large scale deployment of renewables for electricity generation comparisons of resource assessments suggest that sufficient renewable energy resources are available to allow for large scale deployment of renewable energy technologies economic analysis identifies barriers to the adoption of renewable energy sources resulting from i market structure ii competition in an uneven playing field and iii various non marketplace barriers however even if these barriers are removed the problem of technology lock out remains the key policy response is strategic deployment coupled with increased r d support to accelerate the pace of improvement through market experience this paper suggests significant contributions from various technologies are possible but does not assess their optimal or maximal market share copyright 2005 oxford university press

efficient and durable decision rules with incomplete information we compare six concepts of efficiency for economies with incomplete information depending on the stage at which individuals welfare is evaluated and on whether incentive constraints are recognized an example is shown in which an incentive efficient decision rule may be unanimously rejected by the individuals in the economy we define durable decision rules which can resist such unanimous rejection and show that efficient durable decision rules exist

analysing the interactions between renewable energy promotion and energy efficiency support schemes the impact of different instruments and design elements abstract co2 emissions reduction renewable energy deployment and energy efficiency are three main energy environmental goals particularly in europe their relevance has led to the implementation of support schemes in these realms their coexistence may lead to overlaps synergies and conflicts between them the aim of this paper is to analyse the interactions between energy efficiency measures and renewable energy promotion whereas previous analyses have focused on the interactions between emissions trading schemes ets and energy efficiency measures and ets and renewable energy promotion schemes furthermore the analysis in this paper transcends the certificate debate i e tradable green and white certificates and considers other instruments particularly feed in tariffs for renewable electricity the goal is to identify positive and negative interactions between energy efficiency and renewable electricity promotion and to assess whether the choice of specific instruments and design elements within those instruments affects the results of the interactions

efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

the balance of power in rural marketing networks a case study of snake trading in cambodia abstract producers in small scale rural markets often receive unfavourable prices for their goods as a result of more powerful market participants this study uses a combination of price analysis and interview data to assess the position of snake hunters in the aquatic snake market from tonle sap lake in cambodia despite the hunters dependence on intermediary traders for market access and credit the evidence implies that they are not powerless participants intermediary traders operate under high competition as a result of the increasing scarcity of snakes and therefore despite interlocked credit and snake markets offer relatively high prices to hunters

simultaneous attainment of energy goals by means of green certificates and emission permits abstract we discuss the analytical effects of introducing emission permits and green certificates and the corresponding quotas as regulatory mechanisms to respectively reduce emissions from electricity production and ensure a certain deployment of renewable energy the different case studies in this paper show that both instruments can be used in order to reach an emission goal or a goal of renewable energy however the combination of these instruments and the way they are used is shown to be important for the price faced by consumers it is shown that the effect on the consumer price is not an unambiguous increase with the introduction of a green quota there is a choice between quotas leading to a lower consumer price and quotas leading to a higher consumer price as a result of this it is shown that it is always optimal to reach a renewable energy deployment goal by the use of green certificates however to reach an emission goal it is sometimes most favourable with respect to consumer prices to use green certificates and sometimes to use emission permits

why does the combination of the european union emissions trading scheme and a renewable energy target makes economic sense abstract the european climate and energy mix of targets and policies has been criticised by many economists in particular it is often argued that the renewable energy targets do not make economic sense because they represent an expensive option to reduce co2 emissions within a cap and trade scheme such as the european union emissions trading scheme eu ets in addition it has also been claimed that support for renewable electricity deployment negatively interacts with the eu ets having a dampening effect on the co2 price which favours the dirtiest technologies and is detrimental for the greener ones in this article we argue that this mainstream economic view is short sighted and that a multidisciplinary economic analysis of the climate and energy policy mix is required mainstream economic analysis is based on a narrow approach for the assessment of instrument combinations and neglects relevant insights from several economic disciplines including innovation economics and political economy approaches in reality economic theory supports the combination of an ets and renewable energy targets the existence of different policy goals and market failures the demand pull influence of renewable energy policies on innovation a political economy approach and the different risk exposure of renewable energy technologies call for a policy mix although policy combinations are not a panacea and bring problems on their own the aforementioned negative interaction between renewable energy deployment and the carbon price in the eu ets can be mitigated through appropriate coordination and or instrument choice and design

bargaining over reform abstract this paper models the delay in a macroeconomic stabilization as the outcome of a bargaining game between two parties who must reach an agreement over how the stabilization cost is to be shared the paper modifies alesina and drazen s 1991 american economic review 81 1170 1189 war of attrition model by endogenizing the distribution of the stabilization costs through a bargaining game using this bargaining framework the paper analyzes the role of crises and foreign assistance in bringing about a settlement to the distributional conflict in the bargaining game a crisis that increases the welfare loss from not stabilizing the economy will lower the probability of delay in contrast foreign aid that is used to reduce the stabilization costs will further increase the delay in reaching an agreement between the two parties

cyclical fluctuations in strike activity using a set of data on contracts and strikes for the period 1970 81 the author distinguishes among the roles of aggregate business conditions labor market conditions and product market conditions in the determination of strike incidence and duration strike incidence is found to be highest in industries that are depressed relative to the rest of the economy but in regions with low unemployment this finding is consistent with the theory that the cost of a strike to a firm increases with the demand for its product and the cost of a strike to the union increases with unemployment another finding however is that strikes are longest in industries that are booming relative to the rest of the economy

