Profile
Keywords: Industrial organization, Energy Economics, Integration of renewables
I am a professor in the Department of Economics. I have a BA from the University of Saskatchewan, an MA from the University of Western Ontario, and a PhD. from the University of British Columbia. My research falls mainly within the area of industrial organization. With coauthors, I have examined pricing and other strategic choices by firms in gasoline retailing, shopping centers, and liquor retailing.My current research is focused on restructured electricity markets, including the role of forward markets on wholesale market outcomes, the effects of carbon pricing, the effect of regulated retail options on competitive retailers, and the integration of renewables.
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Information and Transparency in Wholesale Electricity Markets Brown, David and Andrew Eckert (2018) "Information and Transparency in Wholesale Electricity Markets", Journal of Regulatory Economics, 54(3), 292 - 330.
In this article, we investigate the potential impacts of providing too much information to strategic firms in restructured electricity markets using recent evidence from Alberta. This has important implications as regulators are aiming to increase information transparency as we transition to electricity markets with a higher penetration of renewable resources. We demonstrate that firms can potentially utilize this increased information transparency to elevate market prices.
T12-P05, T14-P03 University of Alberta Publication 2018-11-01 T12-P05, T14-P03 Imperfect competition in electricity markets with renewable generation: The role of renewable compensation policies University of Auckland's Energy Centre - One-day workshop on energy economics and policy issues related to renewable energy.
Presentation: " Imperfect competition in electricity markets with renewable generation: The role of renewable compensation policies" (joint with Andrew Eckert)T12-P05, T14-P03 University of Alberta Activity 2018-08-01 T12-P05, T14-P03 "Imperfect competition in electricity markets with renewable generation: The role of renewable compensation policies University of Alberta's Resource Energy and Environmental Sociology Department Seminar.
Presentation: "Imperfect competition in electricity markets with renewable generation: The role of renewable compensation policies"
T12-P05, T14-P03 University of Alberta Activity 2018-09-21 T12-P05, T14-P03 Information and Transparency in Wholesale Electricity Markets: Evidence from Alberta In this paper, we examine the role of information transparency in Alberta's wholesale electricity market. Using data on firms' bidding behavior, we analyze whether firms utilize information revealed in near real-time through the Historical Trading Report (HTR), which is released 10 minutes after each hour and contains a complete (de-identified) list of every firms' bids into the wholesale market from the previous hour. We demonstrate that firms are often able to identify the offers of specific rivals by offer patterns adopted by those firms. For one of these firms, these patterns are associated with higher offer prices. This is consistent with suggestions by Alberta's Market Surveillance Administrator that firms may be utilizing unique bidding patterns to reveal their identities to their rivals. We show that certain firms appear to respond to rival offer changes with a lag consistent with responding to information revealed through the HTR, and that they respond differently to different firms, suggesting that they are able to infer identification. However, we find limited evidence that firms respond differently to information disclosed in the HTR when one of the large firms in our sample utilizes its unique bidding patternT12-P05, T14-P03 University of Alberta Activity 2018-06-02 T12-P05, T14-P03 Information and Transparency in Wholesale Electricity Markets: Evidence from Alberta Information and Transparency in Wholesale Electricity Markets:
Evidence from Alberta
In this article, we investigate the potential impacts of providing too much information to strategic firms in restructured electricity markets using recent evidence from Alberta. This has important implications as regulators are aiming to increase information transparency as we transition to electricity markets with a higher penetration of renewable resources. We demonstrate that firms can potentially utilize this increased information transparency to elevate market prices.
T12-P05, T14-P03 University of Alberta Activity 2018-08-01 T12-P05, T14-P03 Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior? "Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior?" University of Alberta Working Paper.
Abstract:
Suspicions of coordinated behaviour may arise when firms are observed behaving in conspicuous ways that could be designed to communicate with rivals. .Unfortunately, the observation of anomalous behaviour not observed among firms not believed to be colluding is insufficient to conclude that coordination to increase profits above non-cooperative levels is taking place. A recent example highlighting these concerns involves the wholesale electricity market in Alberta, in which certain firms have been observed to use patterns in their bids into the market that could reveal their identities and convey information. In this paper, we develop an empirical methodology to examine whether observed offer behaviour by certain firms in Alberta's wholesale electricity market was consistent with firms unilaterally maximizing expected wholesale (spot) market profits, given the bidding behaviour of rival firms. We apply this methodology to hourly offer price and quantity data for the year 2013. Our results suggest that firms could have increased profits through unilateral deviations from their observed offers. For one of the firms, the potential to increase profits through unilateral deviations is greater on days in which certain offer patterns are observed, providing some support for the claim that such patterns may have played a role in coordinating on outcomes that are more profitable than noncooperative equililbria. These results suggest that regulators should exercise caution when undertaking policies that increase information disclosure in concentrated electricity markets where firms interact repeatedly.
