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ESTIMATING MARKET POWER IN HOMOGENOUS PRODUCT MARKETS USING A COMPOSED ERROR MODEL: APPLICATION TO THE CALIFORNIA ELECTRICITY MARKET.

This study proposes a novel econometric approach to estimating market power in homogenous product markets. We use a composed error model to estimate the stochastic part of firms' strategic pricing equation. This part is formed by two random variables: a traditional error term, which captures random...

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Published in:Economic Inquiry Vol. 56; no. 2; pp. 1296 - 1322
Main Authors: Orea, Luis, Steinbuks, Jevgenijs
Format: Article
Published: Wiley-Blackwell Apr2018
Subjects:
California
Econometrics
Market power
Electric power distribution
Pricing
Random variables
Online Access:View this record in EBSCOhost

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