white certificate schemes economic analysis and interactions with the eu ets this paper examines the economic environmental and distributional impacts of an idealised tradable white certificate twc scheme and shows how the impacts are modified when the scheme operates in parallel with the eu emissions trading scheme eu ets it uses simple graphical techniques to assess whether a twc scheme will increase decrease or have an ambiguous effect on electricity demand wholesale and retail electricity prices carbon emissions and investment in energy efficiency paying particular attention to the interpretation of additionality

some recent results in bargaining theory two person bargaining situations are very frequent in economic life among the most natural examples one can think of wage negotiations between an employer and a person he wishes to hire another example at a more aggregate level concerns wage renegotiations that take place periodically in large firms between the manager and the workers representative as a final example let me mention the simple and very usual situation of a seller and a potential buyer who bargain over the price of some indivisible object unlike for competitive markets economic theory and especially mathematical economics has not until recently been very helpful in explaining how prices are determined in these bargaining situations the usual explanations refer to a vague notion of respective bargaining powers of the two agents there is a clear need to precise the relations between this mysterious notion and quantifiable economic data like preferences what bargainers can get in case of an agreement outside options what they can get if agreement fails impatience risk aversion and finally information of bargainers about each other after the seminal contributions of hicks and zeuthen in the thirties john nash 1950 1953 was the first to adopt in the early fifties a systematic theoretical approach to the bargaining problem nash introduced a distinction between the axiomatic or normative approach on the one hand and the strategic or positive approach on the other hand of course the two approaches must not be viewed as independent what has come to be known as the nash program can be described as follows starting from an axiomatic solution having desirable normative properties like the solution proposed by nash himself is it possible to design a particular bargaining process that would naturally lead rational negotiators to the outcome prescribed by the axiomatic solution behind the word rational hides the main difficulty of this program find a satisfactory concept of non cooperative equilibrium for bargaining games

towards a sustainable electrification in ghana a review of renewable energy deployment policies abstract ghana has been facing perennial power rationing over the years due to fuel supply challenges the country s energy system is likely to suffer additional strain from rising energy demand fueled by population growth rapid urbanization and economic development fortunately there are enormous renewable energy resources which can provide sustainable electrification as backbone to socioeconomic development while curbing global warming ghana s energy strategy targets 100 access to electricity and 10 share of sustainable power in national generation mix by 2020 despite the existence of numerous policies and a renewable energy act current contribution of non conventional renewable energy to electricity generation is less than 1 the right mix of policies to address the unique domestic conditions and achieve its specific development goals remains insufficient this study reviews the regulatory framework financing incentives and other provisions of ghana s renewable energy act it critically examines the policy s strengths weaknesses opportunities and treats based on comparative analysis and lessons drawn from failed and successful implementation of similar policies around the world the study also assesses the impact of policy on project development it was found that the performance of ghana s renewable energy policy on grid connected electricity has been poor compared to its target the fundamental reasons for this unsatisfactory performance may be attributed to partial implementation of policies lack of market driven support schemes lack of pricing policy framework weak grid network limited access to funds and inconsistencies in renewable energy development strategies this study proposes the following countermeasures i ghana should comprehensively harmonize renewable energy regulatory and fiscal policies with domestic electricity pricing regime ii market driven support schemes should be prioritized for cost effectiveness and minimum governmental influence these reforms can help eliminate some of the major barriers to sustainable electrification in ghana while the lessons provide a learning curve for other african countries

economic growth in a cross section of cities abstract we examine the relationship between urban characteristics in 1960 and urban growth between 1960 and 1990 income and population growth move together and both types of growth are 1 positively related to initial schooling 2 negatively related to initial unemployment and 3 negatively related to the initial share of employment in manufacturing racial composition and segregation are uncorrelated with urban growth across all cities but in cities with large nonwhite communities segregation is positively correlated with population growth government expenditures except for sanitation are uncorrelated with growth government debt is positively correlated with later growth

supplementing an emissions tax by a feed in tariff for renewable electricity to address learning spillovers abstract in the presence of learning spillovers related to renewable energy technologies an optimal strategy to mitigate climate change should complement an emissions tax by a subsidy for renewables this article addresses the question how such subsidy should be designed it is shown that the widely used approach of a revenue neutral fixed feed in tariff can yield an optimal outcome under restrictive conditions only it has to be adapted continuously as the electricity price changes moreover funding the tariff by a surcharge on the electricity price has important implications for the design of the emission tax the optimal tax rate has to be below the pigovian level differentiated across fossil fuels and adapted over time as the patterns of technological development change these requirements may pose a formidable challenge for practical decision making however it is important to point out that the eventual choices made with respect to the design and funding of a feed in tariff have to be based on a careful and more comprehensive policy assessment including inter alia economic effects beyond the electricity sector and existing institutional constraints