Accepted at the Journal of Industrial Economics. A top journal in Industrial Organization. T12-P05, T14-P03 University of Alberta Publication 2022-03-26 T12-P05, T14-P03 Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior? Presented our paper "Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior?". T12-P05, T14-P03 University of Alberta Activity 2019-05-29 T12-P05, T14-P03 Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior? Publication of our paper summary in conference proceedings at the IAEE Montreal Conference in 2019. Paper: "Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior?" IAEE Energy Forum, Summer 2019. T12-P05, T14-P03 University of Alberta Publication 2019-07-16 T12-P05, T14-P03 Pricing Patterns in Wholesale Electricity Markets: Unilateral Market Power or Coordinated Behavior? Presentation at the 53rd annual meeting of the Canadian Economics Association, Banff, AB, May 31, 2019T12-P05, T14-P03 University of Alberta Activity 2019-05-31 T12-P05, T14-P03 Analyzing firm behavior in restructured electricity markets: Empirical challenges with a residual demand analysis Journal Article: "Analyzing firm behavior in restructured electricity markets: Empirical challenges with a residual demand analysis," International Journal of Industrial Organization.
Using data from Alberta’s wholesale electricity market, we demonstrate the challenges that can arise when characterizing a firm’s unilateral expected profit-maximizing offer curve. We illustrate that the residual demand curves faced by firms can be highly non-linear, resulting in non-monotonic, downward sloping, optimal best-response offer curves violating common restrictions imposed on bidding behavior. This can have important implications on the conclusions drawn from such empirical analyses. We identify features of residual demand curves that can lead to these problems, providing guidance to researchers utilizing these methods. We find that a simplified monotonic smoothing of the unconstrained ex-post optimal offer curve can achieve the majority of the expected profits, offering an alternative to calculating the ex-ante expected profit-maximizing offer curve that can be computationally burdensome.T12-P05, T14-P03 University of Alberta Publication 2021-01-06 T12-P05, T14-P03 Why are Power Prices so Darn High? University of Calgary School of Public Policy Energy and Environmental Policy TrendsT12-P05, T14-P03 University of Calgary, University of Alberta Publication 2022-04-20 T12-P05, T14-P03 Procurement auctions for regulated retail service contracts in restructured electricity markets This article was published in Energy Economics in December 2022. T12-P05, T14-P03 University of Alberta Publication 2022-12-01 T12-P05, T14-P03 Evaluating the Impact of Divestitures on Competition: Evidence from Alberta's Wholesale Electricity Market This article has published in the International Journal of Industrial Organization. T12-P05, T14-P03 University of Alberta, University of Calgary Publication 2023-07-05 T12-P05, T14-P03 Information and Transparency: Using Machine Learning to Detect Communication Between Firms This article has been published in the journal "Stanford Computational Antitrust". T12-P05, T14-P03 University of Alberta Publication 2023-10-18 T12-P05, T14-P03 Screening for collusion in wholesale electricity markets: A literature review This article has been published in Utilities Policy in 2023. T12-P05, T14-P03 University of Alberta Publication 2023-12-13 T12-P05, T14-P03 Strategic interaction between wholesale and ancillary service markets This article has been published at the Competition and Regulation in Network Industries. T12-P05, T14-P03 University of Alberta Publication 2023-11-22 T12-P05, T14-P03 Electricity Markets This article is forthcoming as a Book Chapter "The Elgar Encyclopedia on the Economics of Competition, Regulation and Antitrust" edited by Michael Noel. T12-P05, T14-P03, T06-C01 University of Alberta Publication 2024-03-06 T12-P05, T14-P03, T06-C01 Computational Antitrust Achievements Panel member for session on Computational Antitrust Achievements at the Computational Antitrust: Applying Antitrust 3.0 Conference, December 12, 2023T12-P05, T14-P03 University of Alberta Activity 2023-12-12 T12-P05, T14-P03 Using Machine Learning to Detect Tacit Collusion Podcast hosted by Stanford University Codex Center, Computational Antitrust project.T12-P05, T14-P03 University of Alberta Publication 2023-11-04 T12-P05, T14-P03 Evaluating the Role of Information Disclosure on Bidding Behavior in Wholesale Electricity Markets This article has been accepted and is forthcoming at Energy Economics.T12-P05 University of Alberta Publication 2025-03-29 T12-P05
