Arbeitspapier
Sequential markets, market power and arbitrage
We develop a framework to characterize strategic behavior in sequential markets under imperfect competition and restricted entry in arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the model predictions using micro-data from the Iberian electricity market. We show that the observed price differences and firm behavior are consistent with the model. Finally, we quantify the welfare effects of arbitrage using a structural model. In the presence of market power, we show that full arbitrage is not necessarily welfare-enhancing, reducing consumer costs but increasing deadweightloss.
- Language
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Englisch
- Bibliographic citation
-
Series: CSIO Working Paper ; No. 0135
- Classification
-
Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Ito, Koichiro
Reguant, Mar
- Event
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Veröffentlichung
- (who)
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Northwestern University, Center for the Study of Industrial Organization (CSIO)
- (where)
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Evanston, IL
- (when)
-
2015
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Ito, Koichiro
- Reguant, Mar
- Northwestern University, Center for the Study of Industrial Organization (CSIO)
Time of origin
- 2015
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