support schemes and vertical integration who skims the cream this paper examines how the effectiveness of feed in tariffs for distributed generators producing renewable electricity depends on industry structure i e vertical integration vs unbundling a stylized analytical model with a monopolist and a competitive fringe distributed generators will be developed to analyze the impact of feed in tariffs on renewable power production the vertically integrated monopolist maximizes profits by setting the electricity price for residual demand and a network access charge incurred by the fringe the fringe receives a fixed feed in tariff per unit of electricity produced under vertical integration a rise in the feed in tariff induces the monopolist to raise access charges for fringe firms and skim part of their additional income this partially offsets the supply increase of the fringe firms stimulated by the feed in tariff however in the case of effective unbundling with an externally set access charge there is no possibility for the monopolist to extract part of the fringe s profit then the feed in tariff fully accrues to the competitive fringe and its supply will further increase this setting will be extended to horizontal expansion when the monopolist also enters the renewable production segment the effects on prices and output will be derived and compared

qualitative uncertainty in a market with bilateral trading bargaining between a single seller and a succession of potential buyers of an indivisible object is studied in this paper the seller bargains with one buyer at a time and switching buyers is costly the seller does not know the buyers reservation prices and buyers cannot observe the quality of the object if the costs of switching buyers are high there exists a signalling equilibrium in which the seller s price offer reveals the quality of the object if the costs of switching are low adverse selection occurs and the high quality seller drops out of the market

bargaining with two sided incomplete information an infinite horizon model with alternating offers this paper examines an infinite horizon bargaining model incorporating five features two sided incomplete information with potentially information revealing strategies an infinite horizon uncertainty concerning the potential gains from trade an illumination of interesting qualitative bargaining issues and plausible free from arbitrarily specified out of equilibrium conjectures equilibria these features motivated in the paper have powerful implications a nash equilibrium exists and is generically both unique and sequential comparative static implications of variations in the game s specifications are developed we find that natural indications of bargaining strength emerge from the model and establish the intuitive result that an increase in a player s relative bargaining strength makes that player more likely to capture the gains from bargaining

do the world s largest cities follow zipf s and gibrat s laws we examine whether the size distribution and the growth process of the world s largest cities follow zipf s law and gibrat s law the parametric results of the size distribution analysis reject zipf s law for all sample sizes and also show the zipf exponent systematically declines as the sample size increases the growth process analysis confirms gibrat s law and yields a local zipf exponent of one for cities with a normalized population less than 0 53 which includes about 95 of the total observations the deviations from zipf s law occur at the extreme upper tail and are likely a result of restricted mobility of population across countries however given that gibrat s law holds we can expect the size distribution to converge to zipf s law with a decline in the barriers to immigration

optimal stalling when bargaining this paper analyzes an alternating offer model of bargaining over the sale of an asset in a market such as that for housing in which another agent may come and compete for the right to strike a deal the analysis allows the buyer and seller to have possibly differing views as to how likely such a competition is hence the buyer and the seller disagree about their respective bargaining powers these views adjust to market realizations as the parties learn it is shown that there exists a unique subgame perfect equilibrium which can be explicitly constructed hence conditional on market conditions equilibrium prices and optimal stall lengths that is delay can be found bargaining delay can only occur if there is optimism not pessimism and only if the parties are open to learning as time elapses this delay can occur even for very small levels of optimism and the delay can be for economically significant periods

impact of renewables deployment on the co2 price and the co2 emissions in the european electricity sector abstract as of 2005 electricity generators in europe operate under the european union emission trading system eu ets at the same time european member states have launched support mechanisms to stimulate the deployment of renewable electricity sources res e res e injections displace co 2 emissions within the sectors operating under the eu ets and they reduce the demand for european union allowances euas thereby reducing the eua price this paper presents the results of an ex post analysis to quantify the impact of res e deployment on the eua price and co 2 emissions in the western and southern european electricity sector during the period from 2007 to 2010 following from an operational partial equilibrium model of the electricity sector this study shows that the co 2 displacement from the electricity sector to other ets sectors due to res e deployment can be up to more than 10 of historical co 2 emissions in the electricity sector the eua price decrease caused by res e deployment turns out to be likely significant

simulating price patterns for tradable green certificates to promote electricity generation from wind abstract this article uses computer simulation to anticipate the price dynamics in a market for tradable green certificates tgcs these markets have been used in europe to promote generation of electricity from renewable resources like wind similar markets have been proposed in the united states of america usa where the certificates are called renewable energy credits recs the certificates are issued to the generating companies for each megawatt hour of renewable electricity generation the companies may sell the certificates in a market and the revenues from certificate sales provide an extra incentive to invest in new generating capacity proponents argue that this market based incentive can be designed to support government mandates for a growing fraction of electricity generation from renewable sources in the usa these mandates are set by the states and are known as renewable portfolio standards rps we simulate the price dynamics of a market designed to support an aggressive mandate for wind generation in the northwestern usa the simulations show that the certificate price climbs rapidly to the cap in the early years after the market opens investors then react to these high prices with construction of new wind capacity after a few years wind generation meets and then exceeds the requirement we show that this pattern appears again and again when the simulations are repeated with wide variations in the estimates of behavioral parameters we use the model to study the impact of different trading strategies by the wind companies and by the distribution companies we also study the simulated market response if the usa adopts the carbon allowance market envisioned in the climate stewardship act the article concludes with recommendations for policy makers involved in tgc market design

bargaining and sharing innovative knowledge we consider the problem of bargaining over the disclosure of interimresearch knowledge between two participants in an r d race for an ultimate patentable invention licence fee schedules that are functions of the amount of knowledge disclosed by the leading to the laggingagent are examined for their abilities to attain efficient outcomes andvarying shares of the surplus arising from disclosure in hersequential offers bargaining games the uninformed buyer is able to elicitfull disclosures without sharing the incremental surplus with any type ofthe licensor and thus do as well as a perfectly informed and discriminatingknowledge licensee

