allocation of fixed transmission cost to wheeling transactions by cooperative game theory this paper describes a methodology to allocate the cost of transmission network facilities to wheeling transactions in decentralized power systems the authors propose that the responsibility placed on transmission facilities involved in each transaction be according to the transmission usage pattern their proposal incorporates the mw mile method and considers economies of scale of transmission network facilities they also incorporate a nucleolus scheme in the cooperative game theory to deal with matters of conflict the applicability of their method is demonstrated in a numerical example

applying behavioral economics to public policy in canada behavioural economics incorporates ideas from psychology sociology and neuroscience to better predict how individuals make long term decisions often the ideas adopted include present or inattention bias both potentially leading to suboptimal outcomes but these models also point to opportunities for effective low cost government policies that can have meaningful positive effects on people s long term well being the last decade has been marked by a growing interest from governments the world over in using behavioural economics to inform policy decisions this is true of canada as well in this paper we discuss the increasingly important role behavioural economics plays in canadian public policy we first contextualize government policies that have incorporated insights from behavioural economics by outlining a collection of models of intertemporal choice we then present examples of public policy initiatives that are based upon findings in the field placing particular emphasis on canadian initiatives we also document future opportunities challenges and limitations

transmission system management and pricing new paradigms and international comparisons the transmission system once the necessary but nearly invisible component of the electric power system is now the focus of physical electrical and financial attention of the utility and more significantly their potential suppliers customers this paper has three primary objectives the first is to present a discussion of a new paradigm for the electric power industry the second is to review transmission pricing options specifically those utilizing either long run lrmc or short run srmc marginal cost based approaches the third is to provide a review of innovative approaches to transmission asset management and finance as seen from international experience

transmission cost allocation by cooperative games and coalition formation the allocation of costs of a transmission system to its users is still a pending problem in many electric sector market regulations this paper contributes with a new allocation method among the electric market participants both cooperation and competition are defined as the leading principles to fair solutions and efficient cost allocation the method is based mainly on the responsibility of the agents in the physical and economic use of the network their rational behavior the formation of coalitions and cooperative game theory resolution mechanisms the designed method is applicable to existing networks or to their expansion simulations are made with sample networks results conclude that adequate solutions are possible in a decentralized environment with open access to networks comparisons with traditional allocation systems are shown and cooperative game solutions compare better in economic and physical terms

the role of application assistance and information in college decisions results from the h r block fafsa experiment growing concerns about low awareness and take up rates for government support programs like college financial aid have spurred calls to simplify the application process and enhance visibility we present results from a randomized field experiment in which low income individuals receiving tax preparation help were also offered immediate assistance and a streamlined process to complete the free application for federal student aid fafsa for themselves or their children treated participants were also provided with aid estimates that were compared against tuition cost amounts for nearby colleges the combined assistance and information treatment substantially increased fafsa submissions and ultimately the likelihood of college attendance persistence and aid receipt in particular high school seniors whose parents received the treatment were 8 percentage points more likely to have completed two years of college going from 28 to 36 during the first three years following the experiment families who received aid information but no assistance with the fafsa did not experience improved outcomes the findings suggest many other opportunities for using personal assistance to increase participation in programs that require filling out forms to become eligible jel codes i2 h4 j24 copyright 2012 oxford university press

a static deterministic linear peak load pricing model for the electricity industry application to the peruvian case abstract this article presents a static deterministic linear peak load pricing model which finds the optimal mix of generation technologies for a given duration curve the main contribution of the article is the idea of discretizing the duration curve since any real duration curve can be approximated by a discretized one the optimal capacity mix for real world situation can be derived using a linear programming software then for the model with the discretized duration curve we derive the centralized optimal solution also we show that applying marginal cost pricing allows for the recovery of all generation costs when the mix of technologies is optimal finally we present an application of the proposed model to the peruvian case we comment and compare the results with the real capacity mix of the system for the years 2008 2013

marginal pricing and supplement cost allocation in transmission open access the application of marginal costing to transmission pricing in open access schemes requires the collection of a supplement to finance the transmission systems the paper describes the application of marginal cost based pricing in the chilean power system and the difficulties faced in allocating the supplement among parties involved alternative methods for defining the allocation are formulated generalized generation and load distribution factors for cost allocation are formulated and implemented the methods are applied to allocate payments for transmission services provided by the transmission network and by a distribution company

coalition formation in transmission expansion planning the study of a decentralized coalition formation scheme in a specific power systems transmission expansion scenario is the purpose of this paper the authors define first who are the agents in the expansion game and provide a decentralized coalition scheme based on bilateral shapley values finally they allocate the total costs of expansion amongst the agents based on the coalition history and they compare their method with a centralized scheme

game theoretical multi agent modelling of coalition formation for multilateral trades in recent years electric utility industries worldwide have been undergoing deregulation to introduce competitiveness in the generation transmission and distribution of electric power the once centralised system planning and operation management must be remodelled to adapt to the new market structure in particular the trading mechanism needs to be totally revised as any party may now get involved in this free market subject to the unavoidable constraints such as generation volumes physical transmission means and days ahead scheduling this paper presents a multi agent model in conjunction with game theory to resolve the coalition formation for multilateral trades the authors have implemented the model using the java language and the jatlite jat0 3 agent development tools developed by stanford university

