individual taxpayer response to tax cuts 1982 1984 with implications for the revenue maximizing tax rate abstract this paper measures the response of taxpayers to the u s personal rate reductions from 1982 to 1984 a baseline income distribution is created to describe what level and distribution could be expected in the absence of tax changes comparison of this baseline with actual tax return data shows that at least one sixth and probably one quarter of the revenue ascribable to the rate reductions was recouped by changes in taxpayer behavior the data also show that federal income tax revenue would have been maximized at a tax rate of about 35 percent and total income tax revenue maximized at a total tax rate of about 40 percent

understanding heterogeneous preferences in random utility models a latent class approach a finite mixture approach toconditional logit models is developed in whichlatent classes are used to promoteunderstanding of systematic heterogeneity the model is applied to wilderness recreationin which a branded choice experiment involvingchoice of one park from a demand system wasadministered to a sample of recreationists the basis of membership in the classes orsegments in the sample involved attitudinalmeasures of motivations for taking a trip aswell as their stated preferences overwilderness park attributes the econometricanalysis suggested that four classes of peopleexist in the sample using the model toexamine welfare measures of some hypotheticalpolicy changes identified markedly differentwelfare effects than the standard singlesegment model and provided insight into thedifferential impact of alternative policies

measuring the financial impact of demand response for electricity retailers abstract due to the integration of intermittent resources of power generation such as wind and solar the amount of supplied electricity will exhibit unprecedented fluctuations electricity retailers can partially meet the challenge of matching demand and volatile supply by shifting power demand according to the fluctuating supply side the necessary technology infrastructure such as advanced metering infrastructures for this so called demand response dr has advanced however little is known about the economic dimension and further effort is strongly needed to realistically quantify the financial impact to succeed in this goal we derive an optimization problem that minimizes procurement costs of an electricity retailer in order to control demand response usage the evaluation with historic data shows that cost volatility can be reduced by 7 74 peak costs drop by 14 35 and expenditures of retailers can be significantly decreased by 3 52

evaluating the impacts of real time pricing on the usage of wind generation one of the impediments to large scale use of wind generation within power systems is its nondispatchability and variable and uncertain real time availability operating constraints on conventional generators such as minimum generation points forbidden zones and ramping limits as well as system constraints such as power flow limits and ancillary service requirements may force a system operator to curtail wind generation in order to ensure feasibility furthermore the pattern of wind availability and electricity demand may not allow wind generation to be fully utilized in all hours one solution to these issues which could reduce these inflexibilities is the use of real time pricing rtp tariffs which can both smooth out the diurnal load pattern in order to reduce the impact of binding unit operating and system constraints on wind utilization and allow demand to increase in response to the availability of costless wind generation we use and analyze a detailed unit commitment model of the texas power system with different estimates of demand elasticities to demonstrate the potential increases in wind generation from implementing rtp

nonparametric estimation of sample selection models sample selection models provide an important way of accounting for economic decisions that combine discrete and continuous choices and of correcting for nonrandom sampling nonparametric estimators for these models are developed in this paper these can be used for estimating shapes and important economic quantities as in standard nonparametnc regression endogeneity of regressors of interest is allowed for series estimators for these models are developed which are useful for imposing additivity restnctions that arise from selection corrections convergence rates and asymptotic normality results are derived an application to returns to schooling among australian young females is given

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

stochastic modelling of renewable energy sources from operators point of view a survey abstract high penetration of renewable energy sources especially weather dependent sources has increased the power systems uncertainties for any analysis in power systems such as planning and operation it is essential to confront the stochastic nature of these sources in order to get much more precise results since operators need proper strategies and methods to decline negative effects of the stochastic behaviour of renewable power generators such as total operation cost growth this paper provides a review of different state of the art approaches from the operator s viewpoint for handling the stochastic behaviour of renewable sources hence in this paper three different strategies are categorized for stochastic analysis of these sources the first strategy is mathematical modelling including stochastic dependency and independency multi dimensional dependence forecast and scenarios afterwards demand side management which is one of the other approaches for dealing with these uncertainties is investigated and different demand response programs and some methods to model them are presented finally the effect of different electricity market schemes and relevant optimization methods to mitigate the variations of renewable energy sources are discussed the study demonstrates that an operator should choose one or a combination of these three approaches based on its requirements

demand response with locational dynamic pricing to support the integration of renewables abstract electricity production from centralised and decentralised renewable energy resources in europe is gaining significance resulting in operational challenges in the electricity system although these challenges add to the locational and time dependency of the underlying cost of operating the system this variability in time and location is not reflected in residential tariff schemes consequently residential users are not incentivised to react to varying system conditions and to help the integration of renewable energy resources therefore this paper provides a theoretical framework for designing a locational dynamic pricing scheme this can be used to assess existing tariff structures for consumption and injection and can serve as a theoretical background for developing new tariff schemes starting from the underlying costs this paper shows that the potential for locational dynamic pricing depends on the locational and time dependency of its cost drivers when converting costs into tariffs the tariff design should be determined this includes the advance notice of sending tariffs to users and the length of price blocks and price patterns this tariff design should find a balance between tariff principles related to costs practicality and social acceptability on the one hand and the resulting demand response incentive on the other

the estimation of wage gains and welfare gains in self selection models the authors modify the basic self sele ction model for the effects ofeducation training unions and other activities on wages by including heterogeneity of rewards to the activity i e diffe rences across individuals in the rate of return to the activity the authors sho w that such heterogeneity creates a new form of selectionbias they provide tes ts for its presence and draw out its implications for the wage and welfare gains to the activity an empirical application provides strong support for such hete rogeneityin one particular training program copyright 1987 by mit press

what aspects of formality do workers value evidence from a choice experiment in bangladesh this study uses a choice experiment among 2 000 workers in bangladesh to elicit willingness to pay wtp for job attributes a contract termination notice working hours paid leave and a pension fund using a stated preference method allows calculation of wtp for benefits in this setting despite the lack of data on worker transitions and the fact that many workers are self employed which makes it difficult to use revealed preference methods workers highly value job stability the average worker would be willing to forego a 27 percent increase in income to obtain a 1 year contract relative to no contract or to forego a 12 percent increase to obtain thirty days of termination notice there is substantial heterogeneity in wtp by type of employment and gender women value shorter working hours more than men while government workers place a higher value on contracts than do private sector employees

