Measuring the Simultaneous Quantity Game in OMEL Spot Electricity Market

Authors

  • Victor Moutinho DEGEI, University of Aveiro and CEFAGE, University of Évora
  • António Carrizo Moreira University of Aveiro
  • Jorge H. Mota ** DEGEI, University of Aveiro

Abstract

In the electricity spot market the various competitive levels, as well as their subsequent changes in the market equilibrium, are justified by the simultaneous quantity game between electricity generators. It is expected that the dominant market players employ differentiated strategic behaviours, thus, permitting the quantification of such differentiated effects on the use of market power. The various competitive levels, as well as their subsequent changes in the market equilibrium, are justified by the simultaneous quantity game. The results show that the quantities purchased in the spot market for sale in open market influence prices, i.e., when there is an imbalance in the estimated long-term relationship, prices themselves move in order to recover the state of equilibrium, which reveals that, in the long-term, the OMEL Price is weakly exogenous to the cointegration vector, whereas quantities purchased for sale in open market move towards the reestablishment of the long-term equilibrium. Keywords: Market Conduct; Collusion; Electricity Spot Market; Market power. JEL Classifications: D43; L11

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Author Biography

António Carrizo Moreira, University of Aveiro

Department of Economics, Management and Industrial Engineering

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Published

2015-01-04

How to Cite

Moutinho, V., Moreira, A. C., & Mota, J. H. (2015). Measuring the Simultaneous Quantity Game in OMEL Spot Electricity Market. International Journal of Energy Economics and Policy, 5(1), 305–320. Retrieved from https://econjournals.com./index.php/ijeep/article/view/1025

Issue

Vol. 5 No. 1 (2015)

Section

Articles

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