Price Wars and Collusion in the Spanish Electricity Market

We analyze the time-series of prices in the Spanish electricity market by means of a time varying-transition-probability Markov switching model. Accounting for changes in demand and cost conditions (which re°ect changes in input costs, capacity avail- ability and hydro power), we show that the time-series of prices is characterized by two signi¯cantly di®erent price levels. Based on a Green and Porter (1984)'s type of model that introduces several institutional details, we construct trigger variables that a®ect the likelihood of starting a price war. By interpreting the signs of the triggers, we are able to infer some of the properties of the collusive strategy that ¯rms might have followed. We obtain more empirical support to Green and Porter's model than previous studies

A New Class of Particle in 2+1 Dimensions

In two spatial dimensions, spin characterizes how particle states re-phase under changes of frame that leave their momentum and energy invariant. Massless particles can in principle have non-trivial spin in this sense, but all existing field theories only describe the trivial case. This letter presents a field theory for a massless particle with non-trivial physical spin. These particles are the 2+1-dimensional analogues of "continuous-spin" particles in 3+1 dimensions, but here they have only two real degrees of freedom, related by parity. They can be understood as massless generalizations of anyons, but are simpler in key respects.Comment: 4 page

The Fall in British Electricity Prices: Market Rules, Market Structure, or Both?

In this paper we investigate the factors contributing to the fall in the Lerner Index (price-cost margin) in the British electricity market during the 90s. A first stage of our analysis models the number of breaks in the Lerner Index and their dating as unknowns. Our results suggest the existence of one structural break in the time series of the Lerner Index. The break point interval includes the go-live of the New Electricity Trading Arrangements (NETA), but also several other (but not all) regulatory interventions. In a second stage, we construct a general regression model for the Lerner index as a function of the regulatory interventions within the estimated break point interval, the Herfindahl- Hirschman Index (HHI), and the demand-capacity ratio. The results show that both the HHI and the demand-capacity ratio are strongly significant for explaining the fall in the Lerner Index. NETA is also significant, even when the Lerner Index is corrected for the influence of the HHI and the demand-capacity ratio.Electricity Markets, Regulatory Reform, Structural Breaks

Price Wars and Collusion in the Spanish Electricity Market

\We analyze the time-series of prices in the Spanish electricity market by means of a time varying-transition-probability Markov switching model. Accounting for changes in demand and cost conditions (which reflect changes in input costs, capacity availability and hydro power), we show that the time-series of prices is characterized by two significantly different price levels. Based on a Green and Porter (1984)'s type of model that introduces several institutional details, we construct trigger variables that affect the likelihood of starting a price war. By interpreting the signs of the triggers, we are able to infer some of the properties of the collusive strategy that firms might have followed. We obtain more empirical support to Green and Porter's model than previous studies. REVISED: January 2004Electricity Markets, Collusion, Markov Switching

Price Wars and Collusion in the Spanish Electricity Market

We analyze the pattern of pool prices in the Spanish electricity market during 1998 by means of a Time Varying Transition Probabilities Markov switching model. Our purpose is two­fold: firstly, to identify and date the drops in prices that cannot be accounted for by supply nor demand conditions; and secondly, under the assumption that these correspond with reversions to non­cooperative behaviour, to identify the trigger variables upon which a collusive equilibrium could be based upon. Our results confirm the hypothesis that two distinct price levels characterize the time series of pool prices, and point to the conclusion that price wars are induced by changes in the major generators' market shares. In turn, this shows that firms' pricing behaviour is highly influenced by the way in which the so­called Competition Transition Charges (CTCs) are computed.Electricity Markets, Tacit Collusion, Markov Switching

Simplified Models for a First Characterization of New Physics at the LHC

Low-energy SUSY and several other theories that address the hierarchy problem predict pair-production at the LHC of particles with Standard Model quantum numbers that decay to jets, missing energy, and possibly leptons. If an excess of such events is seen in LHC data, a theoretical framework in which to describe it will be essential to constraining the structure of the new physics. We propose a basis of four deliberately simplified models, each specified by only 2-3 masses and 4-5 branching ratios, for use in a first characterization of data. Fits of these simplified models to the data furnish a quantitative presentation of the jet structure, electroweak decays, and heavy-flavor content of the data, independent of detector effects. These fits, together with plots comparing their predictions to distributions in data, can be used as targets for describing the data within any full theoretical model.Comment: 76 pages, 24 figures, 9 table