the indirect role of households in shaping us residential energy demand patterns abstract about a quarter of us energy demand is for domestic use yet an understanding of the processes determinants and consequences of household energy demand remains elusive conventional energy policy has overwhelmingly focused on improving energy efficiency of the buildings this research applies a non linear methodology and an interdisciplinary approach to household energy demand using data from the us residential sector 2009 residential energy consumption survey this research performs covariance structure analysis to isolate direct and indirect effects of household and housing characteristics on total annual domestic energy use outcomes uncover some of households indirect effects on energy demand which in this research mainly happen through household effects on building characteristics highlighting the indirect role of household choices in shaping residential energy demand patterns to maximize its efficiency in reducing energy demand and ghg emissions this paper suggests that in addition to investing in energy efficient technologies energy policy should incorporate indirect effects of household choices on the configuration of their future homes

contracts as a barrier to entry it is shown that an incumbent seller who faces a threat of entry into his or her market will sign long term contracts that prevent the entry of some lower cost producers even though they do not preclude entry completely moreover when a seller possesses superior information about the likelihood of entry it is shown that the length of the contract may act as a signal of the true probability of entry

how reliable are simple single equation specifications of import demand this paper examines nine models of aggregate import demand for each of five countries canada germany japan united kingdom and united states in an attempt to determine which of the frequently used single equation models of import demand are appropriate an appropriate model is defined as one which generates unbiased or at least consistent and efficient elasticity estimates while models without lagged adjustments and almon lag models perform rather poorly according to these criteria models including dynamic behavior through lagged values of the dependent variable are frequently accepted results are reported regarding functional form measures of variables and structural shift economists have devoted considerable attention to the estimation of aggregate import demand elasticities because of their importance in trade theory the simplest procedure for estimating these elasticities which is consistent with economic theory is to assume that the elasticity of supply of imports is infinitely elastic and to estimate

a model of residential demand for electricity using a national household sample abstract using a three equation model demand price appliance stock index and a current national household data set this study develops partial and total elasticity estimates for the usa partial elasticities are 0 102 for income and 0 193 for price while total elasticities are 0 410 for income and 1 403 for price

investment in competitive electricity scope for incentive contracts abstract there is considerable interest in investment in electric power but few projects have actually taken off the situation with investor owned plant is that recovery of the total costs of a new power station via tariffs in the usual way is not automatic the difficulty most often is that the investor and the host system or government need to negotiate on issues such as long term energy pricing the rate of return risk sharing and long term guarantees this paper argues that incentive contracts incorporating risk sharing parameters whose values are set to account for perceptions of risk magnitude and the degree of willingness to take risk are a promising approach to the problem the scope of incentive power contracts the spatial relationship between return and parameters and the methods of deciding parameter values are discussed

the principal agent relationship with an informed principal ii common values in many circumstances a principal may have relevant private information when she proposes a contract to an agent we analyze such a principal agent relationship as a noncooperative game the principal proposes a contract which is accepted or rejected by the agent who for most of our analysis has no private information the contract is executed if accepted otherwise the reservation allocation takes effect this allocation may be determined by a pre existing contract which the principal by her proposal is attempting to renegotiate or it may simply be the no trade point in this paper we assume that the principal s information directly affects the agent s payoff before solving the game we discuss pareto efficiency with asymmetric information we define an incentive compatible allocation to be weakly interim efficient wie if there exists no alternative incentive compatible allocation that both parties prefer for all possible beliefs that the agent might have about the principal s private information type we show that any wie allocation is interim efficient ie for some beliefs the rothschild stiglitz wilson rsw allocation relative to the reservation allocation l is the allocation that maximizes the payoff of each type of principal within the class of incentive compatible allocations that guarantee the agent at least the utility he gets from a irrespective of his beliefs about the principal s type the equilibrium set of the contract proposal game consists of the allocations that weakly pareto dominate the rsw allocation thus there is a unique equilibrium outcome if and only if the latter is ie and the equilibrium outcome is the rsw allocation itself after characterizing the equilibrium allocations we study those that are renegotiation proof when either the principal or the agent leads the renegotiation we then compare our contract proposal game which is a signaling model with its screening counterpart we conclude by extending our results to the case in which the agent as well as the principal has private information under the assumption of quasi linear preferences

the reliability of aggregate energy demand functions an application of statistical specification error tests abstract the paper examines the unbiasedness and efficiency of various energy elasticity estimates by means of statistical specification error tests the model selection procedure is applied to energy consumption data of eight industrialized countries it is found that models which describe dynamic behaviour by including the lagged dependent variable among the regressors are most frequently accepted and that long term income effects are important for all countries strong differences among countries prevail concerning the appropriateness of including a time trend elasticities derived from accepted models differ considerably among countries

nonlinear pricing and exclusion ii must stock products dominant firms often are unavoidable trading partners buyers may consider switching a fraction of their requirements to rival products but that fraction is highly uncertain in rapidly evolving industries nonlinear pricing serves to adjust the competitive pressure placed on rival firms depending on the joint distribution of the buyer willingness to pay for the rival s good and the share of contestable demand concave price quantity schedules erect barriers to entry convex parts in schedules introduce barriers to expansion dominant firms use all units discounts to create high entry barriers for rival firms with intermediate levels of contestable demand