gibrat s law for all cities two empirical regularities concerning the size distribution of cities have repeatedly been established zipf s law holds the upper tail is pareto and city growth is proportionate census 2000 data are used covering the entire size distribution not just the upper tail the nontruncated distribution is shown to be lognormal rather than pareto this provides a simple justification for the coexistence of proportionate growth and the resulting lognormal distribution an equilibrium theory of local externalities that can explain the empirical size distribution of cities is proposed the driving force is a random productivity process of local economies and the perfect mobility of workers

bilateral trading as an efficient auction over time a market composed of pairwise trading under incomplete information is modeled in order to analyze how resources are allocated among competing uses when information about trade gains is incomplete contrary to the results from studying a single such trade sufficient homogeneity across potential trades guarantees that efficiency obtains this is analogous to simple first price auctions with homogeneous bidders where bidders have a common bid function and as a result the high bidder also places the highest value on the auctioned object with enough symmetry the decentralized bilateral trades in the present model occur as if they were made in a first price auction that occurs through time the robustness of the efficiency result to heterogeneities among agents and to nontrivial search intensity decisions is then considered

the danish green certificate system some simple analytical results we formulate a simple static equilibrium model for the electricity market taking account of both green certificates and co2 emission permits the objective is to investigate the relationship between these markets under the existence of upper and lower price bounds on the green certificates both in the short and in the long run we perform various comparative static changes of the parameters of the model and study how these affect the endogenous variables of the model as well as producers and consumers surplus we also investigate the effects of imports and exports of electricity several comparative static results are derived and in particular it is shown that harsher co2 emission constraints and increased import wholesale price both may lead to reduced capacity of green electricity

uncertainty about uncertainty and delay in bargaining we study a one sided offers bargaining game in which the buyer has private information about the value of the object and the seller has private information about his beliefs about the buyer s valuation we show that this uncertainty about uncertainties dramatically changes the set of outcomes in particular second order beliefs can lead to a delay in reaching agreement even when the seller makes frequent offers we show that not all types of second order beliefs lead to a delay when the buyer assigns positive probability to the seller knowing the buyer s value then delay not only can occur but it must occur for a class of equilibria however in all other cases delay will never occur

costs and benefits of the renewable production of electricity in spain abstract the reduction of pollutant emissions and greenhouse gases as well as the strong energy dependence on fossil fuels gas and fuel oil have among other reasons led many countries in recent years to develop policies to promote and encourage the use of alternative sustainable clean and predictable sources of energy this paper presents an overview of the production of electricity from renewable sources pe res in spain and offers an outline of the current level of development of renewable energy it also reviews the current support system the costs of integrating renewable energy into the electric system as well as the effects of this type of energy on the electricity wholesale market price the gross domestic product gdp the environment human health and employment

bargaining with incomplete information an infinite horizon model with two sided uncertainty the resolution of any bargaining conflict depends crucially on the relative urgency of the agents to reach agreement and the information each agent has about the others preferences this paper explores within the context of an infinite horizon bargaining model with two sided uncertainty how timing and information affect the rational behaviour of agents when commitment is not possible since the bargainers are uncertain about whether trade is desirable they must communicate some of their private information before an agreement can be reached this need for learning due to incomplete information about preferences results in bargaining inefficiencies trade often occurs after costly delay thus the model provides an explanation for the inefficient bargaining behaviour that appears to occur often in practice

bargaining under incomplete information this paper presents and analyzes a bargaining model of bilateral monopoly under uncertainty under the bargaining rule proposed the buyer and the seller each submit sealed offers that determine whether the good in question is sold and the transfer price the nash equilibrium solution of this bargaining game implies an offer strategy of each party that is monotonic in its own reservation price and depends on its assessment of the opponent s reservation price issues of relative bargaining advantage and efficiency are examined for a number of special cases finally we discuss the appropriateness of the nash solution concept

dynamic bargaining with transaction costs a buyer and seller alternate making offers until an offer is accepted or someone terminates negotiations the seller s valuation is common knowledge but the buyer s valuation is known only by the buyer impatience to reach an agreement comes from two sources the traders discount future payoffs and there are transaction costs of bargaining equilibrium behavior involves either immediate trade delayed trade or immediate termination depending on the size of the gains from trade and the relative bargaining costs this contrasts with the pure discounting model where termination never occurs and the pure transaction cost model where delayed trade never occurs

recent advances in oligopoly theory from a game theory perspective abstract this paper surveys the contribution that recent developments in game theory have made to the understanding of oligopoly theory it is argued that conventional models suffer from the problem that there are a number of solution concepts offered with little guidance as to which should be selected and this is related to the static nature of the models employed one important development in game theory has been the analysis of repeated games and when applied to oligopoly theory this suggests that outcomes may be more cooperative than conventional theory suggests related to this is the requirement that firms employ credible threats to punish cheating from cooperative outcomes and the paper examines the extent to which imperfect information may restrict the scope of firms to employ such punishments one way in which firms may seek to make threats credible is through strategic investments for example in production capacity and the paper explores how competition over price or output is integrated with competition over instruments for strategic investment

