Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/208535 
Authors: 
Year of Publication: 
2007
Series/Report no.: 
Working paper No. 3-2007
Publisher: 
Copenhagen Business School (CBS), Department of Economics, Frederiksberg
Abstract: 
We compare investments in generating capacities of an integrated monopolist with the aggregate investments of two vertically integrated competing firms. The firms invest in their capacity and fix the retail price while electricity demand is uncertain. The wholesale price is determined in a unit price auction where the firms know the level of demand when they bid their capacities. Total capacities can be larger or smaller with a duopoly than with a monopoly. If the two firms select the Pareto dominant equilibrium, then the retail price is always higher and the social welfare lower in the duopoly case.
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Working Paper

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