residential consumption of gas and electricity in the u s the role of prices and income abstract we study the residential demand for electricity and gas working with nationwide household level data that cover recent years namely 1997 2007 our dataset is a mixed panel multi year cross sections of dwellings households in the 50 largest metropolitan areas in the united states as of 2008 we estimate static and dynamic models of electricity and gas demand we find strong household response to energy prices both in the short and long term from the static models we get estimates of the own price elasticity of electricity demand in the 0 860 to 0 667 range while the own price elasticity of gas demand is 0 693 to 0 566 these results are robust to a variety of checks contrary to earlier literature metcalf and hassett 1999 reiss and white 2005 we find no evidence of significantly different elasticities across households with electric and gas heat the price elasticity of electricity demand declines with income but the magnitude of this effect is small these results are in sharp contrast to much of the literature on residential energy consumption in the united states and with the figures used in current government agency practice our results suggest that there might be greater potential for policies which affect energy price than may have been previously appreciated

the value of embedded real options evidence from consumer automobile lease contracts under the common assumption of constant interest rates we show that penalties for early termination of a lease are often structured in such a way that the cancellation option embedded in consumer automotive leases has little value furthermore our estimates drawn from a sample of three popular car models over 1990 to 2000 indicate that the stand alone value of the lease end purchase option is on average about 16 of the market value of underlying used vehicles or about 1 462 per contract finally we examine the sensitivity of our option value estimates to model parameters and default risk recent years have witnessed a dramatic growth in the leasing of automobiles for instance overall industry sales data indicate that about a third of the new vehicles and trucks sold in the united states are leased hendel and lizzeri 2002 and miller 1995 and the federal reserve board survey of family finances reports that the use of leased vehicles by individuals nonbusiness consumers has risen from 2 9 to 5 8 over the 1992 to 2001 period azicorbe kennickell and moore 2003 consumer automobile lease contracts for new cars often include two embedded options that are not associated with a typical debt contract the first is a cancellation option that allows the lessee to terminate the lease early the second is a european call option which gives the lessee the right but not the obligation to purchase the leased used vehicle at the scheduled termination of the lease at a predetermined exercise price both of these options are simple examples of real options because the asset underlying these options is a used car that is a real asset however these options constitute a special case of real options since they are embedded in the lease contract which is a financial credit instrument theoretical analyses of lease contracts show that the cancellation option is quite valuable schallheim and mcconnell 1985 with respect to the purchase option hendel and lizzeri 2002 argue that they can play an important role in

markets for electricity in europe competition in the electricity industry requires properly functioning wholesale markets this paper discusses the better established electricity markets of europe in the nordic countries england and wales and spain the different market designs can all produce efficient outcomes if not hindered by market power long term contracts provide some defence against market power and give price stability to promote investment competition in electricity retailing may discourage retailers from signing long term contracts in future

marine trade offs comparing the benefits of off shore wind farms and marine protected areas the drive to increase renewable electricity production in many parts of europe has led to an increasing concentration of new wind energy sites at sea this results in a range of environmental impacts which should be taken into account in a benefit cost analysis of such proposals in this paper we use choice modeling to investigate the relative gains and losses from siting new windfarms off the coast of estonia relative to the option of creating a new marine protected area we find that while respondents are generally opposed to converting marine shoals to conventional wind farms and prefer the establishment of marine protected areas instead benefits from constructing environmentally friendly wind farms an alternative program which is also considered by the government are not statistically different with respect to consumers welfare to those associated with creating a new marine protected area methodologically the paper makes a contribution by showing the ability of the latent class mixed logit model to represent both within and between class preference heterogeneity and thus its power to provide a more sophisticated representation of preference heterogeneity than stand alone latent class or mixed logit approaches the paper also presents the first use of the latent class mixed logit model in willingness to pay space for environmental goods

variable elasticity models for electricity demand abstract it is demonstrated analytically that the demand models as specified by betancourt do not yield unitless measures of elasticity a simple transformation is suggested and the results are compared with other variable price elasticity demand models

an equilibrium selection theory of monopolization we develop a duopoly model in which firms compete for the market e g investing in process innovation or product development as well as in the market e g setting quantities or prices competition for the market generates multiple equilibria that differ in the firms investment levels relative size and profitability we show that monopolization that affects competition in the market can act as an equilibrium selection device in competition for the market in particular it eliminates equilibria that are undesirable for the monopolizing firm while not generating new equilibria this result complicates the task of determining whether a firm s dominance in a given market is the result of fair competition or unlawful monopolization we discuss a number of implications for antitrust policy and litigation and illustrate these by means of two well known antitrust cases

vertical foreclosure with the choice of input specifications we develop an equilibrium model of vertical foreclosure with the choice of input specifications vertical foreclosure occurs as the upstream division of the integrated firm makes a specialized input for its sister downstream division while it would as an independent firm provide a generalized input the changes in incentives with vertical integration can be explained by the externalities the choice of a specialized input entails vertical integration allows the upstream firm to internalize the benefit of raising the rival firm s costs at the downstream level we derive conditions for equilibrium vertical foreclosure to occur and discuss its welfare consequences

lifeline electricity rates as an income transfer device the lifeline electricity rates are presumed to be inefficient because they violate optimal pricing principles but they may also be an ineffective and inequitable way to transfer assistance to low income households evidence is presented to challenge the assumption that simple demand changes will permit high consuming households to subsidize low income users social security food stamps and other social programs are better alternatives to a general income transfer 7 references 2 tables dck

