An Examination of Frank Wolak’s Model of Market Power and its Application to the New Zealand Electricity Market

Lewis Evans and Graeme Guthrie

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This paper is the second in a symposium of papers that examine the 2009 report by Frank Wolak into the New Zealand electricity market. In this paper, we discuss the Report’s measures of the ability and incentives of generators to exercise unilateral market power. We show that the construction and interpretation of these measures are highly sensitive to some key assumptions, particularly those concerning the elasticity of demand for electricity in the wholesale market and the amount of transmission loss on the national grid.

Keywords: Electricity markets; market power (search for similar items in EconPapers)
JEL-codes: L13 L41 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2011-01-23
New Economics Papers: this item is included in nep-ene and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:11/10

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