Should utility incumbents be able to extend their brand name to competitive retail markets? An economic perspective
As retail competition begins, at least for the short run, there should be policy restrictions on an incumbent utility`s ability to extend its brand to an affiliated marketer. However, a utility-affiliated marketer should be permitted to compete in a newly deregulated market using a generic or self-developed brand name. If extending a brand name from an incumbent utility to an affiliated marketer does in fact create real barriers to entry in the retail market, competition will be crippled in this market and consumers will suffer. More important, deregulation will appear to have failed in the electric power market--a consequence with effects reaching past the electricity industry to other industries considering deregulation as a viable policy choice. However, if real barriers to entry are not erected by this type of brand name extension, the industry may suffer from lower quality products, less service, and reduced innovation if policymakers prohibit brand name extension.
- OSTI ID:
- 289994
- Journal Information:
- Electricity Journal, Journal Name: Electricity Journal Journal Issue: 5 Vol. 11; ISSN ELEJE4; ISSN 1040-6190
- Country of Publication:
- United States
- Language:
- English
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