A dynamic conduct parameter model of electricity marketer pricing behavior in the California power exchange

Carol Dahl and Tyler Hodge ()
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Tyler Hodge: U.S. Energy Information Administration

No 2012-15, Working Papers from Colorado School of Mines, Division of Economics and Business

Abstract: This paper contains a dynamic conduct parameter model to look at the pricing behavior of five power marketers in the California Power Exchange (CalPX) on daily data for 2000. Only our previous paper Hodge and Dahl (2012) specifically focused on just the electric power marketers. In this paper we compare a dynamic conduct parameter with that of our earlier static model to test whether the static estimates are biased downwards or towards not rejecting the null hypothesis of no market power. We estimate the model using generalized methods of moments on data for each marketer. We find more evidence of collusive behavior with the dynamic than the earlier static model estimates.

Keywords: Electricity; Conduct Parameter; Dynamic; Marketer (search for similar items in EconPapers)
JEL-codes: L10 L94 Q40 Q41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2012-12
New Economics Papers: this item is included in nep-com, nep-ene and nep-reg
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http://econbus-papers.mines.edu/working-papers/wp201215.pdf First version, 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mns:wpaper:wp201215

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