Abstract The natural progression of generators and retailers, following electricity deregulation, to vertically integrate is a contentious subject involving, at one extreme, expectations that a laissez- faire market approach will deliver economic benefits to all participants, and at the other extreme, suspicions that the unusual features of the electricity sector, in providing generators with market power, may not provide electricity consumers with an improved outcome. The objectives of this thesis were to: understand fully the drivers of generators and retailers to vertically integrate and to apply this knowledge to the Queensland electricity market to determine the financial impact on generators, retailers and consumers from vertical integration (VI). A literature review was undertaken of VI in a generic sense, noting the distinction between market contracting and ‘internalisation’, with particular reference to the writings of Oliver Williamson. The Federal Court case involving Australia’s largest electricity retailer, Australian Gas and Light Ltd, seeking approval to purchase a minority shareholding in the Victorian generator Loy Yang Power, was closely examined from the perspectives of theoretical and practical electricity sector VI integration issues. A quantitative analysis was undertaken of an assumed 60% VI of the Queensland electricity market to assess the costs and benefits to generators that vertically integrated and to consumers. The quantified generator benefits included margin elimination, savings in overheads, more rapid decision-making, and demand side management (DSM) savings in deferred capital expenditure on peaking generation and network expenditure through reduced peak demand. To support the quantitative analysis, two scenario models were developed. The first model replicates the process by which generators build up revenue certainty over time from hedge contract sales and bidding of output into the electricity grid. How generator bidding behaviour is affected by the level of hedge cover and hedge contract prices is examined, particularly in regard to how this behavior is affected by the competitive relationship between retailers and generators. The second scenario model replicates the attitude of vertically integrated generators (VIGs) towards offering DSM services by observing how the attitude of individual VIGs is affected by level of peaking generation and by the generation-to-retailing output proportion. It was determined that a combination of these features and particular market scenarios could result in some VIGs being financially worse off by providing DSM services, an important conclusion in the context of the increased community focus on energy conservation. The extent to which VIGs pass on VI and DSM benefits to consumers was calculated under scenarios of weak and strong retail competition. Of most relevance was the difference in market behaviour between retailers that had became vertically integrated, and those that had not, with the latter expected to become less competitive in both the wholesale and retail markets. This outcome was observed to provide generators with additional market power potential, a subject closely examined. The quantitative analysis of the Queensland market concluded that the maximum possible benefit that consumers could expect from VI was $138 million per annum with current DSM technology and strong retail competition, increasing to $156 million per annum if DSM technology improved, for example in regard to more cost-efficient meters. Total possible benefits to VIGs and consumers was estimated at $321 million per annum, so that consumers could expect to receive no more than 50% of total expected benefits from VI. This conclusion is not surprising because generators will only seek to be vertically integrated if they perceive clearly identified benefits from VI. The reasons why consumers are unlikely to receive benefits greater than this are: • $30 million per annum of internal savings being retained by VIGs; • VIGs achieving a minimum $60 million per annum additional revenue benefits through wholesale and retail price increases, arising from their stronger generation and retail positions; and • $75 million per annum of potential DSM benefits not being offered to consumers, because of the reluctance of VIGs to provide DSM services where the outcome could be reduced export revenue, reduced sales revenue and lower pool prices. In summary, using the Queensland market as a case study, in a strongly competitive retail market consumers could expect to receive, at the most, 50% of VI and DSM benefits. However in a weakly competitive retail market, where VIGs retain most of the benefits and are able to achieve higher wholesale prices, the outcome could instead be an overall cost to consumers. The thesis concludes with a brief discussion of policy implications and approaches to addressing key issues arising from increasing VI in deregulated electricity markets.

Thesis (Ph. D.)--Michigan State University. Dept. of Economics, 2006. / Title from PDF t.p. (viewed on June 19, 2009) Includes bibliographical references (p. 110-112). Also issued in print.

Thesis (Ph. D.)--Georgia State University, 2009. / Title supplied by cataloger from ETD form. Omesh Kini, committee chair; Husayn Shahrur, Gerald Gay, Jayant Kale, Harley E. Ryan, committee members. Description based on contents viewed July 30, 2009. Includes bibliographical references.

