Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56077
Authors: 
Le Coq, Chloé
Year of Publication: 
2004
Series/Report no.: 
SSE/EFI Working Paper Series in Economics and Finance 552
Abstract: 
It has been argued that having a contract market before the spot market enhances competition (Allaz and Vila, 1993). Taking into account the repeated nature of electricity markets, we check the robustness of the argument that the access to contract markets reduces the market power of generators. In particular, we investigate the sensitivity of this result with respect to the finite horizon assumption. This paper proposes a model of the electricity market where firms sign long-term supply contracts with their retailers. Subsequently, the firms repeatedly interact on the spot market. It is shown that contract markets help sustain collusion on the spot market.
Subjects: 
Contract market
Electricity
Spot Market
Forward
Tacit collusion
JEL: 
C72
D43
G13
L13
L94
Document Type: 
Working Paper

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