Crossholdings, concentration and information in capacity-constrained sealed bid-offer auctions

Augusto Ruperez Micola and Derek W. Bunn

Journal of Economic Behavior & Organization, 2008, vol. 66, issue 3-4, 748-766

Abstract: We present a sequence of simulations to analyse the collusive effects of transparency and different degrees of producer crossholding in energy markets. The results suggest that (a) the functional form of the crossholdings/market prices relationship is not linear and better defined by threshold specifications, (b) public information leads to higher market prices, and (c) more downstream competition reduces the influence of information on upstream coordination and improves it downstream. These results are checked for consistency and rationalised through the social mimicry features of the algorithm.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:748-766

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