The Subtraction Rule and its Effects on Pricing in the Electricity Industry

Walter Elberfeld

No 04-21, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The paper deals with the subtraction rule, which has been proposed by the ?working group security of supply in service of the cartel offices of the federal republic and the states? as an instrument to identify improperly inflated network access charges in the electricity industry. We analyze firms? price responses and adaptations to this rule. The results suggest that the introduction of the subtraction rule would increase prices, regardless of whether network access charges are improperly inflated or not.

Keywords: Electricity market; network access charges; abuse of a dominant position (search for similar items in EconPapers)
JEL-codes: L43 (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:1851

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