a review on promoting share of renewable energy by green trading mechanisms in power system abstract in order to promote the development of renewable energy power generation many countries have issued corresponding policies meanwhile some green trading mechanisms have been implemented in power industry and this paper has mainly presented a review on promoting share of renewable energy by green trading mechanisms in power system with a focus on promotion effects of three mechanisms feed in tariff renewable portfolio standard and emission trading scheme apart from a review summaries comparisons and an outlook for future study are also presented our review suggests that feed in tariff and renewable portfolio standard can effectively increase the share of renewable energy power and lead to renewable resource diversity in addition emission trading also provides stimulus for development of renewable energy besides mitigation of carbon emission

is renewable energy a cost effective mitigation resource an application to the spanish electricity market abstract this paper evaluates the net effect of renewable energy policy in spain from 2002 to 2017 and calculates its cost effectiveness in terms of co2 emission reductions in the production of electricity our conclusions indicate that although the phasing out of feed in tariffs reduced the regulatory costs it also limited renewable participation in the electricity market leading to an increased electricity price and higher emissions according to our results the joint effect of i the value of avoided emissions due to renewable energy participation and ii the merit order effect was able to compensate for the regulatory costs subsidies up until 2010 while the sign of the net effect was reversed from 2011 to 2017 finally we find that the economic implications of emission reductions are highly dependent on how the social cost of carbon is measured

optimal regulation of renewable energy a comparison of feed in tariffs and tradable green certificates in the spanish electricity system abstract incentives for renewable energy based on feed in tariffs have succeeded in achieving high levels of renewable installed capacity however these incentives have not been responsive to market conditions or price signals imposing in some cases a great financial burden on consumers when renewable energy sources reached significant levels a way out of this problem could be a market mechanism where incentives respond to the level of investment on renewables we explore this issue comparing a regulatory system based on tradable green certificates able to react to market changes to a feed in tariffs incentive scheme we model the strategic interaction between participants in the electricity pool and the tradable green certificates market and focus on the optimal regulation for the retailer segment which generates the desired demand for green certificates as a decreasing function of the certificate price we then calibrate our theoretical model with data from the spanish electricity system for the period 2008 2013 simulations show that a green certificate scheme could both achieve the 2020 targets for renewable electricity and reduce regulatory costs however the role of regulators is still important since setting the right target for renewable electricity affects the cost burden of the system

tolerance of arrearages how imf loan policy can effect debt reduction a model of bargaining with asymmetric information is applied to the case of sovereign debt and imf intervention debtors and creditors are assumed to bargain over the price to be paid by the debtors for their outstanding debt and the ability of the debtors to delay an agreement is private information it is shown that an imf policy of no lending in arrears increases the price of the debt increases any delay to agreement and increases the likelihood that the creditor will demand the highest price an imf policy of lending in arrears in contrast decreases the price of the debt decreases the delay time to agreement and my increase the likelihood that the creditor accepts the lowest price as it shifts the locus of bargaining power predictions of the model are consistent with results from recent debt agreements and implications for current debate on debt reduction strategies are discussed

co2 abatement from renewables in the german electricity sector does a co2 price help abstract the overlapping impact of the emission trading system ets and renewable energy re deployment targets creates a classic case of interaction effects whereas the price interaction is widely recognized and has been thoroughly discussed the effect of an overlapping instrument on the abatement attributable to an instrument has gained little attention this paper estimates the actual reduction in demand for european union allowances that has occurred due to re deployment focusing on the german electricity sector for the five years 2006 through 2010 based on a unit commitment model we estimate that co 2 emissions from the german electricity sector are reduced by 35 to 60 mtons or 10 to 18 of what estimated emissions would have been without any re policy but with the co 2 price remaining in place at the observed level furthermore we find that the abatement attributable to re injections is greater in the presence of an allowance price than otherwise the same holds for the ets effect in presence of re injection this interaction effect is consistently positive for the german electricity system at least for the considered years and on the order of 0 5 to 1 5 of emissions

farm gate tomato price negotiations under asymmetric information this article provides an empirical analysis of farm gate tomato price negotiations under asymmetric information regression models are estimated to analyze when and by how much sellers stick to their initial ask prices and what explains the variation in the initial ask offer price spread detailed information on 66 farm gate tomato transactions and daily tomato wholesale price data from the central vegetable market in addis ababa are used for the analysis estimation results show that farmers are less committed to their initial ask price when the buyer speaks out the transaction price first when their quality perceptions of the tomatoes being transacted differ from those of the buyers and when their tomato farm is at a large distance from the main road sellers stick more to their initial ask price when they know that the central market price is high the initial ask offer price spread decreases when the buyer speaks out the initial negotiation price first but increases in the difference in quality perception between buyer and seller and in the quantity of tomatoes being transacted

decoupling the eu ets from subsidized renewables and other demand side effects lessons from the impact of the eu ets on co2 emissions in the german electricity sector abstract this paper analyzes the impact of the eu ets on co2 reduction in the german electricity sector we find an ets induced emission abatement which is not exceeding 6 of total emissions with a maximum already in 2010 thereafter the ets has not induced additional reductions this outcome corresponds to the recent debate about sub optimal performance of the eu ets caused by excessive allowances following up on this we develop a unilateral flexible cap to eliminate demand side effects which lead to excessive allowances the unilateral flexible cap is based on emission intensities using the works of newell and pizer 2008 sue wing et al 2009 we prove that an intensity based emission cap is advantageous in the german electricity sector when compared to an absolute cap an ex post analysis shows that the amount of excessive allowances resulting from the economic crisis during the second trading period could have been significantly lowered with a unilateral flexible cap this approach also decouples the eu ets from a simultaneous promotion of renewable energy

