Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior?

David Brown and Andrew Eckert

No 2019-9, Working Papers from University of Alberta, Department of Economics

Abstract: We examine allegations that firms in Alberta's electricity industry manipulated public information to coordinate in the wholesale market. We investigate whether bids by firms who employed unique pricing patterns were consistent with unilateral expected profit maximization. Our results suggest that these firms could have increased expected profits through unilateral deviations. For one firm, the potential to increase profits is greater on days when certain offer patterns are observed, providing support for the claim that such patterns may have assisted coordination on high-priced outcomes. These results suggest that regulators should exercise caution when designing information disclosure policies in concentrated electricity markets.

Keywords: Electricity; Market Power; Information; Regulation; Antitrust (search for similar items in EconPapers)
JEL-codes: D43 L40 L51 L94 Q48 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2019-06-26
New Economics Papers: this item is included in nep-com, nep-ene and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior?* (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2019_009

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