strategic behavior in contests comment almost by definition contests involve strategy this is especially true in contests between unevenly matched contenders in a recent article avinash dixit 1987 explored strategic commitment in contests between a favorite and an underdog the favorite is defined as the player whose chance of victory exceeds one half at the nash equilibrium an underdog s chance is less than one half dixit concludes that if the favorite has the opportunity to move first then he will overcommit effort compared with the nash equilibrium an important implication of the favorite overcommitting effort is that strategic behavior leads to greater social costs see gordon tullock 1980 the opposite holds if the underdog has the opportunity to move first this paper demonstrates that the favorite will never overcommit effort given endogenous order of moves the favorite finds it advantageous to wait until the underdog moves surprisingly the underdog s best strategy is not to wait but to make the first move throwing the first punch the equilibrium order of play is for the underdog to move before the favorite in this equilibrium one never observes overcommitment of effort consequently extending dixit s model to allow for endogenous order of moves suggests that strategic behavior in contests will lead to undercommitment compared with nash behavior

keep on fighting the dynamics of head starts in all pay auctions abstract we investigate a model of a series of contests in which a contestant s past and present success gives a head start over a rival in the future how this advantage from winning affects contestants efforts whether the laggard gives up or keeps on fighting and how the head start develops over time are key issues we find that the expected effort of the laggard will always be higher than the rival at some stage in the series of contests and this is most likely to happen when at a large disadvantage or at a late stage in the series

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

wage curve analyses of establishment data from western germany using the iab establishment panel which is representative for western germany the authors find that establishment level wages reacted to variations in the regional unemployment rate the elasticity of wages with respect to unemployment they estimate was about 0 1 this responsiveness of the wage to regional variation is close to estimates found by other researchers using individual rather than establishment data for other countries and contradicts the view that germany s labor market largely due to the nature of collective bargaining in that country is relatively inflexible possible explanations for this finding are that the negotiated wage is treated like a minimum wage with firms deviating from it in order to increase work effort bargaining between firms and individual workers or between firms and works councils produces wage differences or collective agreements do not restrict firms to the extent that is often assumed

the british model in britain failing slowly in 1990 britain reorganised its electricity industry to run on competitive lines the british reforms are widely regarded as successful and the model used provides the basis for reforms of electricity industries worldwide the main reason for this perception of success is major reductions in the real price of electricity with no reduction in service quality this paper examines whether the reputation of the british reforms is justified it concludes that the reputation is not justified and that serious fundamental problems are beginning to emerge the central question is have the british reforms resulted in the creation of efficient wholesale and retail markets on this criterion the reforms have failed the wholesale market is dominated by obscure long term contracts privileged access to the market and self dealing within integrated generator retailers leaving the spot markets with minimal liquidity and unreliable prices the failure to develop an efficient wholesale market places the onus on consumers to impose competitive forces on electricity companies by switching regularly small consumers will not do this and they are paying too much for their power for the future there is a serious risk that the electricity industry will become a weakly regulated oligopoly with a veneer of competition

strategic competition in sequential election contests this paper studies a sequential election contest such as theamerican presidential primary in which several electionsoccur one at a time until a single winner emerges theconventional wisdom is such a system benefits a candidatefavored in the initial elections because of momentum thispaper uncovers a potentially opposing force if participationis costly and candidates exit when they have unfavorablefuture prospects a candidate with friendly elections at theend of the contest will typically benefit from the resultinggame theoretic competition tension between this strategic effect and momentum helpsexplain several empirical regularities of presidentialprimaries

bidding strategies for electricity producers in a competitive electricity marketplace this paper presents a methodology for the development of bidding strategies for electricity producers in a competitive electricity marketplace initially the problem is modeled as a two level optimization problem where at the first level a market participant tries to maximize his expected profit under the constraint that at the second level an independent system operator dispatches power solving an optimal power flow problem that minimizes total system cost it is assumed that each supplier bids a linear supply function and chooses his bidding strategy based on probabilistic estimates of demand and rival behavior monte carlo simulation is used to calculate the expected profit and genetic algorithms are employed to find the optimal strategy subsequently the formulation is expanded to account for different market participants risk profiles it is shown that risk aversion may influence the optimal bidding strategy of an individual

