Dictatorship, consensus or laissez faire in electric transmission

Authors

  • Fernando Nicchi Pontificia Universidad Católica Argentina; Universidad de Buenos Aires

Keywords:

Expansion, transmission, electricity, transaction costs, auctions, design mechanisms

Abstract

The problem with networks is that, when they are used collectively, they generate conflicts over
property rights and payment obligations. Therefore, there is controversy about the most efficient way for their provision, which extends from laissez faire to the dictatorship. However, you can stop in some sort of consensus, based on the design of mechanisms, appropriate to reveal their preferences to the agents. The process involves an exchange of rights to arrive at the final allocation. If through an auction, you force participants to make trading offers, transaction costs are reduced and the fluidity can only be better. And if we have a more fluid exchange, it is always possible to achieve a more efficient allocation of these property rights. To demonstrate the profits generated by this alternative, this paper presents a simplified model of mechanism in which we can analyze the allocative efficiency of the proposed rule.

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References

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Walras, L. (1874). Éléments d`Économie Politique Pure.

Published

11/11/2019

How to Cite

Nicchi, F. (2019). Dictatorship, consensus or laissez faire in electric transmission. Ensayos De Política Económica, 1(3), 105–115. Retrieved from https://e-revistas.uca.edu.ar/index.php/ENSAYOS/article/view/2436