are contributions of time and money substitutes or complements abstractthis article empirically investigates the relationship between donations of time and money using canadian tax policy reforms that changed the tax price of charitable donations the 1988 reform where a charitable tax deduction was converted to a credit and the 2000 reform in provincial income taxes provide tax price variations plausibly exogenous to individuals unobserved heterogeneity our estimates on cross price effects imply that individuals make more time donations as the tax price of charitable donations increases and hence money and time donations are substitutes as some theories would imply this contrasts with earlier findings using cross sectional data

efficient resource allocation on the basis of priorities many institutions allocate resources by non market mechanisms based on priorities in this paper we introduce a model of resource allocation on the basis of priorities and address the following questions is it possible to allocate resources on the basis of any priority structure if yes when can we do this pareto efficiently without creating incentives for manipulation and consistently across different groups of agents and resource levels we adopt a basic indivisible objects model with a finite number of object types and a finite quota of goods of each type some interesting examples are the determination of access to education allocation of graduate houses offices or tasks agents are assumed to have strict preferences over object types and remaining unassigned an assignment is an allocation of the objects to the agents such that every agent receives at most one object a rule associates an assignment to each preference profile we formalize a priority structure to be a collection of strict priority rankings of individuals indexed by the object types where i a j would be read as i has higher priority for object a than j we assume that the priority structure is exogenously fixed and allow the preferences of the agents to vary a rule is said to violate a priority of i for a if there is a preference profile under which i envies j who is assigned a and publication information econometrica 70 6 november 2002 2489 2497 the copyright to this article is held by the econometric society http www econometricsociety org it may be downloaded printed and reproduced only for personal or classroom use absolutely no downloading or copying may be done for or on behalf of any for profit commercial firm or other commercial purpose without the explicit permission of the econometric society for this purpose contact julie p gordon executive director of the society at jpg northwestern edu i would like to thank faruk gul wolfgang pesendorfer the co editor the four anonymous referees and the participants of the micro theory lunch seminar in princeton university for their comments and suggestions

optimal bidding strategies and modeling of imperfect information among competitive generators the emerging electricity market behaves more like an oligopoly than a perfectly competitive market due to special features such as a limited number of producers large investment size barrier to entry transmission constraints and transmission losses which discourage purchase from distant suppliers this makes it practicable for only a few independent power suppliers to service a given geographic region and in this imperfect market each power supplier can increase its own profit through strategic bidding the profit of each supplier is influenced to varying extents by differences in the degree of imperfection of knowledge of rival suppliers a new framework to build bidding strategies for power suppliers in an electricity market is presented in this paper it is assumed that each supplier bids a linear supply function and that the system is dispatched to minimize customer payments each supplier chooses the coefficients in the linear supply function to maximize benefits subject to expectations about how rival suppliers will bid a stochastic optimization formulation is developed and two methods proposed for describing and solving this problem a numerical example serves to illustrate the essential features of the approach and the results are used to investigate the potential market power

on two competing mechanisms for priority based allocation problems we consider the priority based allocation problem there is a set of indivisible objects with multiple supplies e g schools with seats and a set of agents e g students with priorities over objects e g proximity of residence area we study two well known and competing mechanisms the agentoptimal stable mechanism aosm allots objects via the deferred acceptance algorithm the top trading cycles mechanism ttcm allots objects via gale s top trading cycles algorithm we show that the two mechanisms are equivalent or ttcm is fair i e respects agents priorities or resource monotonic o rpopulation monotonic if and only if the priority structure is acyclic furthermore if aosm fails to be efficient consistent for a problem ttcm also fails to be fair consistent for it however the converse is not necessarily true

optimal integrated generation bidding and scheduling with risk management under a deregulated daily power market in the deregulated power industry a generation company genco sells energy and ancillary services primarily through bidding at a daily market developing effective strategies to optimize hourly bid curves for a hydrothermal power system to maximize profits becomes one of the most important tasks of a genco this paper presents a unified framework for optimizing energy and reserve bidding strategies under a deregulated market in view of high volatilities of market clearing prices mcp the hourly mcps and reserve prices are modeled as discrete random variables whose probability mass functions are predicted with a classification based neural network approach the mean variance method is applied to manage bidding risks where a risk penalty term related to mcp and reserve price variances is added to the objective function to avoid buying too much power from the market at high prices a genco may also require covering at least a certain percentage of its own customer load this self scheduling requirement is modeled similar to the system demand in traditional unit commitment problems the formulation is a stochastic mixed integer optimization with a separable structure an optimization based algorithm combining lagrangian relaxation and stochastic dynamic programming is presented to optimize bids for both energy and reserve markets numerical testing based on an 11 unit system in new england market shows that the method can significantly reduce profit variances and thus reduce bidding risks near optimal energy and reserve bid curves are obtained in 4 5 minutes on a 600 hz pentium iii pc efficient for daily use

constrained school choice an experimental study 31 pages 18 tables jel classification c72 c78 d78 i20 trabajo publicado como articulo en american economic review 100 4 1860 1874 2010 http dx doi org 10 1257 aer 100 4 1860

strategic generation capacity expansion planning with incomplete information to study the competitive behavior among individual generating companies gencos an incomplete information game model is proposed in this paper in which each genco is modeled as an agent each agent makes strategic generation capacity expansion decisions based on its incomplete information on other gencos the formation of this game model falls into a bi level optimization problem the upper level of this problem is the gencos own decision on optimal planning strategies and energy reserve bidding strategies the lower level problem is the iso s market clearing problem that minimizes the cost to supply the load which yields price signals for gencos to calculate their own payoffs a co evolutionary algorithm combined with pattern search is proposed to optimize the search for the nash equilibrium of the competition game with incomplete information the nash equilibrium is obtained if all gencos reach their maximum expected payoff assuming the planning strategies of other gencos remain unchanged the physical withholding of capacity is considered in the energy market and the herfindahl hirschman index is utilized to measure the market concentration the competitive behaviors are analyzed in three policy scenarios based on different market rules for reserve procurement and compensation