allocation of firm energy rights among hydro plants an aumann shapley approach the firm energy of generation plants is a critical component in some electricity markets it is usually calculated by the regulator and sets a cap to the amount a plant can trade in capacity markets or auctions in order to avoid free riding behaviors firm energy is a systemic property and in case of hydro plants a synergy is observed whenever a cooperative operation occurs i e the firm energy of a system is greater than the sum of the individual plants this immediately raises the question of how to divide the system s firm energy among the individual hydro plants the objective of this work is to investigate the application of different allocation methods of firm energy rights among hydro plants using a game theoretic framework it is shown that there is not an optimal and unique approach to make this allocation the paper investigates the advantages and disadvantages of different methods such as marginal allocation average production during the critical period incremental allocation finally recommending the aumann shapley as the allocation method this method is tested for the brazilian power system which has around 100 hydro plants the results obtained are compared with the current allocation adopted by the electricity regulatory agency of brazil

spatial peak load pricing this article extends the traditional electricity peak load pricing model to include transmission costs in the context of a two node two technology electric power system where suppliers face inelastic demand we show that when the marginal plant is located at the energy importing center generators located away from that center should pay the marginal capacity transmission cost otherwise consumers should bear this cost through capacity payments since electric power transmission is a natural monopoly marginal cost pricing does not fully cover costs we propose distributing the revenue deficit among users in proportion to the surplus they derive from the service priced at marginal cost

energy prices in the presence of plant indivisibilities in several countries chile bolivia argentina and peru among others power plants are dispatched according to merit order i e based on the marginal operating costs of the plants in this scheme the operating plant with the highest marginal cost sets the spot price at which firms trade the energy required to fulfill their contracts the underlying peak load pricing model assumes that plants can operate at any level up to capacity whereas real power plants have minimum operating levels this implies that a low cost plant might have to reduce its supply in order to accommodate the minimum operating level of a more expensive power plant this paper derives the welfare maximizing price rules in this case and shows that the standard peak load pricing rules no longer apply

a sparsity based model of bounded rationality this article defines and analyzes a sparse max operator which is a less than fully attentive and rational version of the traditional max operator the agent builds as economists do a simplified model of the world which is sparse considering only the variables of first order importance his stylized model and his resulting choices both derive from constrained optimization still the sparse max remains tractable to compute moreover the induced outcomes reflect basic psychological forces governing limited attention the sparse max yields a behavioral version of basic chapters of the microeconomics textbook consumer demand and competitive equilibrium i obtain a behavioral version of marshallian and hicksian demand arrow debreu competitive equilibrium the slutsky matrix the edgeworth box roy s identity and so on the slutsky matrix is no longer symmetric nonsalient prices are associated with anomalously small demand elasticities because the consumer exhibits nominal illusion in the edgeworth box the offer curve is a two dimensional surface rather than a one dimensional curve as a result different aggregate price levels correspond to materially distinct competitive equilibria in a similar spirit to a phillips curve the arrow debreu welfare theorems typically do not hold this framework provides a way to assess which parts of basic microeconomics are robust and which are not to the assumption of perfect maximization jel codes d01 d03 d11 d51

using differences in knowledge across neighborhoods to uncover the impacts of the eitc on earnings we develop a new method of estimating the impacts of tax policies that uses areas with little knowledge about the policy s marginal incentives as counterfactuals for behavior in the absence of the policy we apply this method to characterize the impacts of the earned income tax credit eitc on earnings using administrative tax records covering all eitc eligible lers from 19962009 we begin by developing a proxy for local knowledge about the eitc schedule the degree of sharp bunching at the exact income level that maximizes eitc refunds by individuals who report self employment income the degree of self employed sharp bunching varies signi cantly

price level determinacy with an interest rate policy rule and rational expectations abstract this paper reconsiders a result obtained by sargent and wallace namely that price level indeterminacy obtains in their model if the monetary authorities adopt a feedback rule for the interest rate rather than the money stock it is shown that the indeterminacy vanishes if the interest rate rule is chosen so as to have a desired effect on the expected quantity of money demanded this holds even if considerable weight is given in the choice of a rule to the aim of smoothing interest rate fluctuations

min max fair power flow tracing for transmission system usage cost allocation a large system perspective power flow tracing has been suggested as an approach for evaluating 1 transmission system usage tsu cost and 2 loss mw cost for generator and load entities in the system recently optimal power flow tracing methods have been proposed to explicitly model fairness constraints in the tracing framework this paper further strengthens the tracing compliant min max fair cost allocation approach the min max model proposed in this paper is robust it addresses concerns like scalability numerical stability and termination in a finite number of steps while searching the optimal solution we also propose a methodology to model discoms and gencos as coalition within min max framework case studies on an all india network of 1699 nodes and comparison with average participation and marginal participation methods bring out the better conflict resolution feature of the proposed approach a method to model hvdc lines within the marginal participation scheme is also proposed quantitative and qualitative comparison of various tsu cost allocation methods on such a large system is another noteworthy contribution of the paper

