Empirical Essays on Strategic Behavior in the Electricity and Water Sectors

This thesis consists of three chapters, examining strategic behavior in the electricity and water sectors in Sweden. Traditionally, production and distribution in both sectors have been operated by vertically integrated, publicly owned utilities. The electricity sector was deregulated in 1996, creating a competitive wholesale market for electricity while keeping distribution as regulated local monopolies. The water sector has not undergone the same development, and the municipalities are still legally responsible for water provision within their geographical boundaries. Strategic aspects of the price formation process in each of these three markets are devoted a separate chapter in this thesis: the wholesale market for electricity (chapter I), electricity distribution (chapter II), and water provision (chapter III).