intelligent agents for negotiations in market games 2 application for part i see ibid vol 13 no 5 p 1103 8 1998 in competitive markets human decision makers need assistance to determine potential coalitions that they can be part of note that such coalitions are legal provided market power is not monopolized we present an approach for designing specialized intelligent software agents that perform negotiations on behalf of their human counterparts and then suggest market strategies that the human can adopt our negotiation protocol is derived from cooperative game theory however it differs from the game theory literature in requiring virtually no trustworthy information exchange between the potential coalition partners in the part i we presented the negotiation model in this paper we apply it to power markets

strategic self dispatch considering ramping costs in deregulated power markets ramp rates of generators are generally specified within elastic range of the strength of the shaft to safeguard the rotor from fatigue these limits can however be exceeded albeit at the risk of reducing the rotor life such effects on the rotor life can be compensated by incorporating appropriate ramping costs power demand and power price in deregulated power markets have shown a tendency of sudden wide excursions over short intervals of time the ability to respond to such fast change in demand and price can be quite rewarding this provides the motivation to utilize the ramping rates beyond traditional elastic limits this paper studies the strategic use of ramping rates beyond elastic limits in a power producer s self dispatch in a power market with price and demand volatility a set of ramping processes has been developed from ramping cost versus ramping time relationships to derive the total operation cost including ramping costs for various levels of ramping rates exceeding elastic limits a thorough theoretical analysis has been conducted for the selection of the optimal ramping process under different conditions a numerical example is presented to highlight the potential benefits from the optimal use of these ramping processes it is seen that the benefit from the strategic use of ramp rates beyond elastic limits not only depends on the high price in the power market but also on the initial loading of the generator which limits the capacity available for dispatch

optimal response of a power generator to energy agc and reserve pool based markets the electric power industry all over the world is undertaking major regulatory and operational changes the understanding of power supply as a public service is being replaced by the notion that competitive markets constitute a more appropriate framework to supply reliable and cheap electric energy to consumers as mandated by ferc orders 888 and 889 this paper considers simultaneously energy agc and reserve markets in a pool framework it provides a tool to enable a power generator to determine optimally its degree of involvement in each one of these markets a real world case study is analyzed and results are presented

evaluation of alternatives for power system coordination and pooling in a competitive environment the paper defines and classifies essential issues that relate the need for electric power system coordination with the increasing development of competition principles are formulated and a coordination model and a market structure are proposed emphasizing the need for economic dispatch in the wholesale market a detailed comparison is made of the market and pooling implementations developed in argentina and chile countries that have pioneered the creation of competitive markets in the electric energy sector an evaluation of strengths and weaknesses of those two implementations is included

application of games with incomplete information for pricing electricity in deregulated power pools the authors present a game theory approach to the problem of pricing electricity in deregulated marketplaces they assume that an independent operator receives bids by pool participants and defines transactions among participants by looking for the minimum price that satisfies the demand in the pool the competition among pool participants is modeled as a noncooperative game with incomplete information they assume that each pool participant knows its own operation costs but does not know his opponents operation costs the game with incomplete information is transformed into a game with complete but imperfect information and solved using the nash equilibrium idea the approach presented in this paper is geared towards providing support for pricing electricity in deregulated pools

gaming and price spikes in electric power markets many challenging issues arise under the newly deregulated competitive electric power markets instead of centralized decision making in a vertically integrated environment as in the past decision making is now decentralized and driven by market forces gaming and price spikes have been observed in almost every electricity market but explicit analysis of these phenomena is rare in this paper the authors study historical bidding behavior to see how power suppliers and demand service providers were actually bidding in the california day ahead energy market based on their observations they formulate a prisoner s dilemma matrix game and introduce the notion of opportunistic tacit collision to explain strategic bidding behaviors in which suppliers withhold generation capacity from the market to drive up prices this explanation is applicable with or without market power transmission constraints and insufficient supply and is only enhanced by these factors their analysis is generally applicable to any uniform price electricity market in which there is significant insensitivity to price on the demand side

matching markets with mixed ownership the case for a real life assignment mechanism we consider a common indivisible good allocation problem whose popular applications include on campus housing kidney exchange and school choice we show that the so called new house 4 nh4 mechanism which has been in use at mit since the 1980s is equivalent to a natural adaptation of the well known gale shapley gs mechanism we run two experiments comparing nh4 with the prominently advocated top trading cycles ttc mechanism and nh4 with gs we find that under nh4 the participation rate is significantly higher than under ttc based on a new ordinal test of efficiency nh4 is more likely to pareto dominate ttc

revenue adequate bidding strategies in competitive electricity markets energy trading in a competitive electricity market can be modeled as a two level optimization at the top level a centralized economic dispatch ced uses a priority list method to solve the fundamental problem of reliable market clearing with price discovery the lower level consists of a set of decentralized bidding db subproblems the db model uses a self unit scheduling simulator based on parametric dynamic programming to produce hourly bid curves for the central dispatch coordinator unit operating constraints and costs such as the unit minimum up and minimum down times ramp rates and the unit start up no load and sunk capital costs are internalized in the bid curves through the simulator a special algorithm is presented to solve the revenue adequacy problem for marginal units both ced and db models are based on the revenue maximization in contrast with the cost minimization criteria used in the conventional unit commitment uc the proposed method has been tested in a study case and some interesting results have been demonstrated

double sided auction mechanism design in electricity based on maximizing social welfare an efficient electricity double sided auction mechanism should control market power and enhance the social welfare of the electricity market based on this goal the paper designs a new double sided auction mechanism in the new mechanism the social welfare contribution of each participant plays a pivotal role because this contribution is the critical factor in market clearing payment settling and transaction matching rules in particular each winner of the auction can gain transfer payments according to his contribution to social welfare in the electricity market and this gives the mechanism the ability to control the market power of some participants at the same time this mechanism ensures that the market organizer balances his budget we then conduct a theoretical and empirical analysis based on the spanish electricity market both of the results show that compared to the uniform pricing mechanism the new mechanism can reduce market power of participants and enhance the social welfare of the electricity market