Thesis (Ph. D.)--University of Chicago, Dept. of Economics, August 1999. / Includes bibliographical references. Also available on the Internet.

Thesis (Ph. D.)--University of Washington, 1999. / Vita. Includes bibliographical references (leaves 95-103).

Thesis (Ph. D.)--University of Rochester, 2003. / Vita. Includes bibliographical references (leaves 79-87).

Thesis (M.S.)--Montana State University--Bozeman, 2007. / Typescript. Chairperson, Graduate Committee: Vincent H. Smith. Includes bibliographical references (leaves 87-89).

Abstract Governments have regarded the electricity industry as a leading industrial sector throughout the history. Because of its strategic importance to industrial development, its impacts on the social and environmental issues and its natural monopoly characteristics, it has been seen necessary to regulate electricity industry effectively. However, in the mid 1980s it was realised that even though transmission and distribution networks are natural monopolies, the scale economies in electricity production at the generating unit level had exhausted at a unit size of about 500 MW. This meant that supply and generation had become potentially competitive activities. In Finland the new Electricity Market Act (EMA) came into force in 1.11.1995. According to it the production and supply of electricity became deregulated and competition was introduced to the industry. The main aim of the law was to improve efficiency. This dissertation analyses, both theoretically and empirically, the impacts of deregulation to the Finnish electricity markets. In chapter two we discuss on the grounds and incentives of the deregulation processes that have been carried out in different countries. We also determine the crucial factors in order succeed in the deregulation process. According to our view the success depend on the number of active players in the wholesale market, the rules of the bidding procedure, the organisation of the demand side operation, the neutrality of transmission grid, the structure of production technologies and the ownership structure of the industry. In chapter three we theoretically model the profit maximising behaviour of the Finnish electricity companies based on different stages of vertical integration and on different stage of competition. According to our results the profit maximising pricing rules of distribution units is dependent on the stage of integration and on the stage of competition. The separated distribution company maximises profits by setting the distribution price equal to the long-run marginal costs plus mark-up determined by price elasticity of demand. The integrated distribution unit has to take also the impacts on the supply unit into account when setting the distribution price. Chapter four considers the consequences of deregulation to the wholesale price of electricity and the market structure of the industry. It is interesting to question whether deregulation in some circumstances may lead to higher prices instead of lower ones. The relationship between the Cournot equilibrium on the one hand and Bertrand equilibrium on the other will be quantitatively explored. The results indicate that deregulation can result in a significant price increase and output decrease in Finland if there occurs Cournot type of competition. In chapter five we consider alternative pricing policies for a regulated distribution company and empirically analyse is it possible to achieve welfare improvements by changing the prevalent price structure to the more efficient one. We use four different pricing methods which are marginal cost pricing, fully distributed cost pricing (FDC), Ramsey pricing and optimal two-part tariffs. The results indicate that it is possible to improve welfare quite markedly by switching from the existing pricing principles to more efficient ones. The resulting welfare is highest if we use the first best prices based on marginal costs or optimal two-part tariffs.