exclusionary vertical contracts and product market competition this article considers whether a monopolist is able to deter more efficient entrants through contracting with buyers in the antitrust literature the chicago school s stand is that such contracts cannot be anticompetitive hence vertical contracts should be accorded per se legal status in a four stage game with the following features 1 the incumbent enjoys a first mover advantage 2 the entrant must incur some sunk cost to enter the market and 3 entry is uncertain the author shows that vertical contracts can be anticompetitive if there exists product market competition thus the author advocates caution in treating all contracts as per se legal a three factor repeated measures experiment tested the effect of leadership style charismatic structuring and considerate on performance improvement on a manufacturing task over four trials findings from a repeated measures multivariate analysis of variance indicated that individual exposed to considerate leadership had superior initial performance but that this difference faded over time further analysis indicated that self efficacy fully mediated the relationship between leadership style and performance copyright 1999 by university of chicago press

exclusive dealing investment promotion may facilitate inefficient foreclosure this paper studies a model whereby exclusive dealing ed can both promote investment and foreclose a more efficient supplier since ed promotes the incumbent seller s investment the seller and the buyer realize a greater surplus from bilateral trade under exclusivity hence the parties involved may sign an ed contract that excludes a more efficient entrant in circumstances where ed would not arise absent investment the paper therefore invites a more cautious attitude towards accepting possible investment promotion arguments as a defense for ed

determinants of residential space heating expenditures in germany abstract we first examine the determinants of household expenditures on space heating and hot water supply in germany a number of socio economic characteristics of households are included along with building characteristics our analysis covers information on more than 12 000 households in germany for the years 1998 and 2003 the analysis continues by investigating whether different kinds of households are affected differently by increases in energy prices households in owner occupied properties are less affected compared to those in rented accommodation this could be because owners are more likely to have installed energy efficient heating and hot water supply systems and landlords have less of an incentive to improve the conditions of their rented accommodations an energy policy targeting especially the latter group might benefit not only households in rented accommodation but might also increase energy efficiency and reduce greenhouse gas emissions as well

presidential address antitrust restrictions on single firm strategies this article offers an overview of selected developments in the law and economics of antitrust regulation of single firm strategies the strategy generating the most cases historically is resale price maintenance here the law has moved sharply in both canada and the u s towards more solid economic foundations yet a gap between the law and economics remains the economics of resale price maintenance is reviewed within a framework that is much simpler and more general than the existing literature the law on a second strategy predatory pricing represents in my view a success story for the influence of economic theory in spite of the absence of a single accepted theory of predatory pricing the remaining single firm strategies are concerned largely with the exclusion by a dominant firm of rivals from a market i review with application to cases the two most basic questions concerning exclusionary strategies are exclusionary anticompetitive contracts ever entered into voluntarily by market participants on the other hand is complete or substantial foreclosure of a market through exclusionary strategies necessarily anticompetitive cette allocution presidentielle a l association canadienne d economique presente une vue d ensemble des developpements dans le droit et l economie de la reglementation antitrust sur les strategies d une firme unique la loi sur la strategie qui genere historiquement le plus de cas le maintien du prix de revente a change dramatiquement au canada et aux etats unis et derive vers une politique qui a des assises economiques solides mais il reste un ecart entre le droit et l economie on reexamine l economie du maintien du prix de revente a l aide d un cadre d analyse qui est a la fois plus simple et plus general que ce qui existe dans la litterature specialisee la loi pour ce qui est d une seconde strategie prix d eviction est a mon avis une grande reussite pour la science economique malgre l absence d une seule theorie du prix d eviction generalement acceptee un troisieme ensemble de strategies concerne l exclusion de ses rivaux d un marche par la firme dominante l auteur reexamine avec un recours extensif aux cas les deux questions de base pour ce qui est des strategies d exclusion est ce que les participants sur un marche entrent jamais volontairement dans un arrangement contractuel qui exclut et est anticoncurrentiel d autre part est ce que la saisie complete ou substantielle d un marche par des man uvres d exclusion est necessairement anticoncurrentielle

rebates as incentives to exclusivity we show how rebates or fidelity discounts that take the form of lump sum payments made to retailers can be used by an incumbent manufacturer to achieve exclusivity and to deter the entry of a more efficient rival the results which hold whatever the degree of differentiation between retailers and whatever the cost advantage of the entrant are found despite minimizing asymmetries that may favour the incumbent as such there is no need to introduce buyers disorganization discriminatory offers economies of scale non coincident markets or liquidated damages to find that exclusivity can lead to anti competitive effects

estimating urban residential demand for water under alternative price measures urban water supplies are becoming scarce therefore it is not surprising that the prospect of scarcity has led to renewed interest in policies designed to use the available supply more efficiently this policy interest has promoted the reexamination of earlier empirical studies on efficient pricing schemes for urban water hanke 5 hanke and davis 6 water authorities have paid little attention to the marginal cost of providing water or to the prospect for a scarcity rent akin to a hotelling 7 rent where water supplies are exhaustible even ignoring scarcity rent pricing policies have not been consistent with conventional efficiency objectives indeed pricing decisions are sometimes based on nonmarket considerations hanke and davis 6 among economists the price equal marginal cost debate has centered on the question of seasonal pricing schemes there has also been some interest in zonal i e distance based pricing policies for water in any case the deviation between price and marginal costs depends on the sensitivity of demand to changes in water prices the primary attribute of demand in these calculations is the price elasticity of demand thus any response to the policy concerns identified at the outset requires estimates of the responsiveness of water demanded to price in practice customers pay for water under a multistep block pricing scheme many of the problems noted in the literature with estimating demand for a commodity in the presence of block pricing schemes have not been resolved by current econometric analyses in fact taylor 14 nordin 12 billings and agthe l have demonstrated that while demand models developed to explain consumer behavior under both declining and increasing block rate pricing schemes are theoretically correct practical problems associated with the empirical implementation of the demand model persist one of the most important problems is the implication that the demand

