Cross-holdings, concentration and information in capacity-constrained sealed bid-offer auctions
Journal
Journal of Economic Behavior and Organization
Subject
Management Science and Operations
Publishing details
Authors / Editors
Ruperez Micola A;Bunn D W
Biographies
Publication Year
2008
Abstract
We present a sequence of simulations to analyse the collusive effects of transparency and different degrees of producer crossholding in energy markets. The results suggest that (a) the functional form of the crossholdings/market prices relationship is not linear and better defined by threshold specifications, (b) public information leads to higher market prices, and (c) more downstream competition reduces the influence of information on upstream coordination and improves it downstream. These results are checked for consistency and rationalised through the social mimicry features of the algorithm.
Keywords
Agent-based simulations; Crossholdings; Market design; Market power
Available on ECCH
No