the equitable top trading cycles mechanism for school choice the equitable top trading cycles mechanism a particular adaptation of gale s top trading cycles ttc procedure applied to school choice the so called ttc mechanism has attracted much attention both in theory and practice due to its superior efficiency and incentive features we discuss and introduce alternative adaptations of gale s original procedure that can offer improvements over ttc in terms of equity along with various other distributional considerations instead of giving all the trading power to those students with the highest priority for a school we argue for the distribution of the trading rights of all slots of each school this allows them to trade in a thick market where additional constraints can be accommodated by choosing an appropriate pointing rule we propose a particular mechanism of this kind the equitable top trading cycle ettc mechanism which is also pareto efficient and group strategy proof just like ttc and eliminates avoidable justified envy situations ettc generates significantly fewer justified envy situations than ttc both in simulations and the lab

the trend in the male female wage gap in the united states despite the rise in the feminist movement the enactment of equal opportunity legislation and the rapid increase in women s labor force participation a substantial sex differential in wages has persisted in the united states for at least 4 decades measured by hourly earnings of year round workers this wage gap was 31 in 1955 widened to a 35 37 range by the 1960s and early 1970s and then narrowed to 33 by 1982 this paper examines the extent to which changes in the characteristics of men and women in the labor force and other factors can account for the observed pattern the main finding is that increases in women s labor force participation were initially associated with a declining skill level of employed women relative to employed men where skill is measured by years of schooling and job tenure more recently the work experience of employed women has been increasing which helps account for the recent narrowing trend in the wage gap during the 1970s the wage gap probably woul have narrowed m

an ordinal optimization based bidding strategy for electric power suppliers in the daily energy market the deregulation and reconstruction of the electric power industry worldwide raises many challenging issues related to the economic and reliable operation of electric power systems traditional unit commitment or hydrothermal scheduling problems have been integrated with generation resource bidding but the development of optimization based bidding strategies is only at a very preliminary stage this paper presents a bidding strategy based on the theory of ordinal optimization that the ordinal comparisons of performance measures are robust with respect to noise and modeling error and the problems become much easier if the optimization goal is softened from asking for the best to good enough solution the basic idea is to use an approximate model that describes the influence of bidding strategies on the market clearing prices mcp a nominal bid curve is obtained by solving optimal power generation for a given set of mcps via lagrangian relaxation then n bids are generated by perturbing the nominal bid curve the ordinal optimization method is applied to isolate a good enough set s that contains some good bids with high probability by performing rough evaluation the best bid is then selected by solving full hydrothermal scheduling or unit commitment problems for each of the bids in s using ordinal optimization approach we are able to obtain a good enough bidding strategy with reasonable computational effort numerical results using historical mcps from the california market and a generation company with 10 units show that the ordinal optimization based method is efficient

strategic bidding for minimum power output in the competitive power market as deregulation of the power industry is becoming a reality there has been an intense interest in the strategic bidding for suppliers to optimize their benefits the benefit gained by a supplier is related not only to its energy price bid curve but also to its submitted operational parameters such as minimum output etc this is especially so when market size is limited because of a limited number of competitors in the market itself or due to the transmission capacity constraints this paper addresses the study of strategic bidding for minimum output in a deregulated environment the impact of minimum output bids on the market result is analyzed a criterion with regard to minimum output bid to assess the outcome of competition among suppliers is derived the method to optimize the benefit from a supplier s viewpoint by adjusting the bids for the minimum output and price is proposed it is shown that an individual supplier can optimize its own benefit by fine tuning its minimum output and price when there are only a few suppliers dominating the market a fairly thorough theoretical analysis of the bidding for minimum output is illustrated with a numerical example

the incentive announcement effect of demand response on market power mitigation in the electricity market abstract the incentive announcement effect of demand response dr which can mitigate exercising of market power was assessed using a game theory method to analyze player behaviors the profit functions of generation companies dr consumers and normal consumers were formulated and their best response functions derived because the implementation method of a pre announced dr incentive with game theory has not been studied before a sequential game that can make a normal consumer a leader was considered the leader s strategy i e the incentive level is determined by a neutral agent to prevent overuse of the demand resource with this procedure market equilibrium can be obtained by solving the stackelberg game an analytical solution for market equilibrium was derived for a simple case simulations were used to confirm the maintenance of tendencies in a more complex case as a result the market clearing price was reduced and a fairer distribution of the surplus was achieved compared with the result of the oligopoly condition case this indicates that the exercise of market power is affected by the incentive announcement procedure and market power can be mitigated

a dynamic school choice model this paper inspires from a real life assignment problem faced by the mexican ministry of public education we introduce a dynamic school choice problem that consists in assigning positions to overlapping generations of teachers from one period to another teachers can either retain their current positions or choose a preferred one in this framework a solution concept that conciliates the fairness criteria with the individual rationality condition is introduced it is then proved that a solution always exists and that it can be reached by a modified version of the deferred acceptance algorithm of gale and shapley we also show that the mechanism is dynamically strategy proof and respects improvements whenever the set of orders is lexicographic by tenure

genetic algorithm evolution of utility bidding strategies for the competitive marketplace this paper describes an environment in which distribution companies discos and generation companies gencos buy and sell power via double auctions implemented in a regional commodity exchange the electric utilities profits depend on the implementation of a successful bidding strategy in this research a genetic algorithm evolves bidding strategies as gencos and discos trade power a framework in which bidding strategies may be tested and modified is presented this simulated electric commodity exchange can be used offline to predict whether bid strategies will be profitable and successful it can also be used to experimentally verify how bidding behavior affects the competitive electric marketplace