the last word on the wage curve abstract since 1990 there has been extensive international research on the responsiveness of wages of individuals to changing local labour market conditions for many countries an inverse relationship between wages and local unemployment rates has been found in their book the wage curve blanchflower and oswald argued that the unemployment elasticity of pay is around 0 1 in most countries in a 1995 literature survey card referred to this striking empirical regularity as being close to an empirical law of economics nonetheless reported elasticities do vary even excluding outliers between about 0 5 and 0 1 there is also considerable heterogeneity among wage curve studies in terms of data and model specification this paper carries out meta analytic techniques on a sample of 208 elasticities derived from the literature to uncover the reasons for the differences in empirical results across studies several causes of variation are identified there is also clear evidence of downward publication bias in addition many reported t statistics are biased upwards due to the use of aggregate unemployment rates a maximum likelihood method and a trimming procedure are used to correct for these biases both methods give similar results for our sample an unbiased estimate of the wage curve elasticity at the means of study characteristics is about 0 07

how to split the pie optimal rewards in dynamic multi battle competitions abstract multi battle competitions are ubiquitous in real life in this paper we examine the effort maximizing reward design in sequentially played multi battle competitions between two players the organizer has a fixed prize budget and rewards players contingent on the number of battles they win in a three battle contest a full spectrum of contest technologies in the tullock family is accommodated we find that the optimal design varies with the discriminatory power of the contest technology in particular when it is in the low range winner take all is optimal for the intermediate range as discriminatory power increases the optimal prize structure evolves continuously from winner take all to the proportional division rule due to the need to mitigate the growing momentum discouragement effect for the high range a wide span of prize structures extracts full surplus and is thus optimal several robustness checks confirm that mitigating the momentum discouragement effect is essential for effort maximizing prize design in dynamic multi battle contests

an adaptive wavelet neural network based energy price forecasting in electricity markets in a competitive electricity market an accurate forecasting of energy prices is an important activity for all the market participants either for developing bidding strategies or for making investment decisions an adaptive wavelet neural network awnn is proposed in this paper for short term price forecasting stpf in the electricity markets a commonly used mexican hat wavelet has been chosen as the activation function for hidden layer neurons of feed forward neural network ffnn to demonstrate the effectiveness of the proposed approach day ahead prediction of market clearing price mcp of spain market which is a duopoly market with a dominant player and locational marginal price lmp forecasting in pjm electricity market are considered the forecasted results clearly show that awnn has good prediction properties compared to other forecasting techniques such as wavelet arima multi layer perceptron mlp and radial basis function rbf neural networks as well as recently proposed fuzzy neural network fnn

creating balance in dynamic competitions abstract we consider incentives for organizing competitions in multiple rounds focusing on situations where there is heterogeneity among the contestants ex ante which discourages effort in a single contest heterogeneity evolves across rounds depending upon the outcomes of previous rounds we present conditions under which balance in such a competition can be created by determining the number of rounds and dividing the prize fund carefully across them so that full rent dissipation entails in the model each round is an all pay auction where contestants differ in their abilities to gain a momentum from winning we also discuss the case when negative prizes are feasible demonstrating that this strengthens the full dissipation result and we consider a case where the size of the winner s momentum is related to the size of the prize attained showing that the stronger this linkage the less of the prize is awarded early on

racing with uncertainty and strategic interaction between competitors as the race unfolds most of the existing literature examines one or other of these features but not the two combined our aim is to see how the efforts of competitors in a race vary with the intensity of rivalry between them in our principal model whch is of a one dimensional race it is shown that the leader in the race makes greater efforts than the follower and efforts increase as the gap between competitors decreases under certain conditions the same results hold in our second related model which is of a two dimensional race

reconciling the wage curve and the phillips curve the wage curve is the negative relationship that links wage levels to the unemployment rate it fits accurately with modern non competitive labour market models but goes against a phillips curve modelling because the latter ties wage growth to the unemployment rate in this article we present a comprehensive review of these non competitive models highlighting recent contributions that try to eliminate the possible gap that exists between the concepts of the wage curve on the one hand and the phillips curve on the other copyright blackwell publishers ltd 2005

nash equilibrium bidding strategies in a bilateral electricity market this paper examines bidding strategies in a bilateral market in which generating companies submit bids to loads a load accepts electricity delivery from the generator with the lowest bid at its bid price as long as this price is not higher than the load s willingness to pay necessary and sufficient conditions of nash equilibrium ne bidding strategy are derived based on a generic generating cost matrix and the loads willingness to pay vector the study shows that in any ne efficient allocation is achieved furthermore all nash equilibria are revenue equivalent for the generators based on the necessary and sufficient conditions this problem is formulated as an optimal assignment problem network optimization techniques are applied to calculate ne bid prices for the generators

