@techreport{Wolfing2008Asymmetric,
abstract = {In January 2007, first evidence of an asymmetric pass-through of CO2 emission allowance prices was reported for the German electricity spot market. This paper explores the theoretical basis for such an asymmetry in the context of a supply function bidding duopoly. It interprets fluctuating carbon prices as a coordination mechanism for tacitly colluding firms and studies incentive compatibility in the repeated game. It is new in its attempt to model asymmetric behaviour in a spot market without relevant frictions, and gives a reasoning why the asymmetry shows up for emission allowances only. The paper concludes with a theorem: that asymmetric price transmission is sustained up to a certain maximum level which might include the monopoly solution and that this mechanism is always preferred to non-cooperation.},
address = {Mannheim},
author = {Nikolas W\"{o}lfing},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {D82; C73; Q41; L13; 330; Asymmetric price transmission; Electricity spot markets; Emission allowances; Emissionsrechte; Preis; Stromtarif; Warenb\"{o}rse; Wertpapierhandel; \"{O}konomischer Anreiz; Auktionstheorie; Theorie; Deutschland},
language = {eng},
number = {08-040},
publisher = {Zentrum f\"{u}r Europ\"{a}ische Wirtschaftsforschung (ZEW)},
title = {Asymmetric Price Transmission in Supply Function Equilibrium, Carbon Prices and the German Electricity Spot Market},
type = {ZEW Discussion Papers},
url = {http://hdl.handle.net/10419/24736},
year = {2008}
}
