Leadership relations in the Spanish electricity market

In this paper we analyze the leadership relations in Spanish electricity market through a generalized oligopoly model of the Stackelberg class (Watt model). This model shows that leadership relations and market sharing are closely related and reveals that Spanish electricity market shares are a consequence of leadership relations in the market. In the Watt model, leader-follower relations are represented through a structure in levels in such a way that companies within a level compete independently but act as leaders of companies in lower levels and followers of companies in upper levels. We analyze deeply upper levels to show the evolution of competition among major companies during the years 2000 to 2013.