Market power
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| - | Market | + | '''Market power''' is a concept used in [[game theory]]. It describes the way decisions will be made in certain market layouts. |
== Definition == | == Definition == | ||
| - | Werden defined market power as "the ability of sellers to maintain prices profitably above competitive levels by restricting output below competitive levels" (Hogan 1997 from Werden 1996) | + | Werden defined market power as "the ability of sellers to maintain prices profitably above competitive levels by restricting output below competitive levels." (Hogan 1997 from Werden 1996) |
This concept is applicable to the power market, which is supposedly a free market, but due to restrictions of distribution infrastructure maintains some level of monopolies. It is true that power supply companies can be located strategically so that they can control the market at will. | This concept is applicable to the power market, which is supposedly a free market, but due to restrictions of distribution infrastructure maintains some level of monopolies. It is true that power supply companies can be located strategically so that they can control the market at will. | ||
== See also == | == See also == | ||
| - | *[[ | + | *[[Game theory]] |
| - | *[[ | + | *[[Non-cooperative game]] |
== References == | == References == | ||
Current revision
Market power is a concept used in game theory. It describes the way decisions will be made in certain market layouts.
Definition
Werden defined market power as "the ability of sellers to maintain prices profitably above competitive levels by restricting output below competitive levels." (Hogan 1997 from Werden 1996) This concept is applicable to the power market, which is supposedly a free market, but due to restrictions of distribution infrastructure maintains some level of monopolies. It is true that power supply companies can be located strategically so that they can control the market at will.
See also
References
- Hogan WW, A Market Power Model with Strategic Interaction in Electricity Networks (1997)
- Werden GJ, Identifying Market Power in Electric Generation, Public Utilities Fortnightly (1996)
