Carlos Gutiérrez-Hita

Vertical Separation v. Independent Downstream Entry in the Spanish Electricity Network: An Experimental Approach

We present experimental results from a series of sessions organized using the Power Market simulator; a software designed to realistically replicate the Spanish Electricity Market. In the experiments reported here we compare the status quo to two alternative treatments which represent alternative market structures. In one of them, labeled as vertical separation, we assume that power generating firms and electricity distributors-endsuppliers belong to separate business groups. In the second, we study the effect of entry by independent end-suppliers. Both alternative scenarios dominate the status quo in terms of market efficiency, whereas the latter of them dominates the former.

Collusion sustainability with optimal punishments and detection lags, with an application to a Cournot game

In this paper we characterize optimal punishments with detection lags when the market consists of n oligopolistic firms that compete a la Cournot. It is shown how in the presence of detection lags optimal punishments fail to restore cooperation as long as the number of lags increases. Moreover, collusion sustainability is difficult to achieve also if the number of firms is low.