early settlement in european merger control we analyse the determinants of early settlement between merging parties and the european commission over remedies that remove concerns of anticompetitive effects this extends the previously narrow range of econometric literature on early settlement consistent with the theory of early settlement our results confirm the importance of delay costs and of uncertainty measured by the complexity of the economic analysis required for each merger we also find a non monotonic effect of agency resourcing which raises questions about the commission s efficiency in times of high case load econometrically we select a sample of merger decisions in which the european commission intervened due to concerns of anticompetitive effects and our selection model provides estimates of the factors determining intervention by the commission conclusions are drawn for public policy

interactions between the power and green certificate markets abstract the current trend of liberalising the power markets is combined with ambitious deployment plans for power production based on renewable energy supplies a new policy scheme to ensure this extension has been developed in the form of a green certificate system with a politically determined target of deployment in such a system producers of renewably based electricity receive tradable certificates in proportion to the electricity they produce the producer can thereby sell these certificates and receive additional revenue apart from the power price this paper studies the price and consumption effects of such a system with a simple model we show that the effects are ambiguous this ambiguity is caused by the interaction between the two markets therefore the green certificate system is difficult to manage if the state has parallel energy targets such as a desired deployment of renewably based energy and a stabilisation or reduction of the energy consumption in addition this complicates the regulation through a deployment target of renewably based power production as the regulator has to be aware of the different effects which follow a specific target until now these effects have not been considered in the analyses of the green certificate system when introducing the system even though it might have considerable consequences for the success of the system

impacts of a common green certificate market on electricity and co2 emission markets in the nordic countries abstract the purpose of this study is to analyze the effects of introducing a common nordic system for tradable green certificates tgcs on the electricity market and a future market for tradable co 2 emission permits teps in the analysis the energy system model generator markal was used to model the electricity and district heating supply systems in the four nordic countries sweden norway finland and denmark it is shown that the introduction of tgc quotas reduces wholesale electricity and tep prices the impact on the latter is very pronounced retail electricity prices may become lower or higher depending on the tgc quota than if obligations to fulfill tgc quotas were absent the tgc scheme s efficiency in reducing a specific amount of co 2 emissions is also compared to the corresponding efficiency of a tep scheme involving a broader range of technologies furthermore obligations to fulfill tgc quotas affect investment incentives for new non renewable electricity supply this seems especially true for gas fired power plants finally it is indicated that electricity supply based on biomass combustion dominates the tgc scheme at least in the short run

dynamic bargaining with action dependent valuations abstract an infinite horizon dynamic bargaining model is presented in which actions affect the expected future value of the buyer seller match because actions directly affect the future surplus to be bargained over the model is unlike other models that tie the dynamic process to nature alone focusing on a subset of weak markov equilibria several results come about that are not found in static bargaining models using similar bargaining protocols in particular optimal price demands can be lower higher than the buyer s lowest highest possible valuation and several empirical features concerning wage settlements and strike incidence from labor union contract negotiations can be explained

zipf s law for cities an explanation zipf s law is a very tight constraint on the class of admissible models of local growth it says that for most countries the size distribution of cities strikingly fits a power law the number of cities with populations greater than s is proportional to 1 s suppose that at least in the upper tail all cities follow some proportional growth process this appears to be verified empirically this automatically leads their distribution to converge to zipf s law

the area and population of cities new insights from a different perspective on cities the distribution of city populations has attracted much attention in part because it constrains models of local growth however there is no consensus on the distribution below the very upper tail because available data need to rely on legal rather than economic definitions for medium and small cities to remedy this difficulty we construct cities from the bottom up by clustering populated areas obtained from high resolution data we find that zipf s law for population holds for cities as small as 5 000 inhabitants in great britain and 12 000 inhabitants in the us we also find a zipf s law for areas jel r11 r12 r23

does hierarchical governance facilitate adaptation to changed circumstances abstract the transaction cost theory of economic organization maintains that by merging and adopting a hierarchical governance structure two firms can circumvent the bargaining problem which would impede adaptation to changing circumstances if they remained independent i analyze this claim in a simple model which allows the costs of hierarchical organization imperfect selective intervention to be evaluated alongside the costs due to the bargaining problem delays and disagreement both costs are due to informational asymmetries which are assumed to be unaffected by the choice of governance structure examples are presented which support the fundamental transaction cost proposition that hierarchical governance is preferred when parties are highly interspecific and there are significant gaps in the contract the intuition is that rational bargainers make less attractive offers in precisely those circumstances where adaptation is likely to be extremely valuable integration effectively separates the decision to adapt from the division of the resulting surplus and so is relatively efficient when substantial quasi rents are at stake

