Quantity versus Price Competition in the Deregulated Finnish Electricity Markets

Maria Kopsakangas-Savolainen
Additional contact information
Maria Kopsakangas-Savolainen: Department of Economics, University of Oulu, Finland

Finnish Economic Papers, 2003, vol. 16, issue 2, 51-60

Abstract: The main motivation to deregulate Finnish electricity markets and introduce competition to the industry was to improve efficiency and obtain lower prices. In this paper we use a numerical simulation model in order to analyse the impact of market structure to the wholesale price of electricity. We solve Cournot equilibrium and Bertrand equilibrium. The results indicate that in some circumstances deregulation might actually lead to higher prices instead of lower ones. This happens if Cournot competition is realised and consumers do not react to the competition by becoming more price sensitive. If, however, price elasticity of demand increases deregulation will lead to the lower prices and higher production regardless of the market structure.

JEL-codes: D43 L11 L94 (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.taloustieteellinenyhdistys.fi/images/stories/fep/f2003_2a.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fep:journl:v:16:y:2003:i:2:p:51-60

Access Statistics for this article

More articles in Finnish Economic Papers from Finnish Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Editorial Secretary ( this e-mail address is bad, please contact ).