A Market Screening Model for Price Inconstancies: Empirical Evidence from German Electricity Markets

Korbinian von Blanckenburg, Marc Hanfeld and Konstantin Kholodilin ()

No 1274, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: In this paper, we develop a market screening model to detect inconstancies in price changes. Although there is a long history of industrial organization research of collusion, price setting behavior, and conduct - a robust model to detect structural changes in market structure was missing so far. Our non-parametric approach closes this gap and can be used as a tentative warning system for emerging collusions. Based on the theoretical and empirical results from previous research, we describe requirements of screenings, develop a model, and illustrate our approach with a short market simulation. Finally, we apply the model to the German electricity market. According to our results, between 2001 and 2011 energy suppliers appear to be successful in controlling the market price for several phases.

Keywords: Market screening; collusion; competition policy; energy markets (search for similar items in EconPapers)
JEL-codes: L10 L60 (search for similar items in EconPapers)
Pages: 26 p.
Date: 2013
New Economics Papers: this item is included in nep-ene and nep-ind
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