valuation of environmental and societal trade offs of renewable energy sources abstract use of renewable energy sources is one solution to decrease green house gas emissions and the use of polluting fossil fuels renewables differ in their environmental and societal impacts and to design sound renewable energy policy societies need to assess the trade offs between alternative sources to enable the evaluation and comparison of renewable energy production alternatives in finland this paper applies the choice experiment to elicit the monetary information on people s preferences for four renewable energy sources wind power hydro power and energy from crops and wood and considers four impacts of energy production effects on biodiversity local jobs carbon emissions and household s electricity bill the nested logit analysis reveals that higher income male gender young age and pro environmental attitude increase the probability to choose renewable energy instead of the current energy mix wind power is on average the most popular renewable energy technology but regional differences exist biodiversity deterioration should be avoided the national aggregate willingness to pay based on stated preferences rather than preferences revealed by actual market behavior for a combination of renewable energy technologies that corresponds to finland s climate change and energy policy is over 500 million euros

revealing additional dimensions of preference heterogeneity in a latent class mixed multinomial logit model latent class models offer an alternative perspective to the popular mixed logit form replacing the continuous distribution with a discrete distribution in which preference heterogeneity is captured by membership of distinct classes of utility description within each class preference homogeneity is usually assumed although interactions with observed contextual effects are permissible a natural extension of the fixed parameter latent class model is a random parameter latent class model which allows for another layer of preference heterogeneity within each class this article sets out the random parameter latent class model and illustrates its applications using a stated choice data set on alternative freight distribution attribute packages pivoted around a recent trip in australia

a national micro data based model of residential electricity demand new evidence on seasonal variation building on earlier estimates of electricity demand the author estimates elasticities by month to determine differences between heating and cooling seasons he develops a three equation model of residential electricity demand that includes all the main components of economic theory the model generates seasonal elasticity estimates that generally support economic theory based on the model using a national current household data set monthly division the evidence indicates there is a seasonal pattern for price elasticity of demand while less pronounced there also appears to be seasonal patterns for cross price elasticity of alternative fuels for the elasticity of appliance stock index and for an intensity of use variable

preference heterogeneity for renewable energy technology abstract this study explores heterogeneity in individual willingness to pay wtp for a public good using several different variants of the multinomial logit mnl model for stated choice data these include a simple mnl model with interaction terms between respondent characteristics and attribute levels a latent class model a random parameter mixed logit model and a hybrid random parameter latent class model the public good valued was an increase in renewable electricity generation the models consistently show that preferences over renewable technologies are heterogeneous among respondents but that the degree of heterogeneity differs for different renewable technologies specifically preferences over solar power appear to be more heterogeneous across respondents than preferences for other renewable technologies comparing across models the random parameter logit model and the hybrid random parameter latent class model fit the choice data best and did the best job capturing preference heterogeneity

personality and economic choices abstract there is substantial variation in individual preferences for public goods yet much of that variation remains poorly understood however simple measures of personality can help to explain economic values and choices in a systematic way in this paper we examine the effects of personality on individual economic choices over public environmental goods based on three datasets from three separate stated preference studies we use a hybrid choice econometric framework to examine the effects of personality on preferences for the status quo changes in environmental quality and costs of investing in environmental improvements we find effects that are consistent across all datasets personality a stable feature of an individual s character that is simple to measure enriches explanations of why the demand for environmental goods varies across people provides an indication of how different people are likely to react to the introduction of environmental policies and explains substantial differences in willingness to pay

analysing households responsiveness towards socio economic determinants of residential electricity consumption in singapore abstract the research of household electricity use is still relatively new for singapore where apart from some government surveys and sparingly available papers not much has been done to understand the underlying socio economic determinants that affect residents energy demand here we seek to quantify price and income elasticities as well as provide reasonable justification for price asymmetry in singapore using a panel approach across dwelling types and geographical areas we find that households do not react much to prices and that price elasticities may decrease as income rises there is also some evidence of price asymmetry with surprising results putting responsiveness towards price decreases larger than price increases this points towards similar behavioural patterns with the rebound effect for household energy efficiency if found present in future studies our findings suggest that there will only be positive responses towards dynamic pricing and higher churn rates if more transparent information is provided on related cost savings when households are exposed to retail choice in the electricity market after full retail competition is introduced in 2018 in addition a large role will have to come from cultivating the young to engage in sustainable practices to achieve energy efficiency targets

exclusive quality exclusive quality in the case of vertically differentiated products bertrand competition at the retail level does not prevent an incumbent upstream firm from using exclusivity contracts to deter the entry of a high quality rival indeed because of differentiation the incumbent s inferior product is not eliminated upon entry due to the resulting competitive pressure a retailer who considers rejecting the exclusivity contract expects to earn much less than the incumbent s monopoly rents thus in equilibrium the incumbent can always offer high enough an upfront payment to induce all retailers to sign the contract and achieve exclusion this is true under linear pricing for intermediate levels of entry costs and with two part tariffs even in the absence of entry costs copyright 2010 the author the journal of industrial economics 2010 blackwell publishing ltd and the editorial board of the journal of industrial economics

