The effect of regulatory scrutiny asymmetric cost pass-through in power wholesale and its end

Frieder Mokinski and Nikolas Wölfing

No 13-055, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We find an asymmetric pass-through of European Emission Allowance (EUA) prices to wholesale electricity prices in Germany and show that this asymmetry has disappeared in response to a report on investigations by the competition authority. The asymmetric pricing pattern, however, was not detected at the time of the report, nor had it been part of the investigations. Our results therefore provide evidence of the deterring effect of regulatory monitoring on firms which exhibit non-competitive pricing behavior. We do not find any asymmetric pass-through of EUA prices in recent years. Several robustness checks support our results.

Keywords: asymmetric price adjustment; regulatory monitoring; wholesale electricity markets; emission trading (search for similar items in EconPapers)
JEL-codes: L4 L94 Q41 Q52 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-com, nep-eur, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The effect of regulatory scrutiny: Asymmetric cost pass-through in power wholesale and its end (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13055

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