comprehensive bidding strategies with genetic programming finite state automata this research is an extension of the authors previous work in double auctions aimed at developing bidding strategies for electric utilities which trade electricity competitively the improvements detailed in this paper come from using data structures which combine genetic programming and finite state automata termed gp automata the strategies developed by the method described here are adaptive reacting to inputs whereas the previously developed strategies were only suitable in the particular scenario for which they had been designed the strategies encoded in the gp automata are tested in an auction simulator the simulator pits them against other distribution companies distcos and generation companies gencos buying and selling power via double auctions implemented in regional commodity exchanges the gp automata are evolved with a genetic algorithm so that they possess certain characteristics in addition to designing successful bidding strategies whose usage would result in higher profits the resulting strategies can also be designed to imitate certain types of trading behaviors the resulting strategies can be implemented directly in online trading or can be used as realistic competitors in an off line trading simulator

changes in the male female wage gap 1976 85 this study uses detailed information on work experience tenure and on the job training collected in the 1976 and 1985 questionnaires of the panel study of income dynamics to account for changes in wage differentials between white men and white women over these nine years decompositions of changes in the wage gap are used to illustrate the contribution of individual factors between 1976 and 1985 the wage gap between white men and women narrowed by approximately 4 percent this study finds that nearly 50 percent of this reduction was due to average changes in job tenure and other work history variables over this period

mitigation of price spike in unit commitment a probabilistic approach abstract during the last decade electricity markets regulators in latin american countries have been concerned about the increasing costs of electrical energy to this end regulatory changes have been introduced to develop new criteria for price sanction which demonstrates the need to study this problem at the fundamental level until now the alternatives proposed and implemented have been aimed at modifying the way in sanctioning short term energy prices moving away from the rigorous application of the marginal cost theory this situation can be considered as the evidence that the characteristics of latin american electricity markets differ significantly from the ideal conditions that are necessary for the application of this conceptual framework this paper presents a methodology for establishing a metric for energy tariff s risk which is used in a procedure to mitigate price spikes in the process of the short term operational planning unit commitment the proposed methodology considers the most widely used mechanisms for the sanction of real time spot market prices in latin america which are based on the variable production costs the results from the application of this methodology to a test power system with hydrothermal and non conventional wind energy resources show an effective reduction of price volatility

using game theory to analyze electric transmission pricing policies in the united states abstract us public policy towards the private electric power industry is moving away from restrictive regulation and towards promotion of competition alternative policies concerning access to and pricing of transmission are now being discussed similar issues may arise in europe as trade barriers fall our purpose is to show how game theory can help illuminate that debate and identify desirable policies game theory models are used to estimate the possible effects of various policies upon productive efficiency and the distribution of gains among sellers transmitters and buyers of power static cooperative models are used to calculate the possible outcomes of short run transmission games long run games in which the amount of transmission capacity is a decisition variable are modeled as dynamic noncooperative stackelberg games one conclusion is that under some conditions price regulation and mandatory access could hurt power buyers by removing incentives for building transmission capacity another conclusion is that under a system of voluntary access and price regulation it may be better to allow wheeling prices to exceed the marginal cost of transport rather than to risk losing the benefits of cooperation

simultaneous service allocation by average sensitivity method ancillary services and other interconnected services are important especially in a competitive operation environment since these services are costs related they should be allocated in order to send the correct price signal to market participants an average sensitivity method is proposed for allocating services to simultaneous transactions it can provide results close to power flow based methods while requiring as little computational time as traditional sensitivity based approaches except for rare cases it satisfies the requirement of allocation quantity allocation ratio and application feasibility test results indicate that the average sensitivity method is a successful allocation algorithm

the joint determination of union status and union wage effects some tests of alternative models the problems of estimation and interpretation of union wage differentials are examined the properties of cross section and longitudinal estimators are compared estimates are presented and those in the literature summarized conflicting results are obtained longitudinal estimators typically produce results smaller than those of ols while cross section methods instrumental variables or inverse mills ratio raise the estimate the paper offers a reconciliation of these results it supports a more optimistic conclusion than that reached in reviews by freeman and lewis who argued that little has been learned from attempts to deal with the endogeneity issue comparisons between estimators are used to throw light on the process governing union status and to suggest interpretations of union differentials consistent with the current evidence

game theory approach to use of noncommercial power plants under time of use pricing the authors use the game theory approach for evaluating the impact of the introduction of customer owned noncommercial power plants ncp when time of use pricing is used various results from this analysis are derived some of which are that the conflict between ncp customer and the supplier forces the supplier to reduce the price of ncp customers perception of the situation in which they are involved in plays an important role in this conflict the game model analysis presented provides a detailed quantitative information on electricity prices and on the ways of using ncp

optimal electricity supply bidding by markov decision process the bidding decision making problem is studied from a supplier s viewpoint in a spot market environment the decision making problem is formulated as a markov decision process a discrete stochastic optimization method all other suppliers are modeled by their bidding parameters with corresponding probabilities a systematic method is developed to calculate transition probabilities and rewards a simplified market clearing system is also included in the implementation a risk neutral decision maker is assumed the optimal strategy is calculated to maximize the expected reward over a planning horizon simulation cases are used to illustrate the proposed method

house allocation with existing tenants an equivalence abstract we analyze two mechanisms designed to eliminate inefficiencies in house allocation problems where there are both existing tenants and newcomers the first mechanism chooses the unique core allocation of a sister exchange economy constructed by endowing each existing tenant with her current house and each newcomer with a random vacant house the second mechanism chooses an ordering from a given distribution and determines the final outcome as follows assign the agents the best available house one at a time following their ordering in the queue and whenever an agent demands the house of an existing tenant who is still in the line modify the queue by inserting the existing tenant at the top whenever a loop of existing tenants forms assign each of them the house she demands and proceed we show that the first mechanism is equivalent to an extreme case of the second which favors the newcomers

a continuous strategy game for power transactions analysis in competitive electricity markets this article presents a game theory application for analyzing power transactions in a deregulated energy marketplace such as poolco where participants especially generating entities maximize their net profits through optimal bidding strategies i e bidding prices and bidding generations in this article the electricity market for power transactions is modeled as a noncooperative game with complete information where the solution is determined in a continuous strategy domain having recourse to the nash equilibrium idea in order to provide more apprehensible analysis we suggest a new hybrid solution approach employing a two dimensional graphical approach as well as an analytical method finally the proposed approach is demonstrated on a sample power system