incentives to invest in liberalised electricity industries in the north and south differences in the need for suitable institutional arrangements the issue of investment is all too often underplayed in deregulation reforms focused on market rules and de integration measures this presentation criticises first the optimistic approach of the theory of investment incentives through market signals when it is applied to deregulated electricity industries the greater part of the investment in base load and peak equipment should be made profitable by income from very high prices during peak and extreme peak periods that raises a problem of political acceptability the problem is then addressed in the context of the mature electricity industries in the north given the maturity of markets there a number of modifications to the pure market model could be envisaged to strengthen incentives to invest but none of them is perfect the main way is to focus on adaptation of market rules on the supply of power at peaks and extreme peaks by considering capacity adequacy as a public good with three solutions capacity payment reserve obligations centralised procurement by auctioning for peak capacity observation of reforms suggests also the validity of some other solutions based on a limitation of the competition by allowing long term contracts and vertical integration between production and supply finally the question is extended to the specific problem of developing countries characterised by irregular growth it is argued that reforms must be designed in view of the importance of the need for investment through long term coordination and reduction of investment risks indeed experiences of latin american liberalised industries show that they have to include a number of competition based imperfections and to allow ongoing exercise of market power in order to allow prices to rise above competition prices the single buyer model or some variants of it appear to be good alternatives if one wishes to avoid the twists and turns of the competition paradigm the difficulty with this model arises from the institutional conditions necessary to make it efficient and not overcostly c 2005 elsevier ltd all rights reserved

electricity demand in multi family renter occupied residences this paper focuses on multi family renter occupied housing where the landlord provides major appliances a large residential sector that has not received widespread attention in the literature experimental data are used from a test where one group of households was billed directly for the electricity they consumed while a control group had unlimited electric service included as part of the monthly rent the empirical analysis yields short run demand estimates that satisfy to a remarkable extent the ceteris paribus assumptions of demand analysis this is the case for two reasons 1 the households did not individually execute the appliance choice decision at various unknown times in the past and 2 the stock of appliances upon which the derived short run demand is conditional is identical for all households in the sample a second important feature is emphasis on functional form examined in some detail is the question of the appropriate functional form for residential electricity demand finally empirical results of the analysis are used to investigate the cost effectiveness and welfare effects of installing submeters in existing multi family residences

naked exclusion an experimental study of contracts with externalities this paper reports the results of an experiment designed to assess the ability of an incumbent seller to profitably foreclose a market with exclusive contracts we use the strategic environment described by rasmusen ramseyer and wiley 1991 and segal and whinston 2000 where entry is unprofitable when sufficiently many downstream buyers sign exclusive contracts with the incumbent when discrimination is impossible the game resembles a stag hunt coordination game in which the buyers payoffs are endogenously chosen by the incumbent seller exclusion occurs when the buyers fail to coordinate on their preferred equilibrium two way non binding pre play communication among the buyers lowers the power of exclusive contracts and induces more generous contract terms from the seller when discrimination and communication are possible the exclusion rate rises divide and conquer strategies are observed more frequently when buyers can communicate with each other exclusion rates are significantly higher when the buyers payoffs are endogenously chosen rather than exogenously given finally secret offers are shown to decrease the incumbent s power to profitably exclude

reforms in the french power system from weak contestability to effective competition abstract one way to introduce competition in the power industries is to preserve the integration of the incumbent companies and to organise the access of potential competitors to the network on a fair basis but the combination of hierarchy and bilateral contracts between entrants ipp candidates foreign producers intermediaries suppliers and consumers appears to be unstable because of permanent tensions between the incumbent s dominant position and fair competition moreover in an institutional environment enlarged by the supranational powers of the european union heterogeneity of rules and structures between quasi integrated power industries and decentralised competitive ones are sources of permanent questioning the paper analyses the stability of the recent reform of the french power industry the extreme integration of which being deeply rooted in the french institutional peculiarities has been weakly affected by the directive 96 92 transcription two institutional scenarios are defined which give a different weight to two competition paradigms in conflicts one pertains to the industrial policy which inclines to preserve hierarchy in the national area to gain national champion s competitive advantages in the european as in the global field and the other to the neo classical paradigm of effective competition in the first scenario the integration of the industrial organisation is preserved but with transparent grid access rules supposed to create an actual market contestability and the playing field is the continental europe on which national champions compete in the second one the french industrial organisation has to conform to the competitive model with vertical and horizontal disintegration and creation of a power exchange market for promoting competition but this scenario is heavily strained by the institutional determinism of the nuclear legacy the future reality should be set between these two scenarios

residential demand for electricity abstract short and long run responses by households to changes in the price of electricity are estimated using data which permit measurement of the marginal price of electricity the infra marginal demand charge and estimates of household appliance stocks the price elasticities of high and low level users of electricity are compared the theoretical bias in price elasticity estimates resulting from neglect of the infra marginal demand charge is shown to be empirically insignificant

exclusive contracts and market dominance we propose a new theory of exclusive dealing the theory is based on the assumption that a dominant firm has a competitive advantage over its rivals and that the buyers willingness to pay for the product is private information in this setting the dominant firm can impose contractual restrictions on buyers without necessarily compensating them implying that exclusive dealing contracts can be both profitable and anticompetitive we discuss the general implications of the theory for competition policy and illustrate by examples its applicability to antitrust cases jel d21 d43 d82 d86 k21 l13 l40

