CeDEx
Centre for Decision Research and Experimental Economics

CeDEx Seminar - Emiliya Lazarova (University of East Anglia)

Location
A40 Sir Clive Granger Building
Date(s)
Wednesday 15th February 2017 (14:00-15:00)
Description

A Look Upstream: Market Restructuring, Risk, Procurement Contracts and Efficiency

Abstract:

We study how market deregulation affects the upstream industry both theoretically and empirically. Our theory predicts that firms respond to increases in uncertainty due to deregulation by writing more rigid contracts with their suppliers. Using the restructuring of the U.S. electricity market as our case study, we find support for our theoretical predictions. Our findings imply a greater emphasis on efficiency at coal mines contracting with restructured plants. The evidence suggests a 17\% improvement in productivity at these mines, relative to those contracting with regulated plants. We find, on the other hand, that transaction costs may have increased. We conclude that deregulation has significant impacts upstream from deregulated markets.

Centre for Decision Research and Experimental Economics

Sir Clive Granger Building
University of Nottingham
University Park
Nottingham, NG7 2RD

telephone: +44 (0)115 951 5458
Enquiries: jose.guinotsaporta@nottingham.ac.uk
Experiments: cedex@nottingham.ac.uk