Open AccessElectricity Trading in a Successive Oligopoly Market: A Social Welfare Comparison between the Generation and Retail Sectors’ Liberalization
Author(s) -
Keita Yamane
Publication year - 2018
Publication title -
research in economics and management
Language(s) - English
Resource type - Journals
eISSN - 2470-4407
pISSN - 2470-4393
DOI - 10.22158/rem.v3n4p307
Subject(s) - liberalization , oligopoly , cournot competition , social welfare , electricity , welfare , retail market , electricity market , economics , economic surplus , business , electricity retailing , microeconomics , market economy , marketing , electrical engineering , political science , law , engineering
This study models the electricity industry as a successive Cournot oligopoly market to compare the market performance between the generation and retail sectors’ liberalization. We show that, assuming identical fixed costs on free entry into both generation and retail sectors, liberalization of the retail sector can dominate that of the generation sector with regard to social welfare.