16 New Trends and Issues Proceedings on Humanities and Social Sciences Issue 4 (2017) 16-22 ISSN 2421-8030 www.prosoc.eu Selected paper of ϱth World CoŶfereŶĐe oŶ BusıŶess, EĐoŶoŵıĐs aŶd MaŶageŵeŶt (BEM-2016) , 12 – 14 May 2016, Istanbul Limak Limra Hotel & Resort, Convention Center Kemer, Antalya-Turkey Unintended Consequences of Interventions in Electricity Production and Consumption. Ivan Sedliacik a *, Matej Bel University, Tajovskeho 10, Banska Bystrica 975 90, Slovakia Jaroslav Dado b , Matej Bel University, Tajovskeho 10, Banska Bystrica 975 90, Slovakia Suggested Citation: Sedliacik, I. & Dado, J. (2017). Unintended Consequences of Interventions in Electricity Production and Consumption. New Trends and Issues Proceedings on Humanities and Social Sciences. [Online]. 04, pp 16- 22. Available from: www.prosoc.eu “eleĐtioŶ aŶd peer reǀieǁ uŶder respoŶsiďilitLJ of Prof. Dr. etiŶ Bekta, GaziosŵaŶpasa UŶiǀers ity, Turkey. © 2017 SciencePark Research, Organization & Counseling. All rights reserved. Abstract Government interventions are contradictory theme in economic science. Subsidies and price control in electricity production and consumption are justified to treat Ŷegatiǀe edžterŶalities suĐh as Đliŵate ĐhaŶges, seĐuritLJ of supplies, iŶŶoǀatioŶ or unemployment issues. Many authors contradict such a treatment and prove to be ineffective. Our main focus in this article is to analyze interventions and their consequences in electricity market in Slovakia. We refer to claim of Mises, that intervention produces unintended consequences, leads to escalating price fixing and at the end it eliminates the market altogether. We examined intention, goals and tools of Slovak regulatory agency and proved those are unduly determined and will not lead to desired ends. We have proved that real outcomes of this policy had led to unintended consequences such as excess of production facilities, declining prices of electricity, decreased profitability of all producers and exit from market of marginal production sources that are not subsidized. We applied mainly Austrian economic school methods, based on methodological individualism, dualism, apriorism and deductive logic, supplemented by descriptive statistics, comparative and classification analysis. Keywords: competition; interventions; price control; submarginal production; Subsidies; * ADDRESS FOR CORRESPONDENCE: Ivan Sedliacik, Matej Bel University, Tajovskeho 10, Banska Bystrica 975 90, Slovakia E-mail address: ivan.sedliacik@umb.sk / Tel.: +421 48 446 11 11