Have customers benefited from electricity retail competition?

Competition in Retail Electricity Supply

CSEM WP 156 Wealth Transfers Among Large Customers from Implementing Real-Time Retail Electricity Pricing

Adoption of real-time electricity pricing — retail prices that vary hourly to reflect changing wholesale prices — removes existing cross-subsidies to those customers that consume disproportionately more when wholesale prices are highest. If their losses are substantial, these customers are likely to oppose RTP initiatives unless there is a supplemental program to offset their loss. Using data o...

Wealth Transfers Among Large Customers from Implementing Real-Time Retail Electricity Pricing

Adoption of real-time electricity pricing—retail prices that vary hourly to reflect changing wholesale prices—removes existing cross-subsidies to those customers that consume disproportionately more when wholesale prices are highest. If their losses are substantial, these customers are likely to oppose RTP initiatives unless there is a supplemental program to offset their loss. Using data on a ...

Do Customers Learn from Experience? Evidence from Retail Banking

We study customers’ adoption and subsequent switching decisions, with regard to a menu of three-part tariff plans offered by a commercial bank. Using a rich panel data set covering 70,000 fee-based checking accounts over 30 months, before and after the introduction of the plans, we find that most customers adopt non-cost-minimizing plans, preferring plans with large monthly allowances and high ...

Optimal Reservation Deposit Policies in the Presence of Rational Customers and Retail Competition

We study two reservation deposit policies for a service rm to increase its revenue through higher capacity utilization. First, under the no deposit policy, the rm requires no reservation deposit and imposes no no show penalty. Anticipating potential no shows, a rm may overbook; hence, there is no guarantee that the reserved service will be provided under the no deposit policy. On the contrary, ...