replenishment decisions under an all units discount schedule and stepwise freight costs in this study we analyze the replenishment decisions under a general replenishment cost structure that includes stepwise freight costs and all units quantity discounts we first formulate a general model that accounts for a larger class of problems and prove several useful properties of the expected profit function we later utilize these properties to develop a computational solution approach to find the optimal order quantity as an application of the general results we study the replenishment decisions in the single period i e the newsboy problem considering several scenarios that model the cost considerations either for the buyer or for both the buyer and the vendor

portfolio and contract design for demand response resources abstract electricity generation from renewable energy sources has seen significant growth in recent years to improve grid integration of these volatile energy resources demand side flexibility can be operationalized through intelligent scheduling of flexible electrical loads prior research has mainly focused on determining dispatch schedules for exogenously given portfolios of flexible electricity demand we expand on this literature by considering both contracting and dispatch of flexible loads to this end we formulate a demand aggregator s problem of designing and dispatching a portfolio of supply volatile renewable and conventional generators and demand inflexible base shiftable and curtailable load assets as a stochastic program to account for different contracting regimes we consider three market scenarios 1 a liquid flexibility market where the energy retailer is a price taker 2 an opaque market where non strategic customers will accept any individually rational contract offer and 3 a bi level model with strategic customers optimally self selecting into available contracts in the last case we also explore the effect of price discrimination versus uniform pricing we evaluate these models using empirical load and generation data contrary to conventional wisdom we find that flexibility contracting is not monotone increasing in renewable generation capacities our research also suggests that curtailable load is a closer substitute to supply flexibility than shiftable load finally we find that contracting of curtailing flexibility will be harder to implement if the aggregator has limited market power

do women prefer women s work a new methodology is implemented to determine whether job characteristics can explain why women are concentrated in low paying female dominated occupations extensive information on jobs and labour market histories are collected from the 1982 national longitudinal survey youth cohort for women and men characterized by substantial labour market attachment significant differences in nonpecuniary job characteristics between the male and female samples are found to exist nevertheless we find no evidence that women differentially favour those job characteristics commonly associated with women s work

optimal strategy for an integrated system with variable production rate when the freight rate and trade credit are both linked to the order quantity abstract this paper presents an integrated inventory model with variable production rate and price sensitive demand rate the buyer s purchases trade credit linked to the order quantity offered by the supplier in addition the buyer pays the freight charge according to a weight schedule this paper attempts to offer a best policy that aims at maximizing the joint total profit while the trade credit and freight rate are simultaneously linked to the order quantity the same policy also incorporates considerations on the optimal retail price order quantity and delivery decision we provide possible solutions for the buyer and the supplier to collaboratively agree on inventory control warehouse management transportation logistics delivery and billing our study demonstrates that significant profit increase for the entire supply chain can be achieved by linking both trade credit policy and freight rate policy to order quantities an algorithm is furnished to determine the optimal solution in addition numerical examples and sensitivity analysis are presented to illustrate the theoretical results

local matching of flexible load in smart grids abstract today s power systems are experiencing a transition from primarily fossil fuel based generation toward greater shares of renewable energy sources it becomes increasingly costly to manage the resulting uncertainty and variability in power system operations solely through flexible generation assets incorporating demand side flexibility through appropriately designed incentive structures can add an additional lever to balance demand and supply based on a supply model using empirical wind generation data and a discrete model of flexible demand with temporal constraints we design and evaluate a local online market mechanism for matching flexible load and uncertain supply under this mechanism truthful reporting of flexibility is a dominant strategy for consumers reducing payments and increasing the likelihood of allocation suppliers during periods of scarce supply benefit from elevated critical value payments as a result of flexibility induced competition on the demand side we find that for a wide range of the key parameters supply capacity flexibility level the cost of ensuring incentive compatibility in a smart grid market relative to the welfare optimal matching is relatively small this suggests that local matching of demand and supply can be organized in a decentral manner in the presence of a sufficiently flexible demand side extending the stylized demand model to include complementary demand structures we demonstrate that decentral matching induces only minor efficiency losses if demand is sufficiently flexible furthermore by accounting for physical grid limitations we show that flexibility and grid capacity exhibit complementary characteristics

real options approach to renewable energy investments in mongolia developing nations are seeking alternative energy for electricity and one attractive alternative is renewable energy this research analyzes changing investment environment for renewable energy with real options approach and explores its potential in developing economies through studying the case of mongolia under coal price uncertainty to evaluate comparative attractiveness of either continuing to use coal based infrastructures or switching to renewable energy we formulate social revenue functions for the two environments assuming that renewable energy has lower external costs and coal prices follow geometric brownian motion gbm or geometric mean reverting gmr processes we find the optimal trigger coal prices for switching technologies with some scenarios in electricity price and externality characterize when renewable energy investments become attractive in contrast to conventional wisdom we identify some situations where the value of having more decision opportunities does not exceed that of a now or never decision for switching technologies and welfare losses are incurred the optimal trigger prices are higher in gbm than in gmr and our result raises the possible risks for waiting to switch energy to avoid welfare losses in mongolia the government should increase electricity prices or switch to renewable energy earlier especially when people pay more for the removal of externalities

the influence of distributed generation penetration levels on energy markets planning of national energy policies brings new dilemmas with the introduction of distributed generators dg economic theory suggests that a perfectly competitive market would lead to efficient pricing in the absence of competition regulators play a fundamental role in attracting reasonably priced finance in order to maintain refurbish and increase the infrastructure and provide services at a reasonable cost energy market price equilibrium is mainly dependent on suppliers generators energy sources and demand represented by conventional utility grid users its behavior is similar to that of other commodities as generation becomes less centralized with the increasing economic viability of renewable energy sources new suppliers are being connected to the grid such evolution means the transition from a monopolistic market to a broader and more open environment with an increasing number of competitors we make use of variational inequalities to model a hypothetical dg market in different scenarios from monopoly to oligopoly to open market such an approach enables different equilibrium outcomes due to different dg penetration levels based on these findings we argue that energy policies for such markets must be developed according to each specific stage of the grid s lifecycle we show how energy policies and market regulations may affect such a transition which may be catastrophic if not managed properly and which is dependent on the energy mix