a nonparametric analysis of the growth process of indian cities we examine the growth process of the largest cities in india for the post economic reform period 1991 2011 to analyze gibrat s and zipf s laws by applying nonparametric estimation the results from stochastic kernel contour plots and expected growth rate and variance conditional on city size establish that gibrat s law holds for largest cities in india i e city growth is independent of population size and the local zipf exponent is around one and stable gibrat s law is also confirmed by the parametric regression of the aggregate relationship of the growth rate on city size

financial risks for green electricity investors and producers in a tradable green certificate market this paper analyzes financial risks in a market for tradable green certificates tgc from two perspectives existing renewable producers and potential investors in new renewable electricity generation capacity the equilibrium pricing mechanism for a consumer based tgc market is described and a market with wind turbines as the sole renewable technology is analyzed in this framework tgc prices and fluctuations in production from wind turbines will be negatively correlated and as a result tgc price fluctuations can actually help decrease the total financial risk based on this recognition analytical expressions for revenue variance minimizing trading strategies are derived and an analysis of the demand and supply for financial hedging is used to show that forward contracts will be traded at a risk premium

design limitations in australian renewable electricity policies abstract renewable electricity is pivotal to the medium and long term reduction of australia s greenhouse gas ghg emissions if deep cuts in them are eventually implemented this paper examines the effectiveness of the principal existing policies that could potentially promote the expansion of renewable electricity relec in australia the expanded renewable energy target ret the proposed emissions trading scheme ets and the state and territory based feed in tariffs we find the effectiveness of ret is severely eroded by the inclusion of solar and heat pump hot water systems by the inclusion of phantom tradable certificates and by high electricity consumption growth we also find that the ets will not produce a high enough carbon price to assist most relec technologies before 2020 and that most of the feed in tariffs exclude large scale relec and will give little assistance to small scale relec because they are mostly net tariffs unless there is a major revision of its relec policy mechanisms australia will fail to reach its renewable electricity target and in particular will fail to build up its solar generation capacity which could be a major source of future deep cuts in the country s electricity generation emissions

bilateral trading in networks in many markets goods flow from initial producers to final customers travelling through many layers of intermediaries and information is asymmetric we study a dynamic model of bargaining in networks that captures these features we show that the equilibrium price demanded over time is non monotonic but the sequence of transaction prices declines over time with the possible exception of the last period the price dynamic is therefore reminiscent of fire sales and hot potato trading traders who intermediate the object arise endogenously and make a positive profit the profit earning intermediaries are not necessarily traders with many connections for the case of multilayer networks they belong to the path that reaches the maximum number of potential buyers using the minimal number of intermediaries this is not necessarily the path of the network that maximizes the probability of consumption by traders who value the most the object i e welfare

predation mergers and incomplete information this article examines the strategic pricing of duopolists in anticipation of a takeover of one by the other in equilibrium the acquiring firm may expand its output to signal that it is a low cost rival and thereby improve the takeover terms if the merged firm willface potential entry a premerger expansion of output may be necessary to deter entry and to make the merger profitable in that case the acquiringjirm s output expansion increases industry concentration by facilitating the takeover and by deterring entry this establishes the rationality of predatory output expansions even when a merger or a takeover is possible and indeed anticipated a voluminous literature is devoted to exploring the role of pricing in altering industry structure to achieve monopoly power that literature discusses both price cutting to drive existing rivals from the industry predatory pricing and setting low prices to deter potential entrants limit pricing the former has received the lion s share of the attention of antitrust commentators and enforcers but the rationality of predatory pricing has been seriously questioned the major criticism has two parts i takeovers are a superior means of achieving monopoly power and where legal should therefore be used instead of price cutting and ii if a takeover is anticipated premerger price cutting merely dissipates some of the value of the merging parties and would thus be irrational the first argument was originally advanced by mcgee 1958 and later by telser 1965 and bork 1978 the essential idea is that since predation is costly firms should realize that a more profitable arrangement in the form of a merger exists and ought to be negotiated the second argument is a natural extension of the first in response to this criticism yamey 1972 provides two arguments first the aggressor knows that he may face other rivals in the future entrants into this or other markets those potential rivals may draw inferences from his current behavior about the response they will face if they enter in that case the aggressor may wish to develop a reputation for aggressive behavior second even if a takeover is anticipated the terms of the takeover may be affected by the pretakeover pricing

how individual preferences are aggregated in groups an experimental study abstract this paper experimentally investigates how individual preferences through unrestricted deliberation are aggregated into a group decision in two contexts reciprocating gifts and choosing between lotteries in both contexts we find that median group members have a significant impact on the group decision but the median is not the only influential group member non median members closer to the median tend to have more influence than other members by investigating the same individual s influence in different groups we find evidence for relative position in the group having a direct effect on influence these results are consistent with predictions from spatial models of dynamic bargaining for members with intermediate levels of patience we also find that group deliberation involves bargaining and compromise as well as persuasion preferences tend to shift towards the choice of the individual s previous group especially for those with extreme individual preferences

carbon mitigation in the electric power sector under cap and trade and renewables policies in europe co2 emissions from the electric power sector and energy intensive industries are capped under a cap and trade system i e the eu ets when other indirect measures are taken to impact emissions in a specific sector under the cap such as a push for renewables in the electric power sector this has implications on the overall allowance price and on co2 emissions both from this specific sector and the other sectors under the cap the central contribution of this paper is the derivation of impact curves which describe these interactions i e the impact on allowance price and the shift of emissions across sectors from a set of detailed simulations of the electric power system operation a so called emission plane is obtained from which impact curves can be derived focus is on interactions between co2 abatement through fuel switching and measures affecting the residual electricity demand such as deployment of renewables in the electric power sector as well as on interactions with other sectors both in a short term framework a case study for central western europe is presented the analysis reveals a substantial impact of renewables on co2 emissions and hence on emissions shifts across sectors and or on the co2 price

