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We analyze the effects of the adoption of real‐time pricing (RTP) of electricity when generating firms have market power. We find that an increase in consumers on RTP contracts decreases peak prices and increases off‐peak prices, increases consumer surplus (both for switching and non‐switching consumers) and welfare, while decreasing industry profits, with these effects being magnified by the extent of market power. We illustrate these results by calibrating our model to the New Zealand electricity market, and find that taking into account the market power of generating firms increases the efficiency gains from RTP adoption by 41%. [ABSTRACT FROM AUTHOR]

Analyzes the antitrust case involving Clear Communications and Telecom over the problem of network interconnection in the telecommunications industry in New Zealand. Overview of the Clear-Telecom litigation; Model of interconnection; Implications of the Baumol-Willig rule on the bargaining position of Telecom; Distinction between competition and efficiency.