a framework for electricity price spike analysis with advanced data mining methods there are many techniques for electricity market price forecasting however most of them are designed for expected price analysis rather than price spike forecasting an effective method of predicting the occurrence of spikes has not yet been observed in the literature so far in this paper a data mining based approach is presented to give a reliable forecast of the occurrence of price spikes combined with the spike value prediction techniques developed by the same authors the proposed approach aims at providing a comprehensive tool for price spike forecasting in this paper feature selection techniques are first described to identify the attributes relevant to the occurrence of spikes a simple introduction to the classification techniques is given for completeness two algorithms support vector machine and probability classifier are chosen to be the spike occurrence predictors and are discussed in detail realistic market data are used to test the proposed model with promising results

a hybrid model for day ahead price forecasting this paper presents a hybrid time series and adaptive wavelet neural network awnn model for the day ahead electricity market clearing price forecast instead of using price series one period continuously compounded return series is used to achieve more attractive statistical properties the autoregressive moving average with exogenous variables armax model is used to catch the linear relationship between price return series and explanatory variable load series the generalized autoregressive conditional heteroscedastic garch model is used to unveil the heteroscedastic character of residuals and awnn is used to present the nonlinear nonstationary impact of load series on electricity prices the monte carlo method is adopted to generate more evenly distributed random numbers used for time series and awnn models to accelerate the convergence several criteria such as average mean absolute percentage error amape and the variance of forecast errors are used to assess the model and measure the forecasting accuracy illustrative price forecasting examples of the pjm market are presented to show the efficiency of the proposed method

location matters the impact of renewable power on transmission congestion and emissions abstract many governments offer subsidies for renewable power to reduce greenhouse gas emissions in the power sector however most support schemes for renewable power do not take into account that emissions depend on the location of renewable and conventional power plants within an electricity grid i simulate optimal power flow in a test grid when 4 renewable power plants connect to the grid across 24 potential sites amounting to over 10 000 configurations each configuration is associated with different levels of emissions and renewable power output i find that emission reductions vary by a factor of 7 and that curtailment due to transmission congestion is more likely when renewable power plants are concentrated in an area of the grid with low demand large cost savings could be obtained by allowing subsidies for renewable power to vary across locations according to abatement potential or by replacing subsidies with a price on emissions

integrated energy markets and varying degrees of liberalisation price links bundled sales and chp production exemplified by northern european experiences abstract liberalisation of energy markets has during the last 20 years been gradually introduced in many countries the liberalisation has led to concerns regarding the markets state of competition and fears that market power existence can result in less efficiency gains than what is expected from liberalisation concerns have also been raised as to whether specific consumer groups will be affected by limited competition in markets much of the concern has been concentrated on the electricity markets but the development of energy sectors with integration of activities within natural gas electricity and the oil sector creates the need to examine market power aspects across these markets this paper examines the concentration trends in the northern european markets for electricity and natural gas combined with regional district heating aspects especially with respect to the situation in denmark the situation with natural gas companies supplying to both small scale chp and to retail heat customers is discussed for instance which changes of regulatory regime for domestic heating customers should be considered when the natural gas market is being liberalised the interlinked nature of the energy markets is described and examples of impacts from one market with limited competition to other markets with seemingly well functioning competition are given the specific case of large chp production facilities with output on the regulated district heating market and the competitive nordic electricity market is examined how much of the fluctuations in price experienced in electricity markets should be reflected in the price of heating supplies to which degree do the heating customers have to bear the burden of low electricity market prices regulation of liberalised markets is discussed focusing on the interaction between one regulated market and the related energy markets that are liberalised existing regulation on the markets are compared to a situation where liberalisation of some markets puts pressure on other markets we conclude that the most likely integration activity in the danish market will be the bundling of energy goods natural gas and electricity to retail customers and the integration of gas fired chp producers with gas companies

an experimental study on the incentives of the probabilistic serial mechanism we report an experiment on the probabilistic serial ps mechanism for allocating indivisible goods the ps mechanism a recently discovered alternative to the widely used random serial dictatorship mechanism has attractive fairness and efficiency properties if people report their preferences truthfully however the mechanism is not strategy proof so participants may not truthfully report their preferences we investigate misreporting in a set of simple applications of the ps mechanism we confront subjects with situations in which the theory suggests that there is an incentive or no incentive to misreport we find little misreporting in situations where misreporting is a nash equilibrium however we also find a significant degree of misreporting in situations where there is actually no benefit to doing so these findings suggest that the ps mechanism may have problems in terms of truthful elicitation

negotiating bilateral contracts in electricity markets in mixed pool bilateral electricity markets participants can sign forward bilateral contracts several months in advance of its delivery in addition generators may sell to and loads may buy from the pool at the spot price through the day ahead or balancing markets forward bilateral contracts have the advantage of price predictability in comparison with the uncertain spot price however the risk is that such a contract commits the partners to a price that may be disadvantageous compared to the spot price here we propose a systematic negotiation scheme through which a generator and load can reach a mutually beneficial and risk tolerable forward bilateral contract either physical or financial under this approach the generator and load respond rationally to a stream of bilateral bids counter bids and offers counter offers considering their respective benefits while accounting for the risks incurred by the prediction uncertainty in the pool spot price and other market parameters over the length of the contract each negotiating party can choose its own definition of risk which can be influenced by regret value at risk or dispersion from the mean numerical tests show that this flexible negotiating approach can be readily put into practice

thermal power generation scheduling by simulated competition this paper presents a new method for solving the unit commitment problem by simulation of a competitive market where power is traded through a power exchange px procedures for bidding and market clearing are described the market clearing process handles the spinning reserve requirements and power balance simultaneously the method is used on a standard unit commitment problem with minimum up down times start up costs and spinning reserve requirement taken into account comparisons with solutions provided by lagrangian relaxation genetic algorithms and chao an li s unit decommitment procedure demonstrate the potential benefits of this new method the motivation for this work was to design a competitive electricity market suitable for thermal generation scheduling however performance in simulations of the proposed market has been so good that it is presented here as a solving technique for the unit commitment problem

