Competition Reduces Prices Volatility & Shaves Demand

----- Forwarded by Miyung Buster/ENRON_DEVELOPMENT on 05/08/2001 12:11 PM
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Rob Bradley@ENRON
05/08/2001 12:05 PM

To: Miyung Buster/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:
Subject: Competition Reduces Prices Volatility & Shaves Demand

Please distribute. Dr. Smith is well known for his work in experimental
economics where he gets people together under largely controlled conditions
and finds support for the laws of economics.

Consumer choice will reduce electricity prices and their volatility
----------
by Vernon L. Smith
Experiments conducted at the economic sciences lab at the
University of Arizona show that giving consumers the
options
of pricing power at different rates at different times
of
the day vastly reduced price volatility. (05/01)

http://www.mercatus.org/research/smithchoice.pdf

http://www.mercatus.org/research/smithdemand.pdf