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Market power and forward prices

Keith Ruddell (), Anthony Downward and Andy Philpott

Economics Letters, 2018, vol. 166, issue C, 6-9

Abstract: Our model of strategic behavior in sequential markets exhibits a persistent forward price premium. This premium is not susceptible to arbitrage by speculators on the forward market, since purchasers prefer forward contracts backed by producers with market power.

Keywords: Forward pricing; Electricity markets; Market power; Arbitrage (search for similar items in EconPapers)
JEL-codes: D43 G13 L12 L13 Q41 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:166:y:2018:i:c:p:6-9

DOI: 10.1016/j.econlet.2018.02.016

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