non renewable and intermittent renewable energy sources friends and foes abstract this paper studies the links between non renewable and intermittent renewable energy sources in the production of electricity using u s state level data from 1998 to 2015 we find that the relationship between the price of natural gas and investments in solar and wind capacity is non linear and can be represented by an inverted u shape hence for relatively low natural gas prices the two modes of production are substitutes after a price threshold is reached the two are complementary a theoretical explanation argues that this stylized fact is the result of a trade off between two characteristics of these modes of production the high degree of flexibility of electricity production using natural gas as an input and the low marginal cost of renewable energy sources

wage dispersion and search behavior the importance of non wage job values we use a rich new body of data on the experiences of unemployed job seekers to determine the sources of wage dispersion and to create a search model consistent with the acceptance decisions the job

hedonic wages and labor market search this article investigates the consequences of labor market search for the theory of hedonic wages we find that the introduction of search has surprising consequences for the theory of hedonic wages in particular we demonstrate that the equilibrium distribution of wage and nonwage amenity bundles generally bears little resemblance to workers underlying preferences a consequence of this analysis is that estimates of workers marginal willingness to pay derived from the conventional hedonic wage methodology are biased in addition we demonstrate that search generates differences between firm level and employee level data that can cause substantial deviations in the estimates of hedonic wage equations

market impacts of energy storage in a transmission constrained power system environmental concerns have motivated governments in the european union and elsewhere to set ambitious targets for generation from renewable energy re technologies and to offer subsidies for their adoption along with priority grid access however because re technologies like solar and wind power are intermittent their penetration places greater strain on existing conventional power plants that need to ramp up more often in turn energy storage technologies e g pumped hydro storage or compressed air storage are proposed to offset the intermittency of re technologies and to facilitate their integration into the grid we assess the economic and environmental consequences of storage via a complementarity model of a stylized western european power system with market power representation of the transmission grid and uncertainty in re output although storage helps to reduce congestion and ramping costs it may actually increase greenhouse gas emissions from conventional power plants in a perfectly competitive setting conversely strategic use of storage by producers renders it less effective at curbing both congestion and ramping costs while having no net overall impact on emissions

efficient pricing and investment in electricity markets with intermittent resources facing growing technological and environmental challenges the electricity industry needs effective pricing mechanism to promote efficient risk management and investment decisions in a restructured electricity market with competitive wholesale prices and traditionally regulated retail rates however there are technical and institutional barriers that prevent dynamic pricing with price responsive demand in regions with limited energy storage capacity intermittent renewable resources present special challenges this could adversely affect the effectiveness of public policies causing inefficient investments in energy technologies in this paper we present an updated economic model of pricing and investment in restructured electricity market and use the model in a simulation study for an initial assessment of renewable energy strategy and alternative pricing mechanisms a key objective of the study is to shed light on the policy issues so that effective decisions can be made to improve efficiency

scenario reduction for futures market trading in electricity markets to make informed decisions in futures markets of electric energy stochastic programming models are commonly used such models treat stochastic processes via a set of scenarios which are plausible realizations throughout the decision making horizon of the stochastic processes the number of scenarios needed to accurately represent the uncertainty involved is generally large which may render the associated stochastic programming problem intractable hence scenario reduction techniques are needed to trim down the number of scenarios while keeping most of the stochastic information embedded in such scenarios this paper proposes a novel scenario reduction procedure that advantageously compares with existing ones for electricity market problems tackled via two stage stochastic programming

electricity time of use tariff with consumer behavior consideration abstract this paper investigates an electricity time of use tou tariff problem with the consideration of consumer behavior under the tou tariff we consider two periods the peak and base periods a two level model is established to solve the tou tariff problem in the upper level the producer determines the tou tariff with the consideration of consumer behavior in the lower level the consumers respond to the tou tariff through shifting some electricity consumption in the peak period to the base period using the traditional flat rate fr tariff as a baseline we verify the conditions under which the producer has incentives to adopt the tou tariff with the adoption of a general consumer transfer cost we solve for the optimal tou tariff under different situations our results demonstrate that proper adoption of the tou tariff can create a win win situation for both the producer and the consumers the producer can increase its profit and the consumers can save their electricity cost we further evaluate the effectiveness of the tou tariff in terms of the peak demand reduction using a quadratic transfer cost we obtain some managerial insights into the tou tariff problem and illustrate that the tou tariff is always beneficial to the producer and the consumers under the quadratic transfer cost

education choices in mexico using a structural model and a randomized experiment to evaluate progresa in this paper we evaluate the effect of a large welfare program in rural mexico for such a purpose we use an evaluation sample that includes a number of villages where the program was not implemented for evaluation purposes we estimate a structural model of education choices and argue that without such a framework it is impossible to evaluate the effect of the program and especially possible changes to its structure we also argue that the randomized component of the data allows us to identify a more flexible model that is better suited to evaluate the program we find that the program has a positive effect on the enrollment of children especially after primary school we also find that an approximately revenue neutral change in the program that would increase the grant for secondary school children while eliminating for the primary school children would have a substantially larger effect on enrollment of the latter while having minor effects on the former

the pre programme earnings dip and the determinants of participation in a social programme implications for simple programme evaluation strategies the key to estimating the impact of a programme is constructing the counterfactual outcome representing what would have happened in its absence this problem becomes more complicated when agents such as individuals firms or local governments self select into the programme rather than being exogenously assigned to it this paper uses data from a major social experiment to identify what would have happened to the earnings of self selected participants in a job training programme had they not participated in it we investigate the implications of these earnings patterns for the validity of widely used before after and difference in differences estimators

markets and pricing for interruptible electric power a market is proposed for interruptible or callable forward contracts for electric power in which the consumer grants the power supplier the right to interrupt a given unit of load in return for a price discount the callable forward contracts are traded continuously until the time of use this allows recourse for those customers with uncertain demand while risk averse consumers can minimize their price risk by purchasing early callable forward contracts are simple in form and can be directly incorporated into the utility s economic dispatch procedure

valuing alternative work arrangements abstract we employ a discrete choice experiment in the employment process for a national call center to estimate the willingness to pay distribution for alternative work arrangements relative to tr

an eoq model with noninstantaneous receipt and exponentially deteriorating items under two level trade credit abstract this paper considers the impact of the trade credit policy on the classical economic production quantity epq model for an item subject to exponential decays essentially this study focuses on an exponentially deteriorating item under the conditions of the retailer receiving the supplier trade credit and providing the customer trade credit simultaneously so as to minimize the average total cost a theorem is developed to determine the optimal replenishment policies the main contribution to literature is the inclusion of the latter type of payment delay finally through numerical examples sensitive analysis shows the influence of key model parameters

