Working Paper No. 1015

Strategic Withholding through Production Failures

Published: March 31, 2014Pages: 31Keywords: Electricity markets; Urgent Market Messages (UMMs); Unplanned failuresJEL-codes: L49; L94

Strategic Withholding through Production Failures Sara Fogelberg and Ewa Lazarczyk


Anecdotal evidence indicates that electricity producers use production failures to disguise strategic reductions of capacity in order to influence prices, but systematic evidence is lacking. We use a quasi-experimental set up and data from the Swedish energy market to examine such behavior. In a market without strategic withholding, the decision of reporting a failure should be independent of the market price. We show that marginal producers in fact base their decision to report a failure in part on prices, which indicates that failures are a result of economic incentives as well as of technical problems.

Global index of the sharing economy

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Andreas Bergh, IFN and Lund University, is one of the authors of this book. The Timbro Sharing Economy Index is the first global index of the sharing economy. The index has been compiled using traffic volume data and scraped data, and provides a unique insight into the driving factors behind the peer-to-peer economy.

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