Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden

Erik Lundin

No 1113, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper presents an empirical test of the anticompetitive effects of joint ownership by examining the operation of three nuclear plants in Sweden. Since maintenance is the main conduit explaining variation in output, I formulate a model of optimal maintenance allocation given three behavioral assumptions: i) maximal collusion, where all owners’ profits on both nuclear and other output are maximized; ii) Cournot competition, where the majority owners’ profits on both nuclear and other output are maximized; and iii) a divested solution, where all owners’ profits on nuclear output are maximized, but no weight is given to non-nuclear output. The behavior that fits the data best is a “hybrid” model where maximal collusion is only achieved during periods of the year when regulatory oversight is less strict. During the remainder of the year, data is instead most consistent with the divested solution.

Keywords: Joint ownership; Electricity wholesale market; Nuclear; Maintenance; Collusion; Regulatory threat (search for similar items in EconPapers)
JEL-codes: D22 D43 D44 L13 L22 L94 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2016-02-29, Revised 2019-11-04
New Economics Papers: this item is included in nep-ene, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1113

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