the transaction costs driving captive power generation evidence from india the 2003 indian electricity act incentivizes captive power production through open access in an attempt to harness all sources of generation yet we observe that only some firms self generate while others do not in this paper we give a transaction cost explanation for such divergent behavior using a primary survey of 107 firms from india we construct a distinct variable to measure the transaction specificity of electricity use the make or buy decision is then econometrically tested using probit model results are highly responsive to transaction specificity and the likelihood of captive power generation is positively related to it at the industrial level this explains why food and chemical firms are more likely to make their own electricity since the burden of poor grid supply is highest on smaller sized and high transaction specific firms the grid access policies need to account for firm level characteristics if government wants to incentivize captive power generation

do gasoline demand elasticities vary this paper answers questions concerning gasoline demand elasticity by analyzing periods that span both increasing and decreasing prices focusing on consumer decisions about the distance driven and the automobile size us data show that efficiency changes and reduced mileages account equally for short run elasticities while automobile efficiency accounts for 90 in the long run the analysis shows a consistency that makes it useful in projecting elasticities during market disruptions and over a broad span of economic conditions in other countries 38 references dck

the role of potential competition in industrial organization potential competition has been recognized as a mechanism to control the exploitation of market power at least since the work of j b clark 1902 but it was not until 50 years later that economists most notably joe bain and paolo sylos labini refocused attention on the idea with inputs from the theories of imperfect competition optimal control and dynamic games their work evolved into ever more sophisticated models of the reactions of existing competitors to the threat of new competition although the most appropriate models of competitive interaction are those which begin with a specific industry a number of theories have been proposed which attempt to develop more general conclusions my purpose in this paper is to develop an understanding of the strengths and limitations of these alternative theories by examining the available theoretical empirical and institutional knowledge rather than attempt the sisyphean task of recounting every model which relates conditions of entry and market performance i have partitioned the analysis into four major schools of thought according to their most central propositions these are the traditional model of limit pricing dynamic limit pricing the theory of contestable markets and the market efficiency model traditional limit pricing models rest on the assumption that firms respond to entry but are able to earn persistent profits when the structural characteristics of markets make entry difficult dynamic limit pricing is similar but emphasizes that markets can only be temporarily protected from entry contestability theory in its pure form asserts that potential competition is as effective as actual competition in controlling market performance the efficient markets hypothesis broadly interpreted states that markets are workably competitive and that the market structure reflects differential efficiency not strategic behavior while one can construct many other hypotheses about potential competition these classifications

exclusive dealing as a barrier to entry evidence from automobiles exclusive dealing contracts between manufacturers and retailers force new entrants to set up their own costly dealer networks to enter the market we ask whether such contracts may act as an entry barrier and provide an empirical analysis of the european car market we first estimate a demand model with product and spatial differentiation and quantify consumers valuations for dealer proximity and dealer exclusivity we then perform policy counterfactuals to assess the profit incentives and possible entry deterring effects of exclusive dealing we find that there are no unilateral incentives to maintain exclusive dealing but there is a collective incentive for the industry as a whole furthermore a ban on exclusive dealing would raise the smaller entrants market share but more importantly consumers would gain not so much because of increased price competition but rather because of the increased spatial availability which compensates for the demand inefficiency from a loss of dealer exclusivity

the commitment value of contracts under dynamic renegotiation we examine why different renegotiation processes can lead to opposite results regarding the commitment value of third party contracts in the presence of asymmetric information our main result is that a contract loses all strategic value if renegotiation is allowed during the production stage rather than only before production begins this result casts serious doubt on the relevance of previous findings which emphasize how contracts can have commitment value even in the presence of renegotiation our analysis can also be used to understand the differences between many of the results in the renegotiation literature

demand for space heating in apartment blocks measuring effects of policy measures aiming at reducing energy consumption abstract panel data covering the period 1984 1995 on energy consumption and technical characteristics of apartment blocks from denmark are analysed in order to measure effects of policy measures aimed at reducing the consumption of energy for space heating results indicate that building regulations have been important in reducing energy consumption in new buildings furthermore conditional price responses are estimated to be relatively small or non existent indicating small short run effects of fuel taxes on energy consumption in apartment blocks finally a consultancy scheme implemented with the purpose of improving knowledge about the potential for energy savings is found to have had moderate effects

on the variable elasticity of the demand for gasoline the case of the usa this paper tests the variable elasticity of the demand for gasoline by applying the well known box cox extended autoregressive bcea model of savin and white this model can simultaneously test for functional form and autocorrelation in a time series regression major findings are the log linear form chosen a priori in most of previous studies can be rejected in favour of the bcea model long run price elasticities varied from 1 118 in 1973 to 0 290 in 1981 and long run income elasticities declined consistently from 0 944 in 1960 to 0 452 in 1985 these findings have policy implications for more accurate forecast of gasoline demand gasoline taxes energy conservation and others

extracting interaction created surplus abstract this paper demonstrates that the economic surplus which agents produce in bilateral interactions is extractable by an outside party having sufficient initial resources the third party achieves this outcome using a class of exclusive interaction contracts a basic extractability result is shown to be robust to several extensions competition among outside parties multiplicity of interacting agents and a dynamic extension with repeated opportunities to interact finally some connections with the economic intermediation literature are drawn journal of economic literature classification number c79

