure, and Competition write by James Bushnell. This book was released on 2005. Vertical Arrangements, Market Structure, and Competition available in PDF, EPUB and Kindle. This paper examines the relative importance of horizontal market structure, auction design, and vertical arrangements in explaining electricity prices. We define vertical arrangements as either vertical integration or long term contracts whereby retail prices are determined prior to wholesale prices. This is generally the case in electricity markets. These ex ante retail price commitments mean that a producer has effectively entered into a forward contract when it takes on retail customers. The integrated firm has less incentive to raise wholesale prices when its sale price is constrained. For three restructured wholesale electricity markets, we simulate two sets of prices that define the bounds on static oligopoly equilibria. Our findings suggest that vertical arrangements dramatically affect estimated market outcomes. Simulated prices that assume Cournot behavior but ignore this vertical scope vastly exceed observed prices. After accounting for the arrangements, performance is similar to Cournot in each market. Our results indicate that auction design has done little to limit strategic behavior and that horizontal market structure accurately predicts market performance only when vertical structure is also taken into account.
Vertical Arrangements, Market Structure, and Competition
Vertical Arrangements, Market Structure, and Competition - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Vertical Arrangements, Market Structure, and Competition write by James B. Bushnell. This book was released on 2007. Vertical Arrangements, Market Structure, and Competition available in PDF, EPUB and Kindle. This paper examines vertical arrangements in electricity markets. Vertically integrated wholesalers, or those with long-term contracts, have less incentive to raise wholesale prices when retail prices are determined beforehand. For three restructured markets, we simulate prices that define bounds on static oligopoly equilibria. Our findings suggest that vertical arrangements dramatically affect estimated market outcomes. Had regulators impeded vertical arrangements (as in California), our simulations imply vastly higher prices than observed and production inefficiencies costing over 45 percent of those production costs with vertical arrangements. We conclude that horizontal market structure accurately predicts market performance only when accounting for vertical structure.
Market Structure and the Competitive Effects of Vertical Integration
Market Structure and the Competitive Effects of Vertical Integration - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Market Structure and the Competitive Effects of Vertical Integration write by Simon Loertscher. This book was released on 2014. Market Structure and the Competitive Effects of Vertical Integration available in PDF, EPUB and Kindle. We analyze the competitive effects of backward vertical integration when firms exert market power upstream and compete à la Cournot downstream. Contrasting with previous literature, a small degree of vertical integration is always procompetitive because efficiency gains dominate foreclosure effects, and vertical integration even to full foreclosure can be procompetitive. Surprisingly, vertical integration is more likely to be procompetitive if the industry is otherwise more concentrated. Extensions analyze incentives to integrate and differentiated Bertrand competition downstream. Our analysis suggests that antitrust authorities should be wary of vertical integration when the integrating firm faces many competitors and should be permissive otherwise.
On Vertical Market Structure and Buyer Countervailing Power
On Vertical Market Structure and Buyer Countervailing Power - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook On Vertical Market Structure and Buyer Countervailing Power write by Xu-liang WU. This book was released on 2013. On Vertical Market Structure and Buyer Countervailing Power available in PDF, EPUB and Kindle. The paper redefines different types of vertical market structure, such as double monopoly, bilateral monopoly, and two-sided monopoly. The core issue can be stated as follows: When there is bilateral monopoly, what are the differences between two-sided monopoly and one-sided monopoly as far as welfare consequences of retailers' rising buyer power are concerned. The results show that in tow-sided monopoly situation, from consumer welfare perspective, the results of vertical integration are better than the results of vertical separation, whereas in one-sided monopoly situation, the results of vertical separation are better than the results of vertical integration, so the vertical market structure of one-sided monopoly or one-sided competition effectively overcomes double marginalization problem, to counter the forces at this time the buyer countervailing power hypothesis is somewhat reasonable. Taking Inter-period factor into account, this conclusion is even more credible.
Vertical Control of Markets
Vertical Control of Markets - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Vertical Control of Markets write by Frederick R. Warren-Boulton. This book was released on 1978. Vertical Control of Markets available in PDF, EPUB and Kindle.
