A conjectural supply function model for the Italian electricity market

This paper presents a detailed electricity market model for analyzing the price development in the Italian electricity market under varying degrees of competitiveness in the market. The proposed model is more realistic than the models proposed for the Italian market by other studies, as it can be used when price elasticity of electricity demand is zero (the short term electricity demand in Italy is almost price inelastic) and it takes into account the Italian large transmission network with its constraints.