residential energy demand additional empirical evidence by minority household type abstract in a number of recent studies household level data for specific urban areas or national household level micro data have been used to estimate price and income elasticities of energy demand none of this literature however provides us with elasticity estimates by minority majority household type the main focus of this paper is to measure the responsiveness of the quantity of electricity and total energy demanded for black hispanis and majority households to price and income price and income elasticities are compared among these groups over the short and long term a variable elasticity demand model is estimated the elasticities are allowed to vary with respect to non price and income variables the price elasticities of demand vary with heating and cooling degree days and the income elasticities with the number of household members mean estimates were calculated over the respective samples findings indicate that demand for electricity is relatively price inelastic irrespective of household group however blacks are more sensitive to variations in the short run to price than hispanic and majority households in the long run blacks are also more sensitive to price changes but the magnitude of the response to price changes in the long run relative to the short run is larger for hispanics and majority households respectively than for blacks

inventorship and authorship as attribution rights an enquiry into the economics of scientific credit abstract authorship and inventorship are attribution rights upon which individual scientists build their reputation and career social and legal norms concerning their distribution within research teams are currently criticized for failing to inform third parties on individual contributions we examine the case of teams engaged in the double disclosure of their research results through both publications and patents and model the negotiation process taking place between junior or female team members and the senior male ones we suggest that the former may give up inventorship in order to secure authorship even when entitled to the both based on a sample of 680 patent publication pairs related sets of patents and publications we show that very frequently one or more authors of a publication do not appear as inventors of a related patent this is less likely to happen for first and last authors which is in accordance both with our model and the prevailing legal norms on inventorship however the probability of exclusion from inventorship also declines with seniority and increases for women which is compatible with our model only

an econometric analysis of peak electricity demand in the short run abstract different functional forms for the analysis of electricity demand are developed and compared to the popular double log demand model these functional forms are characterized by an increased sensitivity of electricity demand to price changes as prices increase and decreased sensitivity as the weather becomes more extreme these two features capture popular notions in industry about electricity demand behaviour on the basis of 12 different samples corresponding to 12 different utilities of monthly data over the 1972 76 period these functional forms are found to provide useful alternatives to the double log demand model nevertheless the most important characteristic of the empirical results is their variability across utilities the analysis is equally applicable to average and peak demand but the discussion stresses peak demand

the eu 20 20 2020 targets an overview of the emf22 assessment three computable general equilibrium models are used to estimate the economic implications of a stylized version of eu climate policy if implemented at the lowest possible cost the 20 emissions reduction would lead to a welfare loss of 0 5 2 0 by 2020 second best policies increase costs a policy with two carbon prices one for the ets one for the non ets could increase costs by up to 50 a policy with 28 carbon prices one for the ets one each for each member state could increase costs by another 40 the renewables standard could raise the costs of emissions reduction by 90 overall the inefficiencies in policy lead to a cost that is 100 125 too high the models differ greatly in the detail of their results the ets non ets split may have a negligible impact on welfare while the renewables standard may even improve welfare the models agree however that the distortions introduced by total eu package imply a substantial welfare loss over and above the costs needed to meet the climate target the marginal total and excess costs reported here are notably higher than those in the impact assessment of the european commission

landscape externalities from onshore wind power the expansion of renewable energy is a central element of the german federal government s climate and energy policy the target for 2020 is to produce 30 of the electricity from renewable energies wind power has been selected to be a major contributor to this change replacing old wind turbines by modern ones and building new turbines on land will be crucial in meeting this target however the expansion of onshore wind power is not universally accepted in several regions of germany residents are protesting against setting up new wind turbines to determine the negative effects two choice experiments were applied in westsachsen and nordhessen germany in both regions the externalities of wind power generation until 2020 based on today s state of technology were measured the results show that negative landscape externalities would result from expanding wind power generation using latent class models three different groups of respondents experiencing different degrees of externalities were identified

concentration in the european electricity industry the internal market as solution abstract this article offers an analysis of the present competitive and regulatory framework of the european electricity sector and the results achieved with the liberalisation process considering the reactions of incumbents to the liberalisation the focus in this work is mainly on the problem of market concentration in the sector the new trends toward the creation of national champions as well as recent mergers between gas suppliers and electricity producers raise serious concerns about abuses of market power and risk of future collusion in particular the strategic linkage of existing markets and the expansion into new ones are analyzed in the light of the multimarket contact theory considering investment in interconnection among member states the internal market issue is investigated as a solution to the risks coming from liberalisation

on the economic efficiency of liquidated damages abstract recently aghion and bolton american economic review 1987 77 388 401 have shown that liquidated damages can serve as a barrier to entry and may therefore be socially harmful in this paper i show that liquidated damages remain excessive and continue to serve as a barrier to entry even in the presence of relationship specific investment but may nevertheless have an overall positive effect on welfare

upgrades switching costs and the leverage theory of tying this article investigates the role of product upgrades and consumer switching costs in the tying of complementary products previous analyses have found that a monopolist of one product will not increase its profits and reduce social welfare by tying and leveraging its monopoly position into a complementary market if the initial monopolised product is essential where essential means that all uses of the complementary good require the initial monopolised product we show that this is not true in settings characterised by product upgrades and consumer switching costs we also discuss various extensions including the role of the reversibility of tying

