Economics

Hedging Fuel Prices: Using Politics Or Using Markets?

Lynne Kiesling On Monday Stumbling and Mumbling had a post on truckers in the UK complaining about high fuel prices. I really like his suggestion: instead of whingeing and bleating for a political solution, why does their trade association not offer price insurance? The fact is, though, that high oil prices are a danger that …

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Wsj Article On Txu’s Feather Ruffling, But That’s Not What Bothers Me

Lynne Kiesling Wednesday’s Wall Street Journal had an interesting front-page article (subscription required) by Rebecca Smith on TXU, the legacy Texas utility that is following unconventional utility strategies in its approach to Texas’s restructured retail electricity market. Smith’s article focuses extensively on TXU’s changes to its customer disconnection policies. TXU follows a 26-day late payment …

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Hotelling Behavior: Chocolate On Michigan Avenue

Lynne Kiesling One of the most fascinating phenomena to be analyzed using industrial organization is the clustering of competing retailers. Ask yourself: why do Oriental rug stores all cluster in the same block? And what about car dealers? Don’t you want to be farther away from your competitors? Enter Harold Hotelling, who developed a simple …

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Should Governments Provide Price Signals? No, They Can’t Do It

Lynne Kiesling Ed Reid tried to post the following comment on my post below regarding the GAO’s report on energy demand in the 21st century: I am concerned about the implications of “providing clear and consistent signals to energy markets”, as opposed to allowing free communication of clear signals among market participants. The US energy …

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New Gao Report On Energy Demand In The 21st Century

Lynne Kiesling On Wednesday the General Accounting Office issued a report on prospects for meeting energy demand in the 21st century. From the abstract: America’s demand for energy has, in recent decades, outpaced its ability to supply energy. As a result, the country has witnessed rapid price increases and volatility in some markets, such as …

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