Engineering
8 years ago

Relative price cap regulation maximizes social welfare in electricity peak-load pricing.

2 views
Effects Comparison of Peak-Load Price under Price Cap Regulation
Ze Ye, Cai Jian-gang

Paper Summary

The study looked at how different price regulations affect peak-load prices in the electricity industry. Relative price cap regulation is better than absolute price cap regulation, leading to peak-load prices that maximize social welfare. Whether using Laspeyres or Paasche price index, the effects are the same.

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