Nonlinear Pricing and Tariff Differentiation: Evidence from the British Electricity Market

Davies, Stephen; Price, Catherine Waddams; Wilson, Christopher

doi:10.5547/01956574.35.1.4

Cited by 11 publications

(12 citation statements)

References 36 publications

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“…For the UK retail electricity market, Davies et al (2014) present evidence suggesting that firms deliberately differentiated their tariff structures, resulting in market segmentation according to consumers' usage. For the US mobile telephone sector, Seim and Viard (2011) show that entry induces firms to lower prices on average and to offer larger menus with more evenly spread usage plans that give benefits to high-valuation consumers in particular.…”

Section: Introductionmentioning

confidence: 94%

Market Liberalization: Price Dispersion, Price Discrimination and Consumer Search in the German Electricity Markets

et al. 2018

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. AbstractWe study how consumer search affects pricing in markets with incumbents and entrants using panel data on German electricity retail markets. Consumers observe the baseline price of the incumbent and decide whether or not to search. Incumbent providers can price discriminate between searching and loyal consumers. Empirically we show that local incumbents increase their baseline rate while entrants decrease their tariffs if consumer search increases. Moreover, the incumbent price discriminates more strongly in markets with more consumer search. Using a theoretical model, we show that these pricing patterns are consistent with the strategic interaction of profit-maximizing firms.

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Section: Introductionmentioning

confidence: 94%

Market Liberalization: Price Dispersion, Price Discrimination and Consumer Search in the German Electricity Markets

et al. 2018

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“…associated with legacy networks) . In fact, Davies et al (2014) find over 63% of the variance in marginal prices and at least 82% of the variance in fixed charges can be explained by the variation within-region. Their study further suggests that asymmetric costs and other factors, including brand loyalty and market frictions, only partially influence price dispersion compared to tariff differentiation.…”

Section: Methodsmentioning

confidence: 98%

“…Nonetheless, Ofgem acknowledges that whilst some regions exhibit higher distributional charges they are, in some instances, partly offset by lower transmission charges. On the other hand, Davies et al (2014) argue that the key source of price dispersion, in a given time period, is within-region (e.g. attributed to incumbent suppliers) rather than between-regions (e.g.…”

Section: Methodsmentioning

confidence: 99%

Fuel poverty and financial distress

et al. 2021

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Governments and advocacy groups have drawn attention to the precarious position of those members of society who are unable to attain an adequate level of energy services, i.e. the fuel poor. Concerns have also arisen about the ability of fuel poor individuals to adapt to the hardship recently brought about by the COVID-19 pandemic. This paper contributes to the literature by exploring empirically the link between fuel poverty and financial distress prior to and during the first wave the COVID-19 pandemic. The analysis is based on the most recent longitudinal, nationally representative survey of the United Kingdom, Understanding Society (UKHLS, Wave 10, January 2018–February 2020). After correcting for the effects of potential endogeneity in the variables of interest, our results identify a statistically robust relationship between fuel poverty indicators and self-reported measures of current financial distress, with stronger effects for subjective indicators. The fuel poverty indicators however exert only a limited influence on an individual's expectation of their future financial situation. Our analysis of the first wave of the COVID-19 pandemic also confirms that fuel poverty contributed to financial distress. Our main findings are robust to a suite of specification and sensitivity checks. Our results lead to recommend assessing measures which target fuel poverty on the basis of their potential indirect effect on financial distress.

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“…Stephen's research found that the ratio of fixed cost and variable cost has a systematic difference trend in different segments according to the user consumption. Thus, mutual subsidies for different segments are done through FM ratio model [12]. Klaus, from the perspective of asymmetric competition between new entrants and in-service suppliers, finds that the retailer pricing strategy may consider the information level of consumers through empirical research on German retail power market.…”

Section: Price Discrimination In Electricity Industrymentioning

confidence: 99%

Pricing Mechanism of Charging Pile Power Supply Market——Based on RTP Theory and Price Discrimination Model

Ding

Zhang

2021

E3S Web Conf.

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Based on the data of monopoly enterprises in China’s new energy charging pile power retail market, this paper explores the application of RTP differential pricing in new areas. First of all, from the perspective of business, this paper constructs the incentive cost model of low period which can minimize the supply pressure of power sales enterprises. Then, from the perspective of charging consumers, based on the assumption of user’s conversion cost, an improved demand response model is established according to the price elasticity. The paper is to consider the premise of maximizing social welfare, in the supply and demand of both sides to improve the pressure of electricity measurement, to minimize the operation and maintenance costs in peak and trough period.

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Nonlinear Pricing and Tariff Differentiation: Evidence from the British Electricity Market

Cited by 11 publications

References 36 publications

Market Liberalization: Price Dispersion, Price Discrimination and Consumer Search in the German Electricity Markets

Market Liberalization: Price Dispersion, Price Discrimination and Consumer Search in the German Electricity Markets

Fuel poverty and financial distress

Pricing Mechanism of Charging Pile Power Supply Market——Based on RTP Theory and Price Discrimination Model

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