This dissertation consists of three essays in empirical industrial organization. In the first essay, I develop a method of estimating the bargaining power allocation between upstream manufacturers and downstream retailers using limited data. Retailers and manufacturers engage in pairwise Nash bargaining sessions to set wholesale prices, and then retailers set retail prices to maximize their profits. By solving the model using backward induction, I compute marginal costs as functions of bargaining power parameters and choose the parameter that produces marginal costs that best fit the variation of input costs to identify the bargaining power allocation. Using retail market-level data in the yogurt industry, I find that retailers have higher bargaining power and charge higher markups than manufacturers. Additionally, higher retailer bargaining power allows them to negotiate lower wholesale prices, which leads to lower retail prices. Consumers and retailers benefit from higher retailer bargaining power, while manufacturers suffer losses. In the second essay, I simulate vertical mergers using the results in the first essay. Vertical mergers promote efficiency by eliminating double marginalization and lowering upstream rival wholesale prices, but harm welfare by increasing downstream rival costs and introducing upward pricing pressure on retail prices. To compare the relative magnitude of various effects and evaluate their overall impact on the market equilibrium profit and welfare, I simulate vertical mergers between firms of various sizes and compute the change in prices, markups, firm profits, and consumer welfare. The overall consumer welfare increases after a merger, but consumers purchasing nonvertically integrated brands are worse off. In the third essay, I study how consumers learn the healthfulness of ready-to-eat cereals from the introduction of front-of-package nutrition labels and how they make purchase decisions accordingly. I first examine consumers’ purchasing decisions in a static setting and then allow consumers to gradually learn from the FOP labels. In each shopping trip, consumers update their information on the healthfulness of cereals based on FOP labels, and they consider the perceived information when they make purchasing decisions. I find that consumers learn slowly after the introduction of FOP labels, and they prefer cereals with high healthfulness.

