Ishii Masahiro, Tezuka Koichiro
IERCU Discussion Paper (266) 2014年5月
This paper introduces an oligopoly model for spot prices in non-storable commodity markets under uncertainty. The derived equilibrium spot price captures the effect of market concertration and suppliers' risk attitude on a mark-up. We also propose a simple empirical method to asess mark-ups with the price formulae, and directly apply it to California electricity market as an example. The observed mark-ups are found to depend on both market power and risk premium. The result suggests that the proposed approach can be an effective means of analysis on marke performance, i.e. measuring mark-ups and finding the constituent factors.