Detecting collusion in retail electricity markets: Results from Japan for 2005 to 2010.

Abstract This analysis investigates whether the Cournot model of imperfect competition holds true in the Japanese retail electricity market, using monthly data over the period 2005 to 2010. One concern about electricity markets that are open to retail competition is the potential for collusive behavior of some suppliers. A revealed preference test of the Cournot model is conducted, using market price and firm output data, as in Carvajal et al. (2013). The application of the revealed preference test to the retail electricity market in Japan indicates that the possibility of collusive behavior among the incumbents cannot be excluded. Highlights • Whether the Cournot model of imperfect competition holds true is investigated. • A revealed preference test is conducted for the retail electricity market in Japan. • The possibility of collusive behavior is indicated in the retail electricity market. • Market size and firm size affect the possibility of collusion among the incumbents. [ABSTRACT FROM AUTHOR]