search and nonwage job characteristics this paper quantifies the importance of nonwage job characteristics to workers by estimating a structural on the job search model the model generalizes the standard search framework by allowing workers to search for jobs based on both wages and job specific nonwage utility flows within the structure of the search model data on accepted wages and wage changes at job transitions identify the importance of nonwage utility through revealed preference the estimates reveal that utility from nonwage job characteristics plays an important role in determining job mobility the value of jobs to workers and the gains from job search

making the most out of programme evaluations and social experiments accounting for heterogeneity in programme impacts the conventional approach to social programme evaluation focuses on estimating mean impacts of programmes yet many interesting questions regarding the political economy of programmes the distribution of programme benefits and the option values conferred on programme participants require knowledge of the distribution of impacts or features of it this paper presents evidence that heterogeneity in response to programmes is empirically important and that classical probability inequalities are not very informative in producing estimates or bounds on the distribution of programme impacts we explore two methods for supplementing the information in these inequalities based on assumptions about participant decision making processes and about the strength in dependence between outcomes in the participation and non participation states dependence is produced as a consequence of rational choice by participants we test for stochastic rationality among programme participants and present and implement methods for estimating the option values of social programmes

stochastic security constrained unit commitment this paper presents a stochastic model for the long term solution of security constrained unit commitment scuc the proposed approach could be used by vertically integrated utilities as well as the isos in electricity markets in this model random disturbances such as outages of generation units and transmission lines as well as load forecasting inaccuracies are modeled as scenario trees using the monte carlo simulation method for dual optimization coupling constraints among scenarios are relaxed and the optimization problem is decomposed into deterministic long term scuc subproblems for each deterministic long term scuc resource constraints represent fuel and emission constraints in the case of vertically integrated utilities and energy constraints in the case of electricity markets lagrangian relaxation is used to decompose subproblems with long term scuc into tractable short term mip based scuc subproblems without resource constraints accordingly penalty prices lagrangian multipliers are signals to coordinate the master problem and small scale subproblems computational requirements for solving scenario based optimization models depend on the number of scenarios in which the objective is to minimize the weighted average generation cost over the entire scenario tree in large scale applications the scenario reduction method is introduced for enhancing a tradeoff between calculation speed and accuracy of long term scuc solution numerical simulations indicate the effectiveness of the proposed approach for solving the stochastic security constrained unit commitment

trading behaviour on the continuous intraday market elbas intraday markets for electricity allow for trading of energy until shortly before the period of delivery this offers market participants a possibility to reduce their expected imbalances and to of

contract durations in the electricity market causal impact of 15 min trading on the epex spot market abstract the european power exchange epex introduced two new products in 2011 and 2014 which reduce the delivery duration of electricity from 1 h to 15 min intervals these changes to the market design aim to better reflect the intermittent power generation from renewable energy sources however little is known about trading in shorter intervals and its impact on the existing market as a remedy our evaluation first shows that the market has quickly adopted the new 15 min contracts second we estimate a bayesian structural time series which measures a causal decrease of electricity prices depending on the model specification our results indicate that the reduction can be as high as 28 for existing hourly contracts subsequent to the introduction of 15 min trading third the use of 15 min contracts coincides with intermittent power generation as it incentivizes renewable energy providers to offer additional electricity altogether our findings suggest that 15 min trading is used to balance the intra hour volatility of renewable energy sources consequently this presents a blueprint for policy makers who can attain similar price reductions and larger feed ins from renewable energy sources without direct costs in all countries with high shares of renewable energy sources

short term electricity trading for system balancing an empirical analysis of the role of intraday trading in balancing germany s electricity system abstract previous studies have noted that unexpectedly germany s dramatic expansion of wind and solar energy coincided with a reduction of short term balancing reserves this observation has been dubbed the german balancing paradox this paper provides further and updated evidence since 2011 wind and solar energy have nearly doubled while both reserve requirements and reserve use have declined by 50 the paper quantitatively explores one reason for reduced balancing needs increased and improved short term wholesale electricity trading on the intraday market trading is now commonly done around the clock and based on quarter hour rather than full hour contracts the shift to quarter hourly products alone explains a decrease in balancing energy by 17 there is also strong evidence that market parties respond efficiently to imbalance charges suggesting that incentive based approaches to electricity balancing work

universal health insurance in the clinton plan coverage as a tax financed public good the financing arrangements embodied in the clinton health reform plan involve some important differences in the way in which public goods are usually financed the subsidies to small low wage firms mandated to provide benefits distort markets in both labor and products and offer incentives for the creation of small firms in addition the financing scheme implicitly envisions a head tax on families at modest income levels but offers a possible rationale for it nevertheless the main reason for many of the financing features appears to be an attempt to hold down the apparent budgetary cost of universal coverage

evaluation of swedish youth labor market programs this paper evaluates two swedish active labour market programmes for youth namely youth practice and labour market training a non parametric matching approach is applied to estimate the average p

impact of electricity pricing policies on renewable energy investments and carbon emissions we investigate the impact of pricing policies i e flat pricing versus peak pricing on the investment levels of a utility firm in two competing energy sources renewable and conventional with a focus on the renewable investment level we consider generation patterns and intermittency of solar and wind energy in relation to the electricity demand throughout a day industry experts generally promote peak pricing policy as it smoothens the demand and reduces inefficiencies in the supply system we find that the same pricing policy may lead to distinct outcomes for different renewable energy sources due to their generation patterns specifically flat pricing leads to a higher investment level for solar energy and it can lead to still more investments in wind energy if a considerable amount of wind energy is generated throughout the day we validate these results by using electricity generation and demand data of the state of texas we also show that flat pricing can lead to substantially lower carbon e

on the efficient market diffusion of intermittent renewable energies abstract capacity costs of renewable energies have been decreasing dramatically and are expected to fall further making them more competitive with fossils building on an analytically tractable peak load pricing model we analyze how intermittency of renewable energies affects the market diffusion that results from these lower costs in particular once renewables have become competitive by attaining the same levelized cost of electricity lcoe as fossils the marginal increase in efficient capacities due to a further cost reduction varies substantially initially it is small then it rises but it falls again once renewable capacities are large enough to satisfy the whole electricity demand at times of high availability if external costs of fossils are internalized by a pigouvian tax then perfect competition leads to efficient investments in renewable and fossil capacities even though we assume that only a subgroup of consumers can adapt their demand to price fluctuations that are caused by the intermittency of renewables moreover fossils receive a capacity payment through the market for their reliability in serving demand of non reactive consumers maximum electricity prices rise with the share of renewables if regulators impose a price cap this initially raises investments in renewables but the effect may reverse if the share of renewables is large

