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
Depositing User: Catherine Waddams
Date Deposited: 08 Apr 2011 08:59
Last Modified: 01 Jun 2020 23:38
URI: https://ueaeprints.uea.ac.uk/id/eprint/28513
DOI:

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