Journal of Regulatory Economics

, Volume 45, Issue 2, pp 175–193 | Cite as

The effect of regulatory scrutiny: Asymmetric cost pass-through in power wholesale and its end

  • Frieder Mokinski
  • Nikolas M. Wölfing
Original Article


We find an asymmetric pass-through of European emission allowance (EUA) prices to wholesale electricity prices in Germany and show that this asymmetry disappeared in response to a report on investigations by the competition authority. The asymmetric pricing pattern, however, was not detected at the time of the report, nor had it been part of the investigations. Our results therefore provide evidence for the deterring effect of regulatory monitoring on firms which exhibit non-competitive pricing behavior. We do not find any asymmetric pass-through of EUA prices in recent years. Several robustness checks support our results.


Asymmetric price adjustment Regulatory monitoring   Wholesale electricity markets Emissions trading 

JEL Classification

L4 L94 Q41 Q52 



We are grateful for valuable comments from Anna Créti, the participants of the EAERE annual conference 2013, the editor, and an anonymous referee. We thank Anna-Lena Huthmacher for valuable research assistance. Funding was provided from the project “CFI—Climate Change, Financial Markets and Innovation” chaired by Dr. Paschen von Flotow (Sustainable Business Institute—SBI) and supported by the German Ministry for Education and Research. The paper benefited from the discussion with Dr. Paschen von Flotow and Prof. Dr. Dirk Schiereck (Technical University Darmstadt). All remaining errors are those of the authors.

Supplementary material

11149_2013_9233_MOESM1_ESM.pdf (251 kb)
Supplementary material 1 (pdf 250 KB)


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Centre for European Economic Research (ZEW)MannheimGermany
  2. 2.University of KonstanzKonstanzGermany

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