the economic value of transmission lines and the implications for planning models abstract many connections between economic efficiency regulation the environment and energy markets are evident in the planning for transmission upgrades in an electricity network transmission owners have to make decisions about investing in new assets while facing uncertainty in the generation plans regulatory and environmental constraints and current system endowments in this paper we demonstrate an analytical method for determining the economic value of individual transmission lines in a meshed network by calculating the total welfare effects for the system while many regulators believe that traditional congestion rents provide the correct incentives for investing in transmission upgrades we show that the uncertainty in system conditions breaks down this paradigm the analysis uses an existing security constrained optimal power flow scopf model and a test network to demonstrate how the method can be used to determine the welfare effects of changing the capacity of selected transmission lines the results show that a substantial portion of the economic benefits for an individual line may come from maintaining system reliability when equipment failures occur furthermore these benefits can change dramatically when inherently intermittent sources of renewable generation are added to a network and the changes in benefits are not captured effectively by changes in the expected congestion rents

transaction analysis in deregulated power systems using game theory the electric power industry is in transition to a deregulated marketplace for power transactions in this environment all power transactions are made based on price rather than cost a regional power pool is noted as the most straightforward path to a deregulated electricity marketplace however many questions remain unanswered regarding the economics of power pool participation in a deregulated energy marketplace participants are interested in maximizing their own profits regardless of the system wide profits it is perceived that competition will reduce the price of electricity for retail customers however the key issue for participants is related with the price definition to remain competitive in this paper the authors use game theory to simulate the decision making process for defining offered prices in a deregulated environment the outcome of this study may be used by power pool coordinators to discourage unfair coalitions a modified ieee 30 bus power system is used as a deregulated power pool to illustrate the main features of the proposed method

computing all nash equilibria of multiplayer games in electricity markets by solving polynomial equations the analysis of the nash equilibrium ne in electricity markets with imperfect competition is subject to two major challenges the treatment of multiplayer games and the determination of the existence of multiple market equilibria to resolve these obstacles a solution method based on the payoff matrix approach and polynomial equations is proposed in this paper to calculate all the nash equilibria of multiplayer games in the electricity markets first the proposed method decomposes the game by means of a set of all pure strategies assigned with positive probabilities support for each possible support the ne condition can be characterized by a set of polynomial equations with inequality constraints next the homotopy continuation algorithm is employed to obtain all solutions of the polynomial system finally all nash equilibria can be found by verifying each solution of all polynomial systems two example systems one involving the cournot model and the other based on the supply function equilibrium sfe model are applied to test the proposed method respectively the results show that the proposed method has the ability to identify all ne under certain conditions indicating that the proposed algorithm is useful for providing insights into the theoretical analysis of electricity markets

a study of basic bidding strategy in clearing pricing auctions this paper models bidding behaviors of suppliers in electricity auction markets under clearing pricing rule and with some simplified bidding assumptions optimal bidding strategy of suppliers is derived by solving a set of differential equations that specify the necessary conditions for bidders to maximize their expected payoffs the derived result indicates that bidders have incentives to mark up their bids above their costs of production the amount of markup depends on the probability of winning below and on the margin that are computed from the cost distribution of all suppliers market demand and the number of suppliers participating in the auction

gender differences in observed and offered wages in canada 1980 according to the 1981 census of canada the female rate of pay is 30 percent less than the male rate the average female wage offer however is only around one half of that received by males other things being equal slightly more than one half of the difference in observed wages can be explained by diffe rences in wage related characteristics between males and females two fifths of the disparity between wage offers can be explained by the same set of factors analysis of the distribution of wage offers indicates greater wage inequality in the canadian labor market than suggested by study of observed wages

optimization based bidding strategies in the deregulated market with the deregulation of electric power systems market participants are facing an important task of bidding energy to an independent system operator iso this paper presents a model and a method for optimization based bidding and self scheduling where a utility bids part of its energy and self schedules the rest as in new england the model considers iso bid selections and uncertain bidding information of other market participants with appropriately simplified bidding and iso models closed form iso solutions are first obtained these solutions are then plugged into the utility s bidding and self scheduling model which is solved by using lagrangian relaxation testing results show that the method effectively solves the problem with reasonable amount of cpu time

the endogeneity of union status an empirical test an unsettled issue in the literature relating to the relative wage effect of unions is the appropriate treatment of union status in a wage determination model in the context of a three equation model determining union membership and union and nonunion sector wage rates this paper presents an instrumental variables iv procedure for estimating the parameters of the wage equations and a test of the exogeneity of union status using the hausman specification test an advantage of our iv procedure in comparison to the widely used inverse mill s ratio procedure is that our procedure is a distribution free estimator whereas the inverse mill s ratio estimator hinges in the assumption that the error term of the choice equation is normally distributed using data for a sample of middle aged white workers we estimate the parameters of the union and nonunion wage equations with both procedures on the key question of the endogeneity of union status the hausman test decisively rejects the null hypothesis of exo

risk assessment in energy trading this paper provides a state of the art summary of risk assessment in energy trading techniques from financial engineering are needed by electric energy companies to manage price risk these tools are needed by suppliers distributors and traders in a competitive electric power marketplace tools that have been adapted to the specific environment of the electric power system include portfolio analysis and hedging instruments this paper provides a comprehensive critical literature survey of what has been applied to date in the power markets and which areas continue to need additional research one example market scenario is used throughout the paper to demonstrate the usefulness of the risk assessment methods

