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Legally separated joint ownership of bidder and auctioneer: illustrated by the partial deregulation of the EU electricity markets
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SYSNO ASEP 0096031 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Ostatní články Title Legally separated joint ownership of bidder and auctioneer: illustrated by the partial deregulation of the EU electricity markets Title Právně oddělené společné vlastnictví nabízejícího a dražitele: ilustrované na příkladě částečně deregulovaného trhu s elektřinou v EU Author(s) van Koten, Silvester (NHU-N) RID Source Title CERGE-EI Working Paper Series - ISSN 1211-3298
-, č. 346 (2007), s. 1-47Number of pages 47 s. Publication form WWW - WWW Language eng - English Country CZ - Czech Republic Keywords asymmetric auctions ; bidding behavior ; electricity markets Subject RIV AH - Economics R&D Projects LC542 GA MŠMT - Ministry of Education, Youth and Sports (MEYS) CEZ AV0Z70850503 - NHU-N (2005-2011) Annotation Here I analyze the regulatory measure of also legally separating the allied generator from the Vertically Integrated Utilities (VIU); this measure effectively transforms the VIU into a holding company and prevents the 'VIU' from influencing day-to-day decision-making of the 'VIU'-owned generator and bans cross-subsidization between divisions. I show that such a measure may not improve welfare; the holding company can formulate a simple compensation scheme that does not violate the restrictions imposed by legal separation but induces the manager of the allied generator to bid more aggressively, thereby increasing the profits of the holding company and decreasing welfare. Workplace Economics Institute Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2008
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