【Empirical Seminar】 Diversified Production and Market Power: Theory and Evidence from Renewables
2024/07/25
研討會日期 : 2024-07-25
時間 : 14:30
主講人 : Professor Junnan He
地點 : B110
主持人 : Professor Chu-An Liu
演講者簡介 : Professor Junnan He received his PhD from Washington University in St.Louis(WUSTL) in 2019. He is an Assistant Professor at Sciences Po. His research areas are Decision theory, Industrial Organization, and Structural Econometrics.
演講摘要 : We show that market power can either exacerbate or mitigate fluctuations in energy prices due to renewable energy availability and provide empirical evidence from the Colombian energy sector, where hydropower generation is prevalent and energy suppliers have a diversified technology portfolio. Incentives to crowding-out rivals make a supplier produce more during a drought if it has access to other technologies with capacities unaffected by the drought. During abundance, instead, access to other technologies reduces a firm’s supply compared to a scenario where these technologies are owned by its rivals, as rivals cannot crowd-out the firm experiencing abundance as easily. Jointly, these two effects create a U-shaped relationship between market concentration and prices when firms have diversified production technologies, which applies more broadly to other industries. Initially, transferring high-cost capacity to a large firm with the most efficient technology lowers prices, but eventually leads to unilateral price increases.