the timing of mergers along the production chain capital structure and risk dynamics abstract i demonstrate that the timing of vertical mergers is generally dependent on industry characteristics my predictions are consistent with empirically observed patterns of vertical mergers i show that merger activity during economic upturns tends to be motivated by operating efficiencies while merger activity during economic downturns tends to occur as a means of keeping production chain operational mergers allow firms to capture synergies and improve efficiencies in order to survive economic contractions the pricing framework implies that a vertical merger decision usually reduces risk during two different economic states

an analysis of monthly household energy consumption among single family residences in texas 2010 demographic socioeconomic and housing characteristics influence variation in household energy consumption by combining household level utility public and proprietary data we examine predictors of household energy consumption in a texas urban area using quantile regression this analysis assesses the relationship between energy consumption and predictors at the middle and both ends of the distribution 10th and 90th percentiles results indicate potential opportunities to lower consumption among the highest energy consuming households including those with pools with non central cooling with people working from home those built on pier post foundation and those that are renter occupied these findings suggest significant opportunities to reduce consumption and demand as in the study area almost 10 of housing units are renter occupied 18 percent are without central cooling and 7 have pools capturing a significant portion of these homes for retrofit conservation efforts through marketing has potential to produce substantial results producing a better understanding of determinants of household energy consumption using the methods presented has potential to assist development and implementation of strategies to reduce consumption and increase efficiency

buyer power and intrabrand coordination we analyze the competitive effects of vertical contracts in a contracting situation where rival retailers offer contracts to a manufacturer in contrast to bernheim and whinston 1998 who study the situation in which competing manufacturers offer contracts to a common retailer we find that two part tariffs even if contingent on exclusivity or not do not suffice to implement the monopolyoutcome richer arrangements including e g conditional fixed fees and upfront payments are thus required to internalize all contracting externalities the welfare implications are ambiguous on the one hand richer contracts ensure that no efficient retailer is excluded on the other hand they allow firms to maintain monopoly prices despite intrabrand competition simulations suggest that the latter effect may be more significant

strategic ex ante contracts rent extraction and opportunity costs this article cosiders the possibility that a seller can contract with one uninformed buyer prior to an auction involving two potential buyers the seller s optimal strategic ex ante contract more accurately reflects joint opportunity costs of the seller and the contracted buyer and therefore extracts more rent from the entrant moreover this ex ante contract mitigates the seller s ex post rent seeking vis a vis the contracted buyer accordingly it may create more social welfare than the absence of ex ante contracts depending upon the contracted buyer s financial constraint and the distributions of trade surplus implementation of the optimal strategic ex ante contract and policy implications are discussed

an energy pricing scheme for the diffusion of decentralized renewable technology investment in developing countries the purpose of this paper is to investigate price support for market penetration of renewable energy in developing nations through a decentralized supply process we integrate the new decentralized energy support renewable premium tariff to analyze impacts of tariff incentives on the diffusion of renewable technology in senegal based on photovoltaic and wind technologies and an assessment of renewable energy resources in senegal an optimization technique is combined with a cash flow analysis to investigate investment decisions in renewable energy sector our findings indicate that this support mechanism could strengthen the sustainable deployment of renewable energy in remote areas of senegal although different payoffs emerged profits associated with a renewable premium tariff are the highest among the set of existing payoffs moreover in analyzing impacts of price incentives on social welfare we show that price tariffing schemes must be strategically scrutinized in order to minimize welfare loss associated with price incentives finally we argue that a sustainable promotion of incentive mechanisms supporting deployment of renewable technology in developing nations should be carried out under reliable institutional structures the additional advantage of the proposed methodology is its ability to integrate different stakeholders producers investors and consumers in the planning process

willingness to pay for unfamiliar public goods preserving cold water coral in norway the world s largest concentration of cold water coral cwc is found off the norwegian coast most cwc discoveries are recent posing new challenges for norwegian coastal and fishery authorities regarding the management of deep sea resources scientific knowledge of cwc is limited and many citizens have not even heard about them this creates problems for the application of the stated preference methods to capture their economic value and very few such studies have been conducted to fill this gap we designed a discrete choice experiment which was implemented in a valuation workshop setting in order to derive estimates of participants willingness to pay wtp for increasing the protection of cwc despite the fact that marine industries such as oil gas and fisheries could be adversely affected by cwc protection this did not reduce the respondents willingness to pay for further protection the possibility that cwcs play an important role as habitat for fish was the single most important variable to explain respondents wtp for cwc protection the survey revealed a high degree of preference heterogeneity while we found an average wtp for cwc protection in the range of eur 274 287

rural versus urban preferences for renewable energy developments development of renewable energy resources such as wind farms and hydro electric schemes are being promoted as a new method of expanding and diversifying employment in rural areas however such energy projects are associated with a range of environmental impacts which might be detrimental to other economic activities such as those based on nature tourism the authors use a choice experiment to quantify peoples preferences over environmental and employment impacts that may result from the deployment of renewable energy projects in rural areas of scotland focussing in particular on any differences between the preferences of urban and rural dwellers and on heterogeneity within these groups rural and urban households are shown to have different welfare gains which are dependent on the type of renewable energy technology and on the scale of project under consideration

exclusionary pricing in markets with interdependent demands in this paper i use a simple model to study the competitive effects of exclusionary pricing involving two markets related by a positive demand externality it is shown that below cost pricing on one of these markets can allow an incumbent firm to exclude from both markets a more efficient rival which does not have a customer base yet however when exclusion occurs it is always socially optimal in addition under some circumstances there is inefficient entry the entrant wins both markets while the social optimum would require the incumbent to win them