Thoughts on the susceptibility to analysis of the market-force problems found on the Hungarian electricity generation market.

The study sets out to present the constraints on analysing the market-force problems of the Hungarian electricity generation market by using a Cournot model. The author's thoughts are designed to draw attention to the problem rather than be critical, to decide the extent to which sometimes oversimplified models in economic analyses and the results obtained with them can have practical uses in devising an effective regulatory environment. The study (which follows from Paizs and Meszaros 2003) places less emphasis on questioning the analytical methods of those authors and the results of them than on presenting the possibility of result distortions deriving from model assumptions that simplify reality.