How Far Does Economic Theory Explain Competitive Nonlinear Pricing in Practice?

Davies, Stephen, Waddams, Catherine and Wilson, Chris M. (2009) How Far Does Economic Theory Explain Competitive Nonlinear Pricing in Practice? Working Paper. Centre for Competition Policy.

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Abstract

Liberalisation of the British electricity market, in which previously monopolised regional markets were exposed to large-scale entry, is used to test the propositions of several recent theoretical papers on oligopolistic nonlinear pricing. Consistent with those theories, each oligopolist offered a single two-part electricity tariff, and a lump sum discount to consumers who purchased both electricity and gas. However, inconsistent with those theories, firms’ two-part tariffs are heterogeneous in ways that cannot be attributed to cost. We establish a series of stylised facts about the nature of these asymmetries between firms and use them to confront established theory.

Item Type:	Monograph (Working Paper)
Faculty \ School:	Faculty of Social Sciences > Norwich Business School Faculty of Social Sciences > School of Economics
UEA Research Groups:	Faculty of Social Sciences > Research Groups > Industrial Economics Faculty of Social Sciences > Research Centres > Centre for Competition Policy Faculty of Social Sciences > Research Groups > Responsible Business Regulation Group
Depositing User:	Catherine Waddams
Date Deposited:	08 Apr 2011 08:59
Last Modified:	13 May 2023 01:11
URI:	https://ueaeprints.uea.ac.uk/id/eprint/28513
DOI:

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