Cournot Competition in Wholesale Electricity Markets: The Nordic Power Exchange, Nord Pool

Reprint No. 2020:8

Author(s): Erik Lundin and Thomas TangeråsYear: 2020 Title: International Journal of Industrial Organization Volume (No.): 68 (January)
Online article (restrictions may apply)
Preliminary version

Horizontal shifts in bid curves observed in wholesale electricity markets are consistent with Cournot competition. Quantity competition reduces the informational requirements associated with evaluating market performance because the price-cost margins of all producers then depend on the same inverse residual demand curve instead of one for each firm. We apply the model to the day-ahead market of the Nordic power exchange, Nord Pool, for the years 2011-13. We reject the null hypothesis of perfect competition in all specifications. Results suggest that the average price-cost margin across the sample period was around four percent.

Lundin, Erik and Thomas Tangerås (2020), "Cournot Competition in Wholesale Electricity Markets: The Nordic Power Exchange, Nord Pool". International Journal of Industrial Organization 68(January), 102536.

Erik Lundin


Mob: +46 70 752 5847

Thomas Tangerås


Ph: +46 8 665 4526
Mob: +46 70 727 5448

Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book


Seminars organized by IFN


To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se