Transaction cost economics and digital market platforms for electricity


The digital technological changes that we have seen in the past 20 years are starting to affect the electricity industry through what are called smart grid technologies. In this final lecture, Prof. Kiesling discusses the implications of the recent digital transformation on the organizational arrangements in existing utility business models and on the regulatory architecture of the electricity market.


Chassin, David, and Lynne Kiesling. 2008. “Decentralized Coordination through Digital Technology, Dynamic Pricing, and Customer-Driven Control: The GridWise Testbed Demonstration Project,” Electricity Journal 21: 51-59

Jean-Michel Glachant (2018), “Innovation and Disruption at the Grid’s Edge: How Distributed Energy Resources are Disrupting the Utility Business Model,” Economics of Energy and Environmental Policy

Lynne Kiesling (2016), “Implications of Smart Grid Innovation for Organizational Models in Electricity Distribution,” Wiley Smart Grid Handbook (Wiley)

Lynne Kiesling, Michael Munger, & Alexander Theisen (2019), “From Airbnb to Solar: Toward a Transaction Cost Model of a Retail Electricity Platform,” working paper, available at

Munger (2018) Tomorrow 3.0 (Cambridge Press)