Energy Campus Nuremberg
Over the last decades, energy markets of many countries had been liberalized. The nature of these markets, and especially the impossibility to store electricity and the fact that the competitiveness of the market for transmissions only can be implemented to a limited extent, result in new questions for decision makers in politics and economics. In contrast to many other markets, competition in the energy market only has effects if market rules can prohibit a misuse of market power and can ensure transparency and speed in daily trading. Besides the decision about regulatory interventions, trade rules do have a significant influence on short- or long-term energy prices, on investment incentives and on chances of success for innovations.
The Chair of Economics and Economic Theory investigates the effects of market design and regulation on energy markets, focusing on decisive economic measures: short- and long-term price developments, investments and incentives for innovation. Emphasis will be put on different pricing rules at the electricity stock exchange, on effects of emission trades on pricing and investments, and on investigation of different rules for regulating the market (like price limits or obligation to tender). Effects of different market designs on the composition of power plant parks will be a particular focus of the research project. The work of the Chair of Economics and Economic Theory is characterized by methods combining theoretical, empirical and experimental research.
Incentives to invest of strategic firms:
Cournot Competition under Uncertainty, Working Paper (2008)
Production under Uncertainty: The Effect of Price Caps. Working Paper (2008) (with G. Zoettl).
Strategic Capacity Choice under Uncertainty: The Impact of Market Structure on Investment and Welfare. Working Paper (2008) (with Gregor Zoettl). (first version: 2005)
Access to Commitment Devices Reduces Investment Incentives in Oligopoly. Working Paper (2005) (with Gregor Zoettl).
Behavior in auctions of majority:
Trade in most liberalized energy markets takes at least partially part through auction platforms. As many technical and economic restrictions must be taken into account, he demands and rules imposed on the market are relatively high. Besides a theoretical analysis of multi-unit auctions, it is also important to know how people are actually behaving while bidding and if rules are properly understood. For this reason we focus on behavior in multi-unit auctions.
Overbidding in First Price Private Value Auctions: Implications of a Multi-Unit Auction Experiment. in: U. Schmidt and S. Traub (eds.), Advances in Public Economics: Utility, Choice, and Welfare, Kluwer Academic Publishers, 2005 (with Dirk Engelmann).
A Supply Function Experiment, Working Paper (2008) (with F. Bolle, A. Ockenfels and X. del Pozo)
Bidding Behavior in Multi-Unit Auctions – An Experimental Investigation and some Theoretical Insights. CERGE-EI WP 210, 2003 (with Dirk Engelmann).
Elaboration of trade rules on the electricity market:
Because of a large number of technical constraints in producing and transforming electricity, electricity exchanges and auctions require complex sets of rules. These are embedded in a highly dynamic market architecture that is subject to constant changes through European efforts of harmonisation and coordination. While most european electricity exchanges were organized as national markets for a long time, nowadays markets are increasingly interrelated. For this reason we focus on the architecture of the electricity market in several articles.
Ein Vergleich ausgewählter europäischer Strombörsen. Zeitschrift für Energiewirtschaft 3 (2008), with Axel Ockenfels and Gregor Zoettl.
Strommarktdesign: Zur Ausgestaltung der Auktionsregeln an der EEX. Zeitschrift für Energiewirtschaft 3 (2008), with Axel Ockenfels and Gregor Zoettl.
Elaboration of emission trade (Work in Progress):
An Experiment on Emission Trading – The Effect of different Allocation Mechanisms (with L. Ilieva)
Emission Trading and Investment Incentives in a perfectly competitive World (with Marcel Östreich and G. Zoettl)
Emission Trading and Investment Incentives under Imperfect Competition (with G. Zoettl)
Axel Ockenfels, Dirk Engelmann, Gregor Zöttl, Lyuba Ilieva, Marcel Östreich, Xavier del Pozo, Friedel Bolle