La transformación corporativa es un imperativo en el mundo empresarial. Los mercados adquieren cada vez un mayor dinamismo, las nuevas tecnologías disrumpen industrias sin compasión, y los clientes cada vez son más exigentes. Como resultado, empresas de todo el mundo se ven obligadas a transformarse y a buscar nuevas formas de seguir siendo relevantes, mejorar la rentabilidad y desempeño de sus organizaciones y lograr una trayectoria de crecimiento sostenible. Las transformaciones corporativas son, o deberían ser, holísticas e implican naturalmente cambios en el modelo de liderazgo y en los empleados, en las estructuras organizativas, en los procesos internos, en los modelos de negocio y en la estrategia corporativa y de negocio (Laczkowski et al., 2021). Aunque las empresas siempre han tenido que adaptarse a los nuevos entornos empresariales, a las cambiantes dinámicas de mercado y a las demandas de los clientes, el actual periodo de crisis y agitación social y económica resultante de la pandemia del coronavirus y de la guerra entre Rusia y Ucrania está creando una sensación de urgencia sin precedentes en muchas empresas. En consecuencia, es innegable que, en el clima de incertidumbre actual, las empresas se encuentran con la necesidad urgente de transformarse (Cordon, 2022; Terino et al., 2022). Hay quién afirma que el término transformación sea “quizás el término más usado en el mundo de los negocios" (Bucy, Hall & Yakola, 2016). Puede ser que no le falte razón, ya que las transformaciones impregnan todos los aspectos empresariales. Las transformaciones son amplias y muy complejas, aunque, a riesgo de simplificar, podemos genéricamente dividirlas en tres grandes tipologías. Algunas transformaciones son organizativas, cuando las empresas redefinen sus estructuras corporativas y las diferentes funciones y responsabilidades organizativas. Algunas transformaciones son estratégicas, cuando las empresas cambian o adaptan sus modelos de negocio, sus estrategias de llegada al mercado o la escala o el alcance de sus actividades. Algunas son transformaciones digitales (TD), cuando las organizaciones utilizan las tecnologías digitales para reinventar cualquier aspecto de su negocio. Y, francamente, muchas transformaciones son simplemente todo lo anterior, y pueden denominarse básicamente transformaciones corporativas. Numerosos estudios académicos se han centrado en aspectos muy concretos de las transformaciones. En el ámbito organizativo, los investigadores han examinado cómo se reorganizan las empresas para llevar a cabo las transformaciones (Balakrishnan & Das, 2020), cómo emplean métodos de trabajo "ágiles" (Rigby, Sutherland & Takeuchi, 2016; Gobillot, 2016), cómo gestionan el aprendizaje para transformarse con éxito (Schuchmann & Seufert, 2015), cómo rediseñan el trabajo (Richter et al., 2018), cómo exploran colaboraciones con actores internos y externos (Prahalad & Ramaswamy, 2004; Weiblen & Chesbrough, 2015; Furr, O'Keeffe & Dyer, 2016) y, en términos muy generales, cómo se adaptan al cambio (Christensen & Overdorf, 2000; Birkinshaw, Zimmerman & Raisch, 2016). En el frente estratégico, ciertos académicos han estudiado el tema de la transformación y el crecimiento a través de la diversificación (Rumelt, 1982; Thompson, 1984; Hoskisson & Hitt, 1990; Goold & Luchs, 1993), las alianzas corporativas (Eisenhardt & Schoonhoven, 1996; Zollo, Reuer & Singh, 2002; Van den Steen, 2014), las fusiones y adquisiciones (Christensen et al, 2011; Cuatrecasas, 2019), la redefinición de su cartera de negocios (Pidun et al., 2011; Untiedt, Nippa & Pidun, 2013) o la integración vertical (Harrigan, 1983; Stuckey & White, 1993; Rothaermel, Hitt & Jobe, 2006). Otros han estudiado los cambios de modelo de negocio a través de la innovación continua (Steiber & Alänge, 2013), la innovación disruptiva (Christensen & Raynor, 2003), la innovación abierta (Chesbrough, 2003; Gassmann, 2006; Pohlisch, 2020; Papa et al, 2020), la innovación sostenible (Skarzynski & Gibson, 2008), o la disociación estratégica (Teixeira, 2019). Por último, en el ámbito digital, diversos académicos han explorado numerosos aspectos de las TDs. Schwarzmüller et al. (2018) analizaron cómo las TDs han conducido a la redefinición de múltiples funciones y responsabilidades corporativas; y Horlacher y Hess (2016) y Kunisch at al. (2020) estudiaron la aparición de nuevas figuras, como la del Chief Digital Officer. Sousa y Rocha (2019) exploraron las capacidades y habilidades requeridas en los procesos de TD. Fenech et al. (2019) estudiaron cómo las TDs han supuesto importantes cambios en las prácticas de gestión del talento. D'Ippolito et al. (2019) y Rachinger et al. (2019) examinaron la intersección entre las TDs y la innovación de modelos de negocio. Y Wrede et al. (2020) y Porfírio et al. (2021) investigaron el papel de los altos ejecutivos en las TDs. Esta tesis no pretende encasillarse en un área específica de estudio y más bien explora el concepto de las transformaciones corporativas de una forma amplia. Existen múltiples razones para ello, siendo quizás la principal que simpatizo con quienes argumentan que las verdaderas transformaciones son holísticas y deben, por definición, involucrar e incidir sobre todos los ángulos de la empresa si aspiran a tener éxito. A pesar de la ingente literatura que se centra en las transformaciones empresariales, hay muchos aspectos que quedan por estudiar. Esta tesis explora cuatro aspectos interrelacionados de las transformaciones corporativas que han sido poco estudiados por los académicos, por diversas razones -desde la impopularidad de ciertas herramientas, el estudio limitado de las estrategias de transformación en ciertos sectores o geografías, o la contemporaneidad de ciertos eventos. Aunque unidos por un tema común, estos artículos contribuyen por separado a cuatro corrientes de investigación independientes pero interconectadas. Desde un punto de vista práctico, esta tesis pretende contribuir a responder a cuatro preguntas críticas en cualquier proceso de transformación empresarial, a saber: ¿Cuál es la combinación adecuada de mercados y negocios en los que la empresa debe estar presente? (Capítulo 5) ¿Cuál es el posicionamiento adecuado en la cadena de valor de la empresa en un contexto de mercado cambiante? (Capítulo 6) ¿Qué herramientas estratégicas puede aprovechar la empresa para transformar su negocio? (Capítulo 7) ¿Cómo puede la empresa gestionar eficazmente un proceso de transformación? (Capítulo 8). Por supuesto, estas preguntas son tan amplias que esta tesis nunca podría aspirar a responderlas de forma categórica. De hecho, este trabajo de investigación pretende realizar una contribución original, desde una perspectiva o ángulo novedoso, que pueda hacer avanzar nuestra comprensión colectiva de las prácticas estratégicas y de gestión adecuadas que deben aplicarse en los procesos de transformación, y servir de apoyo y referencia para futuras investigaciones.