Incumbent Vertical Market Power, Experimentation, and Institutional Design in the Deregulating Electricity Industry

摘要

Despite restructuring legislation in several states and Schumpeterian innovation in customer-focused communication technologies, incumbent vertical market power persists in the deregulating residential retail electricity industry in the form of the incumbent default-service contract. The incumbent default-service contract violates the Bell Doctrine's policy recommendation to quarantine the monopoly when a failure to exit a downstream market has anticompetitive effects. An entrepreneurial theory of competition based on experimentation reinforces that recommendation.