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dc.contributor.authorVAN KOTEN, Silvester
dc.date.accessioned2011-12-05T15:26:28Z
dc.date.available2011-12-05T15:26:28Z
dc.date.issued2011
dc.identifier.citationEuropean Journal of Law and Economics, 2011, Vol. 36, No. 3, pp. 543-573en
dc.identifier.issn1572-9990
dc.identifier.issn0929-1261
dc.identifier.urihttps://hdl.handle.net/1814/19498
dc.descriptionFirst published online on 8 September 2011.en
dc.description.abstractThis paper addresses the effectiveness of auctions and legal unbundling as regulatory measures to tender a vertically integrated industry more competitive. Specifically, I analyze if implementing auctions and legal unbundling can counter market power in an industry where a Vertically Integrated Corporation (VIC) has a monopoly position in an essential, scarce upstream activity and also owns one of the firms active in the competitive downstream activity. In an earlier paper, Van Koten (2011), I showed that in this configuration the VIC, by having its downstream firm bid more aggressively, can—through increased auction revenue—increase its profit, while disadvantaging downstream competitors and lowering efficiency. Here I analyze the regulatory measure of also legally separating the downstream firm from the VIC. I show that such a measure may only be partially effective; the VIC can formulate a simple compensation scheme that does not violate restrictions typically imposed by legal separation but induces the manager of the VIC-owned downstream firm to bid more aggressively. This increases the profits of the VIC, decreases efficiency, and disadvantages downstream competitors.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.relation.ispartofseries[Florence School of Regulation]en
dc.relation.ispartofseries[Energy]en
dc.relation.uriwww.springerlink.comen
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectRegulationen
dc.subjectVertical integrationen
dc.subjectCompetitionen
dc.subjectElectricity marketsen
dc.subjectStrategic delegationen
dc.titleLegal unbundling and auctions in vertically integrated (utilities) marketsen
dc.typeArticleen
dc.identifier.doi10.1007/s10657-011-9269-0
dc.identifier.volume36
dc.identifier.startpage543
dc.identifier.endpage573
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dc.identifier.issue3


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