Market Structure and the Price of Electricity: An ex ante Analysis of the deregulated Swedish Electricity Market

Lars Bergman () and Bo Andersson
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Lars Bergman: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Bo Andersson: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden

No 47, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: Following new legislation the Swedish electricity market is about to be deregulated. The new system is designed to ensure competition in production and supply. The Swedish electricity market is characterised by a high degree of concentration on the seller side. In this paper we use a simple numerical model to explore the relation between the Cournot-equilibrium price and the number of firms and the size distribution of firms on the market. We show that given the current structure of firms on the supply side of the Swedish electricity market, deregulation is not a sufficient condition for equilibrium prices close to marginal costs.

Keywords: Oligopoly; Nash-Cournot; deregulation; electricity (search for similar items in EconPapers)
JEL-codes: D43 L11 L94 Q40 (search for similar items in EconPapers)
Pages: 15 pages
Date: 1995-02
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Citations: View citations in EconPapers (48)

Published in The Energy Journal, 1995, pages 97-109

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0047

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