Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior?*

We examine allegations that firms in Alberta's electricity industry manipulated public information to coordinate in the wholesale market. We investigate whether bids by firms who employed unique pricing patterns were consistent with unilateral expected profit maximization. Our results suggest that these firms could have increased expected profits through unilateral deviations. For one firm, the potential to increase profits is greater on days when certain offer patterns are observed, providing support for the claim that such patterns may have assisted coordination on high-priced outcomes. These results suggest that regulators should exercise caution when designing information disclosure policies in concentrated electricity markets.

• Publication year

  2019

• Venue

  Journal of Industrial Economics

• Publication date

  2019-06-26

• Fields of study

  Business, Economics

• Identifiers
  DOI 10.1111/joie.12284
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Analyzing firm behavior in restructured electricity markets: Empirical challenges with a residual demand analysis

  2021cited by this paper
• Measuring the Incentive to Collude: The Vitamin Cartels, 1990–99

  2021cited by this paper
• Coal Statistics

  2020cited by this paper
• Subjects in the lab, activists in the field: public goods and punishment

  2020cited by this paper
• Price Leadership and Uncertainty about Future Costs

  2020cited by this paper
• Macroeconomic conditions and child schooling in Turkey

  2020cited by this paper
• Data Driven Regulation: Theory and Application to Missing Bids

  2019cited by this paper
• Learning to Coordinate: A Study in Retail Gasoline

  2019cited by this paper
• Collusive pricing patterns in the US airline industry

  2019cited by this paper
• Uniform Pricing in U.S. Retail Chains*

  2019cited by this paper
• Son Preference and Child Under nutrition in the Arab Countries: Is There a Gender Bias against Girls?

  2019cited by this paper
• A continuous-time model of bilateral bargaining

  2019cited by this paper
• Maintaining Privacy in Cartels

  2018cited by this paper
• Should First-Price Auctions Be Transparent?

  2018cited by this paper
• Fiscal austerity in emerging market economies

  2018cited by this paper
• Carbon Pricing with an Output Subsidy under Imperfect Competition: The Case of Alberta's Restructured Electricity Market

  2018cited by this paper
• Information and transparency in wholesale electricity markets: evidence from Alberta

  2018influential reference
• Comparing auction designs where suppliers have uncertain costs and uncertain pivotal status

  2018cited by this paper
• SCREENING FOR BID RIGGING—DOES IT WORK?

  2018cited by this paper
• Analyzing the Impact of Electricity Market Structure Changes and Mergers: The Importance of Forward Commitments

  2017influential reference
• Does Strategic Ability Affect Efficiency? Evidence from Electricity Markets

  2017cited by this paper
• Auction cartels and the absence of efficient communication

  2017cited by this paper
• Detecting Bidders Groups in Collusive Auctions

  2016cited by this paper
• On Communication and Collusion

  2016cited by this paper
• Costs of Managerial Attention and Activity as a Source of Sticky Prices: Structural Estimates from an Online Market

  2016cited by this paper
• Essays on Market Power in the Alberta Wholesale Electricity Market

  2016cited by this paper
• Measuring Market Power and the Efficiency of Alberta's Restructured Electricity Market: An Energy-Only Market Design

  2015influential reference
• Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2020

  2014influential reference
• Odd Prices at Retail Gasoline Stations : Focal Point Pricing and Tacit Collusion

  2014cited by this paper
• Detecting Large-Scale Collusion in Procurement Auctions

  2014cited by this paper
• Complementary Bidding Mechanisms and Startup Costs in Electricity Markets

  2014influential reference
• Transparency in Electricity Markets

  2013cited by this paper
• Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case

  2013cited by this paper
• Appendix to " The Relative E ffi cacy of Price Announcements and Express Communication for Collusion : Experimental Findings "

  2013cited by this paper
• Multi-Unit Auctions

  2013cited by this paper
• Power Plant Cycling Costs

  2012cited by this paper
• Screens for Conspiracies and Their Multiple Applications

  2010cited by this paper
• Understanding strategic bidding in multi‐unit auctions: a case study of the Texas electricity spot market

  2008influential reference
• Strategic Supply Function Competition with Private Information

  2008cited by this paper
• Quantifying the supply-side benefits from forward contracting in wholesale electricity markets

  2007influential reference
• Price Wars and Collusion in the Spanish Electricity Market

  2005cited by this paper
• Tacit collusion and capacity withholding in repeated uniform price auctions

  2005cited by this paper
• Market Power in the England and Wales Wholesale Electricity Market 1995-2000

  2004cited by this paper
• Theory and Application of Linear Supply Function Equilibrium in Electricity Markets

  2004cited by this paper
• Tacit Collusion in Repeated Auctions: Uniform Versus Discriminatory

  2003cited by this paper
• Measuring Unilateral Market Power in Wholesale Electricity Markets: The California Market, 1998-2000

  2003cited by this paper
• Tacit Collusion in the Frequently Repeated Multi-Unit Uniform Price Auction for Wholesale Electricity in England and Wales

  2002cited by this paper
• Collusive Bidding: Lessons from the FCC Spectrum Auctions

  2000cited by this paper
• An Empirical Analysis of the Impact of Hedge Contracts on Bidding Behavior in a Competitive Electricity Market

  2000cited by this paper
• Information exchanges among firms and their impact on competition

  1995cited by this paper
• Cournot Competition, Forward Markets and Efficiency

  1993cited by this paper
• Supply function equilibria and the danger of tacit collusion: The case of spot markets for electricity

  1992influential reference
• Supply Function Equilibria in Oligopoly under Uncertainty

  1989cited by this paper
• NONCOOPERATIVE COLLUSION UNDER IMPERFECT PRICE INFORMATION

  1984cited by this paper
• A Theory of Oligopoly

  1964cited by this paper

• Wholesale price prediction: The role of information and transparency

  2026cites this paper
• Algorithmes de prix et traitement des risques de collusion anticoncurrentielle

  2025cites this paper
• Evaluating the role of information disclosure on bidding behavior in wholesale electricity markets

  2025cites this paper
• The effect of electricity time-of-use plans: Evidence from the industrial sector in China

  2025cites this paper
• Economic effects in wholesale electricity markets from endogenous long-term forward contracts indexed to spot conditions

  2025cites this paper
• Redesigning automated market power mitigation in electricity markets

  2024cites this paper
• A Novel Data Mining Algorithm for Power Marketing Information

  2023cites this paper
• Evaluating the Impact of Divestitures on Competition: Evidence from Alberta’s Wholesale Electricity Market

  2023cites this paper
• Price and Quantity Discovery without Commitment

  2023cites this paper
• Screening for collusion in wholesale electricity markets: A literature review

  2023cites this paper
• Application of Decision Tree Classification Algorithm in Power Marketing

  2023cites this paper
• A review of market power‐mitigation mechanisms in electricity markets

  2022cites this paper
• Residential electricity pricing in Texas's competitive retail market

  2020cites this paper
• Offer Price Information and the Exercise of Market Power: The Effect of the Publication of the Historical Trading Report on Competition in the Alberta Electricity Market

  2020cites this paper