Stabilizing energy markets: A dynamic analysis of price cap regulation in oligopolistic environments

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27240%2F25%3A10259063" target="_blank" >RIV/61989100:27240/25:10259063 - isvavai.cz</a>
Alternative codes found
RIV/61989100:27740/25:10259063
Result on the web
<a href="https://www.sciencedirect.com/science/article/pii/S0140988325007066" target="_blank" >https://www.sciencedirect.com/science/article/pii/S0140988325007066</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1016/j.eneco.2025.108879" target="_blank" >10.1016/j.eneco.2025.108879</a>

Result language
angličtina
Original language name
Stabilizing energy markets: A dynamic analysis of price cap regulation in oligopolistic environments
Original language description
This paper provides a theoretical analysis of Cournot oligopoly dynamics under price cap regulation, particularly in the context of exogenous shocks, akin to recent events in the energy markets. Utilizing the 0-1 chaos test, we identified significant shifts in market behavior, highlighting the sensitivity of oligopolistic energy markets to regulatory parameters. Our findings indicate that improperly set tax policies can lead to chaotic and unstable market conditions. Exogenous shocks can cause firm divergence, which can be mitigated by introducing a short-term price cap. The analysis demonstrates that price caps effectively moderate the impact of exogenous shocks, enabling firms to revert to their pre-shock state without altering market dynamics. Moreover, the results suggest that price caps are more effective than windfall taxes. This research underscores the necessity for precise and adaptive regulatory frameworks to maintain market stability and protect both consumers and businesses from extreme price fluctuations. These insights are vital for policymakers aiming to design interventions that balance market stability with consumer protection in an increasingly interconnected and volatile global economy.
Czech name
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Czech description
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Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
10102 - Applied mathematics

Publication year
2025
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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