auction design in day ahead electricity markets competition in day ahead electricity markets has been established through auctions where generators and loads bid prices and quantities different approaches have been discussed regarding the market auction design multi round auctions despite its implementation complexity allow market participants to adapt their successive bids to market prices considering their operational and economic constraints however most of the day ahead electricity market implementations use noniterative single round auctions this paper presents a market simulator to compare both auction models different auction alternatives such as the spanish single round auction that takes into account special conditions included in the generator bids and multi round auctions with different stopping rules are analyzed the results and acquired experience in the simulation of the spanish market started in january 1998 are presented hourly market prices average daily price price demand correlation and several economic efficiency indicators such as generator surplus consumer surplus and social welfare are compared to derive conclusions regarding the performance of the auction alternatives

the study of the impacts of potential coalitions on bidding strategies of gencos the paper studies the impacts of potential coalitions on bidding strategies of gencos in a pool based power market the generator under consideration can form any potential coalition with other generators subgroups are then formed and each of these subgroups consists of some members which coordinate their bidding strategies to achieve a common goal noncooperative gaming applies among all the subgroups while cooperative gaming applies among the members in each subgroup by implementation of bids sensitivities the paper presents an algorithm for the members in each coalition subgroup to obtain optimal bids which essentially is based on interior point optimal power flow ipopf model a priority list produced after optimal bids are found for all the potential combinations of coalition is used by the generator under consideration to bargain with members on the list the algorithm and model are tested by the ieee 30 bus system and numerical results are presented

a two tier matrix game approach for obtaining joint bidding strategies in ftr and energy markets transmission congestion results in revenue collected from the loads that often exceeds the payment made to the generators the financial transmission right ftr is an instrument that allows the independent system operator iso to redistribute the excess revenue congestion charge among the market participants generators and loads hold ftrs to hedge against congestion charges since the revenues from the ftr and energy markets are interdependent each generator and load must have a joint bidding strategy for ftr and energy markets to maximize its total payoff this paper presents a two tier matrix game model that allows the generators and loads to obtain joint bidding strategies the model also allows the isos and the market designers to assess the impact of various network configurations and rules on market performance e g market power the two tier model considers multiple participants multidimensional bid vectors network contingencies and varying demand we conducted a numerical validation of our model by analyzing the three node network studied by joskow and tirole 2000 additional numerical studies were conducted on a five node network to examine the impact of holding ftrs on the bidding strategies in the energy market and joint payoffs of the participants

purchase allocation and demand bidding in electric power markets the purchase allocation problem is one of the most important problems faced by an electric energy service provider under new market environments the optimal purchase allocation problem for dual electric power markets and demand bid generation are discussed in this paper the price volatility is explicitly considered in purchase allocation problems and the sequential nature is modeled by conditional stochastic characteristics an analytical solution for the optimal allocation is derived with given demand and statistical characteristics of the market prices the method for generating demand bids for purchaser based on market allocation and price forecasting is then developed the numerical simulations for market allocation and bid generation are demonstrated based on the actual data of the u s california power market

application of auctions as a pricing mechanism for the interchange of electric power the expected move to a market based electric power industry will significantly change electric utility operations these changes will fundamentally alter the pricing of electric power how this pricing will be accomplished is a key issue traditionally embedded cost based methods have been used spot pricing has received attention as a possible approach in a market based electric power environment another market based approach is the use of auctions this paper presents the application of a sequential sealed bid and sealed offer auction to the pricing of electric power by using linear programming

gaming the uniform price spot market quantitative analysis in this paper a range of indices have been derived to quantify the incentives to game the uniform price spot market the gain of a portfolio generator due to withdrawing capacity and or inflating the price bid has been found to be proportional to the in merit market share of the gaming generator and the inverse combined price elasticity of supply demand a gaming index has also been derived as a modification of the herfindahl hirschman index which takes into account the reduction in the number of competitors as the demand goes up and the benefit the portfolio generators take from gaming price elastic loads reduce gaming opportunities but do not remove them application of the indices has been illustrated using the the spot market in england and wales the results seem to confirm practical evidence from many countries that spot markets are vulnerable to gaming

forecasting next day electricity prices by time series models in the framework of competitive electricity markets power producers and consumers need accurate price forecasting tools price forecasts embody crucial information for producers and consumers when planning bidding strategies in order to maximize their benefits and utilities respectively this paper provides two highly accurate yet efficient price forecasting tools based on time series analysis dynamic regression and transfer function models these techniques are explained and checked against each other results and discussions from real world case studies based on the electricity markets of mainland spain and california are presented

energy price forecasting in the ontario competitive power system market this paper introduces a method for forecasting energy prices using artificial intelligence methods such as neural networks and fuzzy logic and a combination of the two the new approach is compared with some of the exiting methods various factors affecting the market clearing price are investigated results for the ontario electricity market are presented

congestion influence on bidding strategies in an electricity market much of the research on bidding strategies in an electricity market has focused on idealized situations where participants have limited market power and the transmission system is not constrained yet congestion may act to effectively give a bidder market power and consequently the ability to influence the market clearing price in such a noncompetitive situation the bidding strategies of market participants will change in this paper the electrical power market is modeled as an oligopoly market and the cournot quantity model is applied to the bidding strategy problem the bidding process with congestion management is modeled as a three level optimization problem a statistical methodology is then proposed as a solution for large systems

benefit optimization of centralized and decentralized power systems in a multi utility environment the objective is to examine the theoretical bases for benefit optimization in centralized and decentralized electric power systems in a centralized single control power system cost revenue and profit are used as system performance criteria for benefit optimization and the conditions are compared the results show that conventional cost minimization is not necessarily equivalent to benefit optimization based on other criteria in a decentralized multi utility power system benefit optimization and its allocation are investigated at the unconstrained economic optimum economic optimum with constraints and conditions under which the solution is an economic suboptimum the data from the epri regional systems are used to show practical examples of the benefit allocation with wheeling transactions although some rules are better for society than others there still is not one right answer to determine the rules for benefit optimization

old boy networks as screening mechanisms this paper studies a fulfilled expectations equilibrium in situations in which intermediaries provide personal opinions on the likelihood of success of personnel projects or investments each referee must recommend some candidates from a group of people about whom he has private information the employer uses the recommendations to choose the workers using his expectations about the quality of the recommended and the nonrecommended applicants although the referees use their information strategically the competition among them produces optimal use of the information in the sense that employers make the same choices in equilibrium as they would if they had the same information as the referees