multilevel demand subscription pricing for electric power abstract this paper investigates a general demand subscription pricing policy for electric power service ie a menu of service contracts for assigning different interruption probabilities and prices to different load levels this interruptibility feature is combined with a nonlinear energy price schedule to encourage load flattening we derive a customer value model and a weighted sum objective function for the supplier and consumers for selecting optimal price structures of this type the general form of the optimal price policy is derived and discussed and the implementation methodology is outlined an illustrative example is solved in detail

a dynamic analysis of the market for wide bodied commercial aircraft this paper uses an empirical dynamic oligopoly model of the commercial aircraft industry to analyse industry pricing industry performance and optimal industry policy a novel feature of the model with respect to the previous literature is that entry exit prices and quantities are endogenously determined in markov perfect equilibrium mpe we find that many unusual aspects of the aircraft data such as high concentration and persistent pricing below static marginal cost are explained by this model we also find that the unconstrained mpe is quite efficient from a social perspective providing only 10 less welfare on average than a social planner would obtain finally we provide simulation evidence that an anti trust policy in the form of a concentration restriction would be welfare reducing

preference for the workplace investment in human capital and gender we use a hypothetical choice methodology to estimate preferences for workplace attributes from a sample of high ability undergraduates attending a highly selective university we estimate that women on average have a higher willingness to pay wtp for jobs with greater work flexibility and job stability and men have a higher wtp for jobs with higher earnings growth these job preferences relate to college major choices and to actual job choices reported in a follow up survey four years after graduation the gender differences in preferences explain at least a quarter of the early career gender wage gap

the progressive inefficiency of replacing renewable obligation certificates with contracts for differences in the uk electricity market abstract this paper looks at the emerging risk return profile for new renewable assets as a conventional wholesale electricity market progressively decarbonises using a detailed fundamental model of price formation risks under increasing replacement of fossil fuel facilities with onshore and offshore wind we show that the risk return profile becomes less attractive over time and may therefore need sustained and possibly increasing policy support furthermore we show that green certificate trading may become progressively more attractive as a supplementary support to wholesale prices compared to fixed feed in tariffs this is because the increasingly negative correlation between renewable output and wholesale prices reduces its revenue risk compared to fixed feed in tariffs if other factors remain constant and thereby improves conventional financial performance risk metrics in particular this suggests that the recent energy policy change in britain to move away from green certificates and into contracts for differences may have been ill founded

priority service pricing investment and market organization tingent forward delivery contracts offered by a seller each customer s selection of one contract from the menu determines the customer s service order or priority in each contingency the seller rations supplies by serving customers in order of their selected priorities until the supply is exhausted or all customers are served various forms of priority service are widely

a capacity investment model of wind power with uncertain supply price under high penetration rate abstract with the rapid development of renewable energy the proportion of wind power in power supply has grown significantly also it influences the power price fluctuation since the marginal cost of wind power is almost zero the growth of wind power s penetration rate has led to a crowding out effect and challenged traditional power generation technology substantially reducing the power price in the market in perfect competition market the real time balance between supply and demand of power is regulated by the real time power price fluctuation so this paper models the intermittence of wind power as uncertain supply and develops a capacity investment model under the uncertainties of both supply and demand we introduce priority dispatch elasticity to describe the crowding out effect and take the power price to be endogenous in order to model the situation of high penetration rate we compare the optimal wind power capacity decision under the strategy of priority grid connection and abandoned power management our results show that optimal capacity investment is inversely related to priority dispatch elasticity under both strategies however the profit from power generation is always higher when adopting the abandoned power management strategy

efficient and competitive rationing abstract the contracts that interest us here are called priority service contracts the salient feature of such contracts is that they specify each customer s priority in obtaining service that is they specify the tank order in which a customer is served out of the available supply until all customers are served or supply is exhausted such contracts essentially establish queues for customers in section 1 the author provides some background about priority service section 2 formulates a basic model and offer several illustrations also describes two main examples that motivate the theoretical development section 3 derives some key results that show how the prices of priority service contracts are designed to induce customers to self select efficient service orders in section 4 the author discusses various ways that state enterprises can organize markets that implement priority service efficiently in section 5 we study the operation of competitive markets for priority service section 6 concludes with some summary remarks two themes are emphasized one is that a state enterprise can promote substantial efficiency gains by substituting priority service for absent spot markets the other is that oligopolistic firms may have insufficient incentives to offer efficient product diversity consequently allocative efficiency depends on entry of numerous firms even so dispersal of supplies among many firms can prevent productive efficiency when there are advantages from pooling supplies

economic analysis of transmission expansion planning with price responsive demand and quadratic losses by successive lp the growth of demand response programs and renewable generation is changing the economics of transmission planners and regulators require tools to address the implications of possible technology policy and economic developments for the optimal configuration of transmission grids we propose a model for economic evaluation and optimization of inter regional transmission expansion as well as the optimal response of generators investments to locational incentives that accounts for kirchhoff s laws and three important nonlinearities the first is consumer response to energy prices modeled using elastic demand functions the second is resistance losses the third is the product of line susceptance and flows in the linearized dc load flow model we develop a practical method combining successive linear programming with gauss seidel iteration to co optimize ac and dc transmission and generation capacities in a linearized dc network while considering hundreds of hourly realizations of renewable supply and load we test our approach for a european electricity market model including 33 countries the examples indicate that demand response can be a valuable resource that can significantly affect the economics location and amounts of transmission and generation investments further representing losses and kirchhoff s laws is also important in transmission policy analyses

