In this paper, we aim to model the vertical relation between retailers and suppliers in the food industry whereby retailers exercise seller power in their relation with consumers and buyer power in their relation with producers. We then evaluate the degree of price transmission, relative to the perfectly competitive benchmark, from the farm to the retail sector assuming a supply shock. With the...

Transformation of the monopolistic electric industry into a competitive and free market system is underscored by the wide price variation of electricity. To address price variation, the Federal Energy Regulatory Commission has proposed the development of fair competition in the wholesale power market as a first step toward full deregulation of the industry. This paper will discuss the steps tha...

We describe competition over space between a competitive shipping industry (truck-barge) and one with market power (the railroad). The latter prices so as to "beat the competition" in equilibrium, or else at the monopoly price, if that is lower. The monopoly price rises more slowly than do the costs of transportation (freight absorption) if the spatial demand at each point is log-concave. With ...

This paper presents several techniques for recovering cost function estimates for electricity generation from a model of optimal bidding behavior in a competitive electricity market. Two techniques are developed based on different models of the price-setting process in a competitive electricity market. The first assumes that the firm chooses the price that maximizes its realized profits given t...

AMID A PERIOD OF UNPRECEDENTED CHANGE AND IMprovement in the US health system, the changes leading to larger local hospitals and health systems, including academic medical centers, are cause for concern. For decades, the dominant business strategy of local hospitals and health systems has been to gain local and regional market share and use that local market power to increase prices charged to ...

The platform—a business model that creates value by connecting groups of users—is increasingly popular in many industries. Extant papers largely assume that platforms dominate the pricing decision, whereas in practice, prices in business-to-business transactions are often determined by a bargaining process. We study how the relative bargaining power of business partners affects pricing and comp...

The platform—a business model that creates value by connecting groups of users—is increasingly popular in many industries. Extant papers largely assume that platforms dominate the pricing decision, whereas in practice, prices in business-to-business transactions are often determined by a bargaining process. We study how the relative bargaining power of business partners affects pricing and comp...

Non-storability of a commodity implies the independence of corresponding spot and futures prices. We investigate empirically the case of electricity and show that a relation does emerge between spots and forwards. This is because of the links in storable fuels used for production and behavioural biases in power trading. The latter cause a significant influence of the electricity spot price on t...

This article estimates price-cost margins for the Portuguese markets in a context of imperfect competition in the labour market. The database used includes virtually the universe of Portuguese fi rms for the period 2005-2009. The results strongly reject the hypothesis of perfect competition in both labour and product markets. Estimated price-cost margins are very heterogeneous across markets an...

The uniform-price auction is used in many regional electricity procurement auctions and its “collusive-seeming equilibria” have been linked to potential exercise of market power. Such equilibria do not exist, however, if a small amount of cash is split among rationed bidders. To shed light on what drives this result, I also examine variations in which the auctioneer is able to increase and/or d...