price taker bidding strategy under price uncertainty this paper provides a framework to obtain the optimal bidding strategy of a price taker producer an appropriate forecasting tool is used to estimate the probability density functions of next day hourly market clearing prices this probabilistic information is used to formulate a self scheduling profit maximization problem that is solved taking advantage of its particular structure the solution of this problem allows deriving a simple yet informed bidding rule results from a realistic case study are discussed in detail

transmission analysis by nash game method this paper describes an open access transmission method for maximizing profits in a power system the proposed method is based on the nash bargaining game for power flow analysis in which each transaction and its optimal price are determined to optimize the interests of individual parties transmission losses are considered by the proposed method and test cases and results are discussed to present the merits of the proposed method

the payoff to work without pay volunteer work as an investment in human capital despite the widespread belief that volunteer work enhances an individual s employment prospects the hypothesis that volunteer work increases one s earnings has

a simulation model for a competitive generation market the simulation of a wholesale electricity market should go beyond a simple optimization based on the operating costs of the generating units a model of a competitive electricity market must consider the market structure the strategy of the market participants and any other factor that lead to prices different from costs this paper presents cosmee a model of a wholesale electricity market based on simple bids that estimates expected bid prices and quantities system hourly prices and generation schedules taking into account the bidding strategies of generators and the structure of the market the model reflects the profit maximizing behavior of the market agents subject to different types of constraints cosmee has been used to simulate a real wholesale market

solving three player games by the matrix approach with application to an electric power market in models of imperfect competition of deregulated electricity markets the key task is to find the nash equilibrium ne the approaches for finding the ne have had two major bottlenecks computation of mixed strategy equilibrium and treatment of multiplayer games this paper proposes a payoff matrix approach that resolves these bottlenecks the proposed method can efficiently find a mixed strategy equilibrium in a multiplayer game the formulation of the ne condition for a three player game is introduced and a basic computation scheme of solving nonlinear equalities and checking inequalities is proposed in order to relieve the inevitable burden of searching the subspace of payoffs several techniques are adopted in this paper two example application problems arising from electricity markets and involving a cournot and a bertrand model respectively are investigated for verifying the proposed method the proposed method outperforms a publicly available game theory software for the application problems

matching and efficiency in the baseball free agent system an experimental examination this article presents the results of an experimental study investigating the problem of allocating heterogeneous indivisible objects using market like mechanisms the object of study is the market for professional baseball players in their free agent year we investigate both the current free agency system and a variant of the current system instituted informally by the teams and ruled illegal by arbitrators we then propose and test a new alternative matching mechanism which proves to have quite a few desirable characteristics

application of actor critic learning algorithm for optimal bidding problem of a genco the optimal bidding for generation companies genco in the deregulated power market is an involved task the problem is formulated in the framework of the markov decision process mdp a discrete stochastic optimization method when the time span considered is 24 hours the temporal difference method becomes attractive for application the cumulative profit over the span is the objective function to be optimized the temporal difference technique and actor critic learning algorithm is employed an optimal strategy is devised to maximize the profit a market clearing system is included in the formulation simulation cases of three seven and ten participants are considered and the results obtained are discussed

recombinant estimation for normal form games with applications to auctions and bargaining abstract when analyzing economic games researchers frequently estimate quantities describing group outcomes such as the expected revenue in an auction for such applications we propose an improved statistical estimation technique called recombinant estimation the technique takes observations of players strategies and recombines them to compute all possible group outcomes that could have resulted from different player combinations in applications to an auction and a bargaining game the improved efficiency of our estimator is equivalent to increasing the sample size between 25 and 200 we discuss how to design experiments in order to utilize recombinant estimation we also discuss practical computational issues and provide software for computing estimates and standard errors

can volunteer work help explain the male female earnings gap using the 1987 survey of volunteer activity in canada we examine whether differential returns to volunteer work in the paid labour market can explain part of the male female earnings gap male volunteers earn on average about 11 higher incomes than their non volunteering counterparts as a result of their volunteer experience whereas comparable female volunteers and non volunteers earn similar incomes this differential return across the sexes may be partially explained by the type of volunteer activity undertaken our results indicate that as much as one third of the male female earnings gap may be attributable to the fact that the labour market rewards male and female volunteers differently

strategic bidding in an energy brokerage this focus of this paper is to present a framework in which strategies may developed for the individual participants in an energy brokerage such a framework is expected to be important with the increasing interest in electricity market structures such as the energy brokerage that deregulation has produced to illustrate the process of strategic bidding a simple suboptimal bidding strategy is presented with the aid of a numerical example the bidding strategy must be suboptimal because of the amount of unknown information about the other bidders further tuning of this strategy will be required before application to realistic scenarios

optimal response of a thermal unit to an electricity spot market this paper addresses the optimal response of a thermal unit to an electricity spot market the objective is to maximize the unit profit from selling both energy and spinning reserve in the spot market the paper proposes a 0 1 mixed integer linear programming approach that allows a rigorous modeling of i nonconvex and nondifferentiable operating costs ii exponential start up costs iii available spinning reserve taking into account ramp rate restrictions and iv minimum up and down time constraints this approach overcomes the modeling limitations of dynamic programming approaches and is computationally efficient results from realistic case studies are reported

matchmaker matchmaker the effect of old boy networks on job match quality earnings and tenure firms often view job applicant referrals from current employees as more informative than direct applications or referrals through formal labor market intermediaries such as placement firms we argue that old boy networks reduce employers uncertainty about worker productivity using jovanovic s job matching model we show that workers hired through the old boy network should 1 earn higher initial salaries 2 experience lower subsequent wage growth on the job and 3 stay on the job longer than otherwise comparable workers hired from outside the network we find considerable support for this theory using data from the 1972 survey of natural and social scientists and engineers