The Impact of Different Unbundling Scenarios on Concentration and Wholesale Prices in Energy Markets

A recent highly disputed subject of regulating energy markets in Europe is the unbundling of
vertically integrated down- and upstream firms. While legal unbundling is already implemented in
most countries and indisputable in its necessity for approaching regulatory aims, continuative models
as ownership unbundling or the alternative of an independent system operator are still ambiguous.
Hence, this article contributes to the economic analyses of identifying the differences of separate
types of unbundling. Via simulation, we find that legal unbundling brings about the lowest prices in
a market under Cournot competition. Moreover, under Bertrand competition, no differences between
legal unbundling and ownership unbundling can be identified. (author's abstract)