do support systems for res e reduce eu ets driven electricity prices abstract support systems for electricity from renewable energy sources res e can reduce electricity prices which have also been influenced by a co2 emission trading scheme ets additional res e substitutes electricity from fossil fuels and thus co2 emissions are reduced the demand for emission reductions is lowered as a result the co2 price is also reduced consequently the wholesale price for electricity decreases however most res e support systems are financed via the electricity market which increases the retail electricity price an assessment for germany shows that retail electricity prices in the first trading period of the eu ets 2005 2007 are lowered by 2 6 euro mwh due to additional res e considering the complete eu the effect is substantially higher this paper describes the effect and the influence of different policy designs it develops an approach for assessing the effect and applies it for the case of germany and roughly estimates the effect for the eu

claimholder incentive conflicts in reorganization the role of bankruptcy law when a firm is financial distress in most cases a set of mutually advantageous reorganization plans exist this article shows that the bankruptcy code by providing rules governing the negotiation process yields a unique solution to the reorganization process in addition the structure imposed by the code mitigates the holdout problem created by the individual claimant s divergent incentives article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

the effect of wind and solar power generation on wholesale electricity prices in australia abstract our paper investigates the effect of wind and utility scale solar electricity generation on wholesale electricity prices in australia over 2010 2018 we use both high frequency 30 min and daily datasets for the australian national electricity market nem we estimate autoregressive distributed lag models ardl to decompose the merit order effect of wind and utility scale solar pv generation over time and across states we find that an extra gw of dispatched wind capacity decreases the wholesale electricity price by 11 aud mwh at the time of generation while solar capacity by 14 aud mwh the daily merit order effect is lower we show that the wind merit order effect has been increasing as a function of dispatched wind capacity over time despite of this wholesale electricity prices in australia have been increasing predominantly driven by the increase in natural gas prices our findings further strengthen the evidence of the merit order effect of renewable energy sources with important implications for the current energy policy debate in australia

a public choice view on the climate and energy policy mix in the eu how do the emissions trading scheme and support for renewable energies interact abstract in this paper we analyze the rationale for an energy policy mix when the european emissions trading scheme ets is considered from a public choice perspective that is we argue that the economic textbook model of the ets implausibly assumes 1 efficient policy design and 2 climate protection as the single objective of policy intervention contrary to these assumptions we propose that the ets originates from a political bargaining game within a context of multiple policy objectives in particular the emissions cap is negotiated between regulators and emitters with the emitters abatement costs as crucial bargaining variable this public choice view yields striking implications for an optimal policy mix comprising res supporting policies whereas the textbook model implies that the ets alone provides sufficient climate protection our analysis suggests that support for renewable energies 1 contributes to a more effective ets design and 2 may even increase the overall efficiency of climate and energy policy if other externalities and policy objectives besides climate protection are considered thus our analysis also shows that a public choice view not necessarily entails negative evaluations concerning efficiency and effectiveness of a policy mix

examining the financial performance of micro generation wind projects and the subsidy effect of feed in tariffs for urban locations in the united kingdom abstract this paper seeks to evaluate the effect of the upcoming 2010 uk feed in tariff uk fit on decentralised small wind energy installations at the household and building level in urban locations it is projected that the uk fit will stimulate an unprecedented surge in building mounted turbine installation the tariff amount must stimulate incentive but mitigate the likelihood of distortions in the competitive electricity market to analyse these issues measured energy output from sites in the warwick wind trials project wwtp is converted into revenue in a net present value npv framework for assessing commercial purchases of small wind systems variances in project variables are examined through npv simulations using monte carlo analysis to capture permutations of small wind project performance in the uk with and without the uk fit our research concludes that the proposed tariff amount of 30 5 p kwh will not significantly boost the economic attractiveness of mildly selective wwtp based sites in the uk furthermore the fixed tariff rate kwh generated could cause inefficiencies applied across uneven wind resource distribution the results of this study suggest further examination of policy related to micro generation in particular decentralised small wind projects

sequential bargaining with incomplete information this paper describes a simple two person two period bargaining game and solves it using the concept of perfect bayesian equilibrium in which the actions of each player convey information which is used by his opponent the paper examines the effects of changes in bargaining costs the size of the contract zone and the length of the bargaining process on such aspects of the solution as the probability of impasse and the likelihood of concessions the combination of information transfer and the lack of pre commitment embodied in perfectness yields many surprising results common perceptions about the effects of parameter changes on bargaining processes are suspect and should be checked in the particular game being discussed

some challenges related to introducing tradable green certificates abstract denmark is about to implement a tradable green certificate tgc system this paper presents and discusses some of the obstacles related to using tgcs as a part of the energy policy the most prominent obstacles are related to managing the coexistence of multiple types of res e suppliers with just one policy instrument the first problem considered relates to the creation of incentives for new res e deployment the second problem relates to unfortunate mixes of res e sources the final problem discussed relates to the problem of production overflow