using choice experiments to value the environment this paper we outline the choice experiment approach to environmental valuation this approach has its roots in lancaster s characteristics theory of value in random utility theory and in experimental design we show how marginal values for the attributes of environmental assets such as forests and rivers can be estimated from pair wise choices as well as the value of the environmental asset as a whole these choice pairs are designed so as to allow efficient statistical estimation of the underlying utility function and to minimise required sample size choice experiments have important advantages over other environmental valuation methods such as contingent valuation and travel cost type models although many design issues remain unresolved applications to environmental issues have so far been relatively limited we illustrate the use of choice experiments with reference to a recent uk study on public preferences for alternative forest landscapes this study allows us to perform a convergent validity test on the choice experiment estimates of willingness to pay

inventory ordering policies of delayed deteriorating items under permissible delay in payments abstract the existing literature on inventory of deteriorating items considers deterioration to begin as soon as the items are stocked however there are several deteriorating items that do not start deteriorating immediately they are held in stock some farm produce like potatoes yams and even some fruits and vegetables have this property depletion of these items as soon as they are stocked will depend on demand and when deterioration begins it will depend on both demand and deterioration in this paper we develop a mathematical model on the inventory of deteriorating items that do not start deteriorating immediately they are stocked the model also takes into cognizance the fact that in business activities nowadays customers are given some allowed period within which to settle for the goods supplied to them they can use the accrued money from sales of the supplied goods to earn interest within the allowed period they are charged interest only when they fail to settle the amount they owe the supplier at the end of the allowed period

alternative approaches to evaluation in empirical microeconomics four alternative but related approaches to empirical evaluation of policy interventions are studied social experiments natural experiments matching methods and instrumental variables in each case the necessary assumptions and the data requirements are considered for estimation of a number of key parameters of interest these key parameters include the average treatment effect the treatment on the treated and the local average treatment effect some issues of implementation and interpretation are discussed drawing on the labour market programme evaluation literature

optimal price discounting and lot sizing policies for perishable items in a supply chain under advance payment scheme and two echelon trade credits abstract many researchers have assumed that a retailer announces price discount to motivate market sales when he has competition in markets unanticipated surplus in inventory or change in the production run of a product but in real life situations there are retailers who announce price discount offer under advance payment ap scheme prior to the selling period due to the advancement of internet and on line money transactions the ap scheme is common and useful to decrease the estimation error in demand and to increase the market sales when the items are arrived to the inventory the priority will be given to the customers who use ap scheme this paper considers a supply chain where the supplier provides the retailer a full trade credit period for payments whereas the retailer offers the partial trade credit to his customers i intend to develop an economic order quantity eoq based model with perishable items in order to investigate the retailer s inventory system as a cost minimization problem under ap scheme and two echelon trade credit option mathematical theorems are developed to determine optimal price discounting and lot sizing policies and a lot of managerial phenomena are obtained through numerical examples

multi product pricing for electric power abstract this paper describes methods for determining the prices for a discrete set of interrelated products offered by a single supplier each product has a fixed marginal rate per unit the demand for each product depends upon the price levels of all the products and the supplier s cost function depends upon the demands for all the products for specific demand function forms methods are described for determining the prices that maximize a weighted sum of net revenue and consumer surplus

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

identifying barriers to large scale integration of variable renewable electricity into the electricity market a literature review of market design abstract for reaching the 2 c climate target the robust growth of electricity generation from variable renewable energy sources vre in the power sector is expected to continue accommodation of the power system to the variable uncertain and locational dependent outputs of vre causes integration costs integrating vre into a well functioning electricity market can minimize integration costs and drive investments in vre and complementary flexible resources however the electricity market in the european union eu as currently designed seems incapable to deliver this end this paper aims to provide a comprehensive literature review of barriers to the large scale market integration of vre in the eu electricity market design based on the set up of the eu electricity market a framework was developed to incorporate the most pertinent market integration barriers and resulting market inefficiencies this paper concludes that an overhaul is needed for the current eu electricity market to address all barriers identified firstly a discrete auction intraday market a marginal pricing balancing market a two price imbalance settlement and a nodal pricing locational marginal pricing mechanism seem more promising in limiting integration costs secondly to support business cases of vre and complementary flexible resources in the electricity market a level playing field should be established and the price cap should be lifted up to the value of lost load voll meanwhile to fit vre s market participation a higher time resolution of trading products and later gate closure time in different submarkets would be required lastly feed in support schemes currently widely used for vre investments might be inconsistent with market integration as they increase integration costs and lock vre investments in a subsidy dependent pathway to avoid such lock in further investigation of alternative capacity based support schemes is recommended

a returns policy for distribution channel coordination of perishable items abstract this paper deals with a retailer s operating policies for a perishable product when he agrees with his supplier not to return the unsold product to his supplier provided that the supplier gives some discount on the wholesale price mathematical formulations are developed based on a periodic review inventory model under lifo and fifo issuing policies the demand rate is assumed to be a function of the retail price and instantaneous inventory level decision variables are the amount of supplier s price discount that the retailer can accept in return for adopting the no returns condition the retail price and order size also numerical examples are solved with tabu search algorithm for sensitivity analysis

incentives to promote solar thermal energy in spain abstract the growth in the use of renewable energies in spain has been remarkable among these energies is solar thermal energy however there are barriers which impede citizens from deciding to install the technologies that use this type of energy in their homes over recent years various measures have been adopted to enhance and promote the use of solar thermal energy these measures have been developed at all administrative levels central regional and local one of the most used measures has been the adoption of legislative regulations that force the use of this type of energy in construction another alternative route is promotion by means of incentives in three aspects tax incentives non refundable grants and favourable lines of finance however the measures applied have been found to be insufficient and alternative stimuli are needed

semiparametric estimation of the intercept of a sample selection model this paper provides a consistent and asymptotically normal estimator for the intercept of a semiparametrically estimated sample selection model the estimator uses a decreasingly small fraction of all observations as the sample size goes to infinity as in heckman 1990 in the semiparametrics literature estimation of the intercept has typically been subsumed in the nonparametric sample selection bias correction term the estimation of the intercept however is important from an economic perspective for instance it permits one to determine the wage gap between unionized and nonunionized workers decompose the wage differential between different socioeconomic groups e g male female and black white and evaluate the net benefits of a social programme

the value of forecasts quantifying the economic gains of accurate quarter hourly electricity price forecasts abstract we propose a multivariate elastic net regression forecast model for german quarter hourly electricity spot markets while the literature is diverse on day ahead prediction approaches both the intraday continuous and intraday call auction prices have not been studied intensively with a clear focus on predictive power besides electricity price forecasting we check for the impact of early day ahead da exaa prices on intraday forecasts another novelty of this paper is the complementary discussion of economic benefits a precise estimation is worthless if it cannot be utilized we elaborate possible trading decisions based upon our forecasting scheme and analyze their monetary effects we find that even simple electricity trading strategies can lead to substantial economic impact if combined with a decent forecasting technique

