Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/183420 
Year of Publication: 
2017
Series/Report no.: 
IFN Working Paper No. 1191
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
Horizontal shifts in bid curves observed in wholesale electricity markets are consistent with Cournot competition. Quantity competition reduces the informational requirements associated with evaluating market performance because the markups of all producers then depend on the same inverse residual demand curve instead of one for each firm. We apply the model to the day-ahead market of the Nordic power exchange, Nord Pool, for the years 2011-2013. Results suggest that mark-ups were 8-11 percent. We find some support for the hypothesis that the division of Sweden into price areas in 2011 increased the exercise of market power.
Subjects: 
Cournot competition
Market design
Market performance
Nord Pool
Walrasian auction
Wholesale electricity market
JEL: 
D22
D43
D44
D4
Document Type: 
Working Paper

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