AboutSectionsView PDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareShare onFacebookTwitterLinked InEmail Go to Section HomeInterfacesVol. 32, No. 5 Market Power and Power MarketsJürgen WeissJürgen WeissPublished Online:1 Oct 2002https://doi.org/10.1287/inte.32.5.37.74AbstractMarket power is a prominent issue in the current debate about electricity industry restructuring. Market experiments I conducted with industry subjects via the Internet show the impact of seller concentration, demand-side bidding, and transmission constraints on competition in simulated electricity markets. Realistic modeling of the transmission grid revealed opportunities to exercise market power not found in simpler experimental designs. In particular, increasing the number of sellers in a market did not necessarily reduce market power as standard theory suggests. Rather, locational advantages allowed some players to maintain profits near monopoly levels even when seller concentration was at levels generally considered competitive. The implication is that divestiture of existing local monopolies may not be enough to make electricity markets competitive. I confirm the positive impact of demand-side bidding on competition. Previous Back to Top Next FiguresReferencesRelatedInformationCited byNon-Smooth Dynamics in Energy Market Models: A Complex Approximation From System Dynamics and Dynamical Systems ApproachIEEE Access, Vol. 8Transmission Rights to the Electrical Transmission Grid in the Post Liberalization Era30 November 2012 | Journal of the Knowledge Economy, Vol. 5, No. 4Does NTPC Have a Dominant Position? A Critical Analysis23 March 2015 | Journal of Infrastructure Development, Vol. 6, No. 2GenCos' strategic behavior monitoring on auction bidding based on state variables formulationA survey of critical research areas in the energy segment of restructured electric power marketsInternational Journal of Electrical Power & Energy Systems, Vol. 31, No. 5Competition with Forward Contracts: A Laboratory Analysis Motivated By Electricity Market Design20 December 2007 | The Economic Journal, Vol. 118, No. 525Introduction to the Special Issue on Experimental Economics in PracticeGary E. Bolton, Anthony M. Kwasnica, 1 October 2002 | Interfaces, Vol. 32, No. 5 Volume 32, Issue 5September-October 2002Pages 1-105 Article Information Metrics Information Published Online:October 01, 2002 © 2002 INFORMSCite asJürgen Weiss, (2002) Market Power and Power Markets. Interfaces 32(5):37-46. https://doi.org/10.1287/inte.32.5.37.74 KeywordsGovernment: energy policiesGames/group decisions: bidding/auctionsPDF download