economic valuation of reserves in power systems with high penetration of wind power this paper proposes a methodology to determine the required level of spinning and nonspinning reserves in a power system with a high penetration of wind power the computation of the required reserve levels and their costs is achieved through a stochastic programming market clearing model spanning a daily time horizon this model considers the network constraints and takes into account the cost of both the load shedding and the wind spillage the methodology proposed is illustrated using an example and a realistic case study some conclusions are finally drawn

estimating workers marginal willingness to pay for job attributes using duration data this paper develops and applies a method for estimating workers marginal willingess to pay for job attributes when workers job choices are characterized by imperfect information and labor market search as an application this paper analyzes the job durations of white males using data from the national longitudinal survey youth cohort and the dictionary of occupational titles estimates of workers willingness to pay derived from the job duration model are compared with those derived from an hedonic wage model

econometric analysis of 15 minute intraday electricity prices abstract the trading activity in the german intraday electricity market has increased significantly over the last years this is partially due to an increasing share of renewable energy wind and photovoltaic which requires power generators to balance out the forecasting errors in their production we investigate the bidding behaviour in the intraday market by looking at both last prices and continuous bidding in the context of a reduced form econometric analysis a unique data set of 15 minute intraday prices and intraday updated forecasts of wind and photovoltaic has been employed price bids are explained by prior information on renewables forecasts and demand supply market specific exogenous variables we show that intraday prices adjust asymmetrically to both forecasting errors in renewables and to the volume of trades dependent on the threshold variable demand quote which reflects the expected demand covered by the planned traditional capacity in the day ahead market the location of the threshold can be used by market participants to adjust their bids accordingly given the latest updates in the wind and photovoltaic forecasting errors and the forecasts of the control area balances

endogeneity in semiparametric binary response models this paper develops and implements semiparametric methods for estimating binary response binary choice models with continuous endogenous regressors it extends existing results on semiparametric estimation in single index binary response models to the case of endogenous regressors it develops a control function approach to account for endogeneity in triangular and fully simulataneous binary response models the proposed estimation method is applied to estimate the income effect in a labor market participation problem using a large micro data set from the british fes the semiparametric estimator is found to perform well detecting a significant attenuation bias the proposed estimator is contrasted to the corresponding probit and linear probability specifications jel c14 c25 c35 j22

do benefits from dynamic tariffing rise welfare effects of real time retail pricing under carbon taxation and variable renewable electricity supply we analyze the gross welfare gains from real time retail pricing in electricity markets where carbon taxation induces investment in variable renewable technologies applying a stylized numerical electricity market model we find a u shaped association between carbon taxation and gross welfare gains the benefits of introducing real time pricing can accordingly be relatively low at relatively high carbon taxes and vice versa the non monotonous change in welfare gains can be explained by corresponding changes in the inefficiency arising from under consumption during low price periods rather than by changes in wholesale price volatility our results may cast doubt on the efficiency of ongoing roll outs of advanced meters in many electricity markets since net benefits might only materialize at relatively high carbon tax levels and renewable supply shares

the impact of renewables on electricity prices in germany an estimation based on historic spot prices in the years 2011 2013 abstract germany s public opinion and media usually attribute increasing electricity prices to the high share of renewables in the german power system but average electricity prices at the european energy exchange dropped during the last years due to an excess of renewable energy this study uses historic market data in order to quantify the effect of renewables on prices historic demand and supply curves from 2011 to 2013 have been used to reconstruct electricity prices under the assumption that no wind and pv would be available the analysis reveals an astonishingly high increase of market prices up to 5 29 ct kwh due to a lack of non renewable power capacities in 2013 the available conventional capacity would not have been able to cover the demand during 269 hours the estimated maximum deficit of 5 6 gw is in good agreement to data published by the german grid operators the discussion of the origin of this deficit leads to the conclusion that the current situation has not been caused by renewables the liberalization of the european energy market established investment risks that hindered required investment a long time before the renewables boomed

ranking firms using revealed preference this article estimates workers preferences for firms by studying the structure of employer to employer transitions in u s administrative data the article uses a tool from numerical linear algebra to measure the central tendency of worker flows which is closely related to the ranking of firms revealed by workers choices there is evidence for compensating differentials when workers systematically move to lower paying firms in a way that cannot be accounted for by layoffs or differences in recruiting intensity the estimates suggest that compensating differentials account for over half of the firm component of the variance of earnings

are targeted wage subsidies harmful evidence from a wage voucher experiment this paper presents the results of a controlled experiment designed to test the effectiveness of a targeted wage subsidy program such programs are intended to increase the employment of target group workers by offering employers reimbursement for part of those workers wages in the dayton ohio experiment however job seekers given experimental vouchers identifying them to employers as eligible for a generous wage subsidy were significantly less likely to find employment than were job seekers without vouchers the author speculates that the vouchers had a stigmatizing effect and provided a screening device with which employers discriminated against economically disadvantaged workers

an equilibrium model of health insurance provision and wage determination we investigate the effect of employer provided health insurance on job mobility rates and economic welfare using a search matching and bargaining framework in our model health insurance coverage decisions are made in a cooperative manner that recognizes the productivity effects of health insurance as well as its nonpecuniary value to the employee the resulting equilibrium is one in which not all employment matches are covered by health insurance wages at jobs providing health insurance are larger in a stochastic sense than those at jobs without health insurance and workers at jobs with health insurance are less likely to leave those jobs even after conditioning on the wage rate we estimate the model using the 1996 panel of the survey of income and program participation and find that the employer provided health insurance system does not lead to any serious inefficiencies in mobility decisions

joint price and lot size determination under conditions of permissible delay in payments and quantity discounts for freight cost abstract this paper deals with the problem of determining the retailer s optimal price and lot size simultaneously under conditions of permissible delay in payments it is assumed that the ordering cost consists of a fixed set up cost and a freight cost where the freight cost has a quantity discount offered due to the economies of scale the constant price elasticity demand function is adopted which is a decreasing function of retail price investigation of the properties of an optimal solution allows us to develop an algorithm whose validity is illustrated through an example problem

