Market Power Effects on Market Equilibrium in Ambient Permit Markets

2007 ◽  
Vol 7 (1) ◽  
Author(s):  
Sonia Schwartz
Keyword(s):  
Market Power ◽  
Market Equilibrium ◽  
Initial Endowment ◽  
Dominant Firm ◽  
Permit Markets ◽  
Efficient Outcome ◽  
Number Of Firms

Abstract This paper discusses market power effects in ambient permit markets. We consider a dominant firm in a position to exert market power in several markets. A first conclusion is that the distortion observed on manipulated markets spreads to other markets. We find that the manipulated prices could be lower than their competitive level if the dominant firm acts as a monopolist, and higher if it acts as a monopsonist. We show that the efficient outcome is not reached, except if the number of firms is the same as the number of markets whatever the initial endowment of permits. If not, the efficient outcome can be reached by means of initial endowments.

28. Competition Law: Article 102

EU Law ◽  
2020 ◽  
pp. 1126-1162
Author(s):  
Paul Craig ◽  
Gráinne de Búrca
Keyword(s):  
Market Power ◽  
Competition Policy ◽  
Competition Law ◽  
Legal Regulation ◽  
The Core ◽  
Eu Competition Law ◽  
Per Se ◽  
The Uk ◽  
Article 102 Tfeu ◽  
Number Of Firms

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing students with a stand-alone resource. This chapter focuses on another principal provision concerned with competition policy: Article 102 TFEU. The essence of Article 102 is the control of market power, whether by a single firm or, subject to certain conditions, a number of firms. Monopoly power can lead to higher prices and lower output than would prevail under more normal competitive conditions, and this is the core rationale for legal regulation in this area. Article 102 does not, however, prohibit market power per se. It proscribes the abuse of market power. Firms are encouraged to compete, with the most efficient players being successful. The UK version contains a further section analysing issues concerning EU competition law and the UK post-Brexit. EU law

The Dominant Firm: A Study of Market Power

1984 ◽  
Vol 51 (2) ◽  
pp. 628
Author(s):  
Stephen Martin ◽  
Alice Patricia White
Keyword(s):  
Market Power ◽  
Dominant Firm

scholarly journals OPEC's market power: An empirical dominant firm model for the oil market

2018 ◽  
Vol 70 ◽  
pp. 98-115 ◽  
Author(s):  
Rolf Golombek ◽  
Alfonso A. Irarrazabal ◽  
Lin Ma
Keyword(s):  
Market Power ◽  
Dominant Firm ◽  
Oil Market ◽  
Firm Model

scholarly journals Market Power in Output and Emissions Trading

Games ◽  
2020 ◽  
Vol 11 (4) ◽  
pp. 43
Author(s):  
Francisco J. André ◽  
Luis Miguel de Castro
Keyword(s):  
Market Power ◽  
Emissions Trading ◽  
Strategic Behavior ◽  
Cournot Model ◽  
Ceteris Paribus ◽  
Dominant Firm ◽  
Initial Allocation ◽  
Permit Price ◽  
Permit Allocation ◽  
Output Market

This article focuses on the strategic behavior of firms in the output and the emissions markets in the presence of market power. We consider the existence of a dominant firm in the permit market and different structures in the output market, including Cournot and two versions of the Stackelberg model, depending on whether the permit dominant firm is a leader or a follower in the output market. In all three models, the firm that dominates the permit market is more sensitive to its initial allocation than its competitor in terms of abatement and less sensitive in terms of output. In all three models, output is decreasing and the permit price is increasing in the permit dominant firm’s initial allocation. In the Cournot model, permit dominance is fruitless in terms of output and profit if the initial allocation is symmetric. Output leadership is more relevant than permit dominance since an output leader always tends to, ceteris paribus, produce more and make more profit whether it also dominates the permit market or not. This leadership can only be overcompensated for by distributing a larger share of permits to the output follower, and only if the total number of permits is large enough. In terms of welfare, Stackelberg is always superior to Cournot. If the initial permit allocation is symmetric, welfare is higher when the same firm dominates the output and the permit market at the same time.

The German Telecommunications Reform – Where did it come from, Where is it, and Where is it Going?

2003 ◽  
Vol 4 (3) ◽  
Author(s):  
Ingo Vogelsang
Keyword(s):  
Market Power ◽  
Economic Research ◽  
Unified Framework ◽  
Dominant Firm ◽  
The Road ◽  
Telecommunications Reform ◽  
Long Run ◽  
Specific Regulation ◽  
The Stability ◽  
Work Abroad

AbstractGerman telecommunications reform came late because of high institutional constraints, powerful beneficiaries and reasonable functioning of the old system. It finally occurred because (1) the beneficiaries had less to lose, (2) Germany was falling behind, (3) reform was proven to work abroad and (4) the EC exerted pressure. The reform, particularly separation of posts from telecommunications, privatization of Deutsche Telekom and the creation of the RegTP, brought radical changes and the formation of new beneficiaries. The current sector crisis should spur research in the stability of competition in network industries and a reevaluation of the current reforms. Further reforms are required by new EC rules that will provide a more unified framework for the entire telecommunications sector. In the long run, privatization and liberalization will be completed, while some kinds of telecommunications-specific regulation will continue. Dominant firm regulation of end-user services is likely to be abolished down the road, while bottleneck regulation may persist. The remaining amount of dominant firm regulation and the pace of deregulation will depend heavily on market boundaries between (a) wireless and fixed networks, (b) high and low capacity subscriber access and (c) high-density and lowdensity networks. Assessing the interaction between market boundaries and market power requires economic research of intermodal competition and market power.

scholarly journals Competitive Entry In Ontarios Deregulated Power Generation Industry

2012 ◽  
Vol 10 (2) ◽  
pp. 111
Author(s):  
Xiaoting Wang ◽  
Jun Yang
Keyword(s):  
Electricity Market ◽  
Optimal Number ◽  
Social Optimum ◽  
Market Demand ◽  
Equilibrium Outcome ◽  
Efficient Outcome ◽  
The Social ◽  
The Relationship ◽  
Equilibrium Number ◽  
Number Of Firms

In this paper we investigate the issues involved in the deregulation of an electricity market. The paper focuses on efficiency considerations, comparing the gap between the socially efficient outcome and that achievable by a market. We model this problem with two-sided uncertainty: the uncertain market demand and the uncertain cost of production. In each case, we find the social optimum and the equilibrium outcome of the deregulated market. Conditions when deregulated industry cannot generate the socially optimal number of firms are identified. The relationship between market demand, the degree of risk-aversion of private firms, and the equilibrium number of firms is investigated.

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