Retail power market competition with endogenous entry decision—An auction data analysis |
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| Authors: | Nobuhiro Hosoe Shingo Takagi |
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| Institution: | 1. National Graduate Institute for Policy Studies, 7-22-1 Roppongi, Minato, Tokyo 106-8677, Japan;2. Graduate School of Economics and Business Administration, Hokkaido University, Kita 9 Nishi 7, Kita, Sapporo 060-0809, Japan |
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| Abstract: | Deregulation in the electric power industry has been aimed at promoting competition and thereby enhancing the industry’s efficiency. We use the auction data of public power procurements to study the impact of the reform on the retail power market in Japan. We quantify this impact by measuring a decline in power charges, controlling for the endogeneity bias caused by the entrants’ bid-submission decisions. Our results suggest that power charges would decline by about 0.48 yen/kW h on average when two or more providers bid at an auction. |
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