aggregator controlled ev charging in pay as bid reserve markets with strict delivery constraints electric vehicles evs similar to other types of flexible loads can be controlled to provide additional flexibility to power system operators which is needed to transition from primarily fossil fuel based electricity generation to more renewable generation existing electricity markets already provide economic incentives to offer flexibility so called aggregators in charge of controlling ev charging could take advantage of these incentives however random driving behavior and area specific market rules complicate the market participation of ev aggregators in energy and reserve markets the goal of this paper is to investigate the design and performance of a system that would enable ev aggregators to participate in wholesale electricity markets we consider a certain type of market environment which includes an intraday energy market and pay as bid reserve markets that require exact reserve delivery and have long operating intervals we therefore propose a novel approach for concurrent market participation that can deal with these constraints even when faced with highly uncertain reserve activation and ev behavior

decentralized multi period economic dispatch for real time flexible demand management emerging smart grid enabling technologies will allow an unprecedented degree of observability and control at all levels in a power system combined with flexible demand and storage they could allow procuring energy at minimum cost and environmental impact that however presupposes real time coordination of demand of individual households and industries down at the distribution level with generation at the transmission level this is closely related with the balancing market economic dispatch ed problem which currently does not take into account distribution network constraints and flexible demand characteristics still assuming a suitably modified form of that problem was available due to both computational and communications requirements its centralized solution in its full detail would not be tractable while there is currently a wealth of literature dealing with distributed optimization applications in power systems it typically focuses on smaller parts of the overall energy management problem e g transmission area synchronization or electric vehicles management often without considering its full scale or establishing any association with energy market mechanisms the target of this paper is twofold 1 identify a flexible demand and distribution network inclusive formulation for ed and 2 propose a solution method

large scale integration of deferrable demand and renewable energy sources we present a stochastic unit commitment model for assessing the impacts of the large scale integration of renewable energy sources and deferrable demand in power systems in terms of reserve requirements we analyze three demand response paradigms for assessing the benefits of demand flexibility the centralized co optimization of generation and demand by the system operator demand bids and the coupling of renewable resources with deferrable loads we motivate coupling as an alternative for overcoming the drawbacks of the two alternative demand response options and we present a dynamic programming algorithm for coordinating deferrable demand with renewable supply we present simulation results for a model of the western electricity coordinating council

transition pathways for a uk low carbon electricity future abstract achieving long term targets for greenhouse gas emissions reductions such as the uk s legally binding target of reducing its emissions by 80 by 2050 will require a transition in systems for meeting and shaping energy service demands involving radical substitution to low carbon supply technologies and improvements in end use energy efficiency this paper describes the development and high level analysis of a set of transition pathways to a uk low carbon electricity system explaining key features of the core pathways developed and the distinctiveness and value of the approach the pathways use an action space concept to explore the dynamic interactions between choices made by actors which are influenced by the competing governance framings or logics that different actors pursue the paper sets out three core transition pathways market rules central co ordination and thousand flowers in which market government and civil society logics respectively dominate it summarises the key technological and institutional changes in these pathways and the roles of actors in bringing these about this leads to an identification of the key risks to the realisation of each of the pathways and of the challenges for individuals businesses social movements and policy makers in taking action to bring them about and sustain them

the pervasive absence of compensating differentials we study the relation between individual preferences for job amenities e g type of work job security and compensating wage differentials in cross section to this end we estimate a partial equilibrium job search model on panel data from eight european countries there are five non wage job characteristics and two sources of job to job mobility on the job search and reallocation shocks we also allow for two types of unobserved heterogeneity we find strong preferences for amenities especially job security yet these preferences do not translate into significant wage differentials in cross section counterfactual experiments show that one would need extremely low levels of search frictions for compensating differentials to arise lastly a similar exercise on the distribution of job change outcomes reveals the role of constrained job to job mobility in the absence of compensating wage differentials copyright 2009 john wiley sons ltd

supporting the externality of intermittency in policies for renewable energy abstract we analyse the joint problem of supporting renewables and resource adequacy in a liberalised electricity market and present a detailed model based comparison of two alternative policies we undertake this in the context of the british market we show how ceteris paribus the progressive replacement of coal with wind imposes extra costs of reserve and evaluate alternative way to meet this whether through capacity payments funded by customers or a reliability requirement on wind generators with capital cost or energy feed in subsidies we consider the reality of market concentration and the extent to which pragmatic regulation could allow prices to rise above marginal cost to reduce the extent of direct subsidies and complex market designs we also evaluate the implied cost of carbon reduction in a progressive replacement of coal with wind when the security is maintained by extra peaking gas we find that support through capital allowances rather than the energy market is more efficient

how market design shapes the spatial distribution of power plant curtailment costs abstract when multiple power plants are curtailed at the same time and in the same region electricity system costs rise if transmission lines are congested these costs might be amplified and spatially more concentrated because there are less spatial spill overs we study how such costs and their distribution depend on the market design nodal pricing or uniform pricing we extend the literature on curtailment by considering space and market design and the literature on market design by considering curtailment we expose a dc load flow model for germany to severe correlated curtailment scenarios we find that additional costs are moderate for the simulated week curtailment of 9 3 non renewable capacity reduces welfare by 2 7 uniform pricing with nodal pricing welfare loss can be reduced by 1 5 distributional differences are multiple times larger for nodal pricing producer surplus rises more and costs are spatially more concentrated at the curtailed power plants consumer surplus becomes lower the difference is unlikely to justify changes of the current market design if also wind or photovoltaic feed in is unavailable economic impacts can decrease or increase but remain in the same order of magnitude the spatial electricity system structure matters more than the volume of curtailment

evaluation of market rules using a multi agent system method the california energy crisis in 2000 2001 showed what could happen to an electricity market if it did not go through a comprehensive and rigorous testing before its implementation due to the complexity of the market structure strategic interaction between the participants and the underlying physics it is difficult to fully evaluate the implications of potential changes to market rules this paper presents a flexible and integrative method to assess market designs through agent based modeling realistic simulation scenarios are constructed for evaluation of the proposed pjm like market power mitigation rules of the california electricity market simulation results show that in the absence of market power mitigation generation company genco agents facilitated by q learning are able to exploit the market flaws and make significantly higher profits relative to the competitive benchmark the incorporation of pjm like local market power mitigation rules is shown to be effective in suppressing the exercise of market power