an aumann shapley approach to allocate transmission service cost among network users in electricity markets this work presents a new methodology for the allocation of transmission service cost among network users in energy markets the proposed method is based on an optimization game theoretic framework aumann shapley that retains the desirable properties of other existing methodologies such as the average participations factors apf and long run marginal costs lrmc the approach is shown to be computationally feasible and presents desirable characteristics in terms of economic coherence and isonomy computational results are presented for the brazilian power system and compared with those obtained by three other methodologies lrmc apf and the current method adopted in brazil

price level determinacy and the choice of policy targets under rational expectations abstract we show that in a conventional macro model with rational expectations the government can use monetary policy to peg real interest rates and still attain a determinate price level provided it also pegs some nominal policy variable e g nominal expenditures

behavioral economics and public policy 102 beyond nudging the united states despite its affluence faces a number of daunting policy challenges we rank last among 16 wealthy peers in life expectancy infant mortality and obesity and have taken very little action on climate change despite the extremity of the threat it poses not only to future generations but even those alive today 1

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

marginal pricing of transmission services a comparative analysis of network cost allocation methods a strict marginal network pricing policy is not able to generate enough revenues to recover the cost of the primary transmission service other related network services are ignored here this cost recovery problem requires the stipulation of a complementary charge which completes the network marginal revenues this paper evaluates numerically and qualitatively three different allocation methods of the complementary charge marginal participation factors mean participation factors and benefit factors the evaluation has been applied to the spanish electrical system model

an effective transmission network expansion cost allocation based on game theory the expansion of transmission systems impacts many entities in the market environment each entity may fare better or worse as a result of congestion relief in the presence of new investments negatively affected firms exert their influence to prevent the expansion from taking place the opposition of these firms and the lack of appropriate incentives results in insufficient investments in transmission assets the network is being frequently used at its maximum limits leading to economic inefficiencies and reduced reliability hence there is a need for effective incentive schemes for network expansion in this paper we propose a game theory based scheme for the allocation of transmission expansion costs among market entities the allocation takes into account both the physical and economic impacts of the new transmission assets and the influence of each firm on the expansion decision this is the first scheme designed to give all market participants explicit incentives to support the expansion the application of the allocation solution to the garver six bus system is presented to illustrate the capabilities of the proposed method

definition of an efficient transmission system using cooperative games theory under a context of transmission open access a methodology to define a common transmission trunk system using economic and technical criteria is proposed a transmission trunk system is defined as a unique and common system constituted by electrical lines and substations that are economically efficient and necessary to allow the development of an electrical market and the supply of demand in the respective electrical system at a minimum cost and in an efficient manner the principles of cooperation and interaction between agents that are the base for the cooperative games theory are used simple games and the shapley value approach are used the proposal responds to the need to identify a common main system common to supply and demand agents needed in system open access schemes in electricity markets

decision analysis of merchant transmission investment by perpetual options theory this paper introduces the concept of perpetual options theory to analyze merchant transmission investment through an approved rate since the electric usages and the associated revenue is stochastic in nature applying the perpetual options theory allows an investor to determine the most opportunistic time to start a transmission project and obtain the maximum revenue returns or let the option expire when the economic incentive is not sufficient in today s environment this decision approach is more appropriate since it provides transmission investors a better projection of its return on investment and an exit strategy for an investment decision

on the partition of transmission losses among generators due to the introduction of competition in the electrical power industry determining the percentage of transmission grid losses that should be attributed to each generator has become important usually this is accomplished by determining the percentage of each transmission branch losses that should be attributed to each generator using the aumann shapley theory this letter identifies the fairest way to share the nonseparable portion of losses amongst the generators the obtained result validates some approximations assumed in recent papers and contributes to strengthening circuit theory based methods

global stability and the choice of policy targets under rational expectations abstract it is shown that if the supply of capital is properly incorporated in a macromodel with rational expectations the government cannot peg its expenditures wholly in real terms since otherwise the economy will be globally unstable

optimal defaults and active decisions defaults often have a large influence on consumer decisions we identify an overlooked but practical alternative to defaults requiring individuals to make an explicit choice for themselves we study such active decisions in the context of 401 k saving we find that compelling new hires to make active decisions about 401 k enrollment raises the initial fraction that enroll by 28 percentage points relative to a standard opt in enrollment procedure producing a savings distribution three months after hire that would take 30 months to achieve under standard enrollment we also present a model of 401 k enrollment and derive conditions under which the optimal enrollment regime is automatic enrollment i e default enrollment standard enrollment i e default non enrollment or active decisions i e no default and compulsory choice active decisions are optimal when consumers have a strong propensity to procrastinate and savings preferences are highly heterogeneous financial illiteracy however favors default enrollment over active decision enrollment