This Website uses cookies. By using this website you are agreeing to our use of cookies and to the terms and conditions listed in our data protection policy. Read more

Journal of Industrial Economics

Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden

Scientific Article in English
Reference
Lundin, Erik (forthcoming). “Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden”. Journal of Industrial Economics.

Author
Erik Lundin

This paper presents an empirical test of the anticompetitive effects of joint ownership by examining the operation of three nuclear plants in Sweden. Since maintenance is the main conduit explaining variation in output, I formulate a model of optimal maintenance allocation given three behavioral assumptions: i) maximal collusion, where all owners’ profits on both nuclear and other output are maximized; ii) Cournot competition, where the majority owners’ profits on both nuclear and other output are maximized; and iii) a divested solution, where all owners’ profits on nuclear output are maximized, but no weight is given to non-nuclear output. The behavior that fits the data best is a “hybrid” model where maximal collusion is only achieved during periods of the year when regulatory oversight is less strict. During the remainder of the year, data is instead most consistent with the divested solution.

Erik Lundin

+46 (0)70 752 5847
erik.lundin@ifn.se