primaries and the new hampshire effect candidates for u s presidential elections are determined through sequential elections in single states the primaries we develop a model in which candidates can influence their winning probability in electoral districts by spending money on campaigning the equilibrium replicates several stylized facts very well campaigning is very intensive in the first district the outcome of the first election then creates an asymmetry in the candidates incentives to campaign in the next district which endogenously increases the equilibrium probability that the first winner wins in further districts on the normative side our model oers a possible explanation for the sequential organization it leads in expectation to a lower level of advertising expenditures than simultaneous elections moreover if one of the candidates is the more eective campaigner sequential elections also perform better with regard to the selection of the best candidate

further evidence on the wage curve in this paper we replicate and extend the wage curve proposed by blanchflower and oswald 1990 our replication only partly confirms their findings our extensions relate to gender effects and to a refinement of the unemployment measure the results show that wage curves for males and females differ for females unemployment both has a wage effect and a discouraged worker effect

a primer on cardinal versus ordinal tournaments i introduction the tournament literature has considered primarily two relative performance evaluation schemes that are consistent with what we observe in practice the rationale behind each of these incentive schemes is that relative performance evaluation is useful when agent performance is subject to common shocks in which case individual performance is not a sufficient statistic for individual effort that is the performance of other agents can enhance the inference of the effort exerted by an individual agent one important difference between these schemes is that under rank order or ordinal tournaments the prizes are prespecified and agents compete for rank by contrast under two part piece rate or cardinal tournaments the total prize is fixed and agents compete for a share of the pie 1 each agent receives a base payment and a bonus depending on the difference of his performance from the average performance of his peers 2 average performance provides an informative signal about the value of common shocks inflicted on agents ordinal tournaments are prevalent in contests where rank is more important than individual performance for instance sports contests where contestants compete for medals or fixed prizes or when individual performance data are not readily available for instance promotion contests where the individual contribution of contestants cannot easily be separated from that of their co workers or subordinates by contrast cardinal tournaments are popular in several occupations or industries where cardinal performance data are readily available e g salesmen contracts physician contracts with hmos and agricultural contracts 3 both ordinal and cardinal tournaments are relatively simple to design even though they are only proxies of theoretically optimal schemes 4 prior literature has contrasted the efficiency properties of either ordinal or cardinal tournaments against those of piece rates under piece rates each agent is evaluated according to his absolute performance thus agents receive a base payment and a bonus which is based typically linearly on their individual output 5 piece rates are sometimes expressed as fixed performance standards when an agent s performance is evaluated against a fixed standard instead of the average output obtained lazear and rosen 1981 green and stokey 1983 and nalebuff and stiglitz 1983 have shown that ordinal tournaments are superior to piece rates when agent activities are subject to common shocks that affect performance 6 more recently marinakis and tsoulouhas 2012 2013 investigated and verified this result for cardinal tournaments relative performance evaluation via tournaments constitutes a pareto superior move by removing common uncertainty from the responsibility of agents and by charging a premium for this insurance the principal increases his profit without hurting the agents moreover by providing this type of insurance tournaments enable the principal to implement higher power incentives than under piece rates what is still an open question in the literature above is a comparison of ordinal to cardinal tournaments the consensus among tournament theorists is that even though ordinal tournaments are informationally wasteful as in holmstrom 1982 by ignoring the agents cardinal performance data if available they are however more general because they are less restrictive on the functional form of the contract i e they are step functions with a linear or non linear trend part of the appeal is that the founders of tournament theory focused on ordinal tournaments nevertheless a significant part of the current tournament literature has analyzed cardinal tournaments instead 7 this paper fills in this gap in theory by developing a framework that can be used to analyze both cardinal and ordinal tournaments as well as piece rates and in doing so it provides a primer on tournaments and piece rates

impacts of network constraints on electricity market equilibrium nash equilibrium is usually used as the solution of generator s strategic bidding in electricity markets the available literature has shown by simulation that multiple market equilibria or no pure equilibrium may be induced after the inclusion of network constraints transmission constraints this paper presents a systematical analysis for the impacts of network constraints on the market equilibrium in oligopolistic electricity markets in our modeling the independent system operator iso dispatches generation and determines nodal prices via solving an optimal power flow opf and the individual generator optimizes its submitted supply function with nash supply function equilibrium sfe strategy after taking into account iso s decision making process on dispatched generations and nodal prices the conditions for the existence of equilibrium are given and it is shown that there may be multiple equilibria or no pure nash equilibrium the equilibrium if it exists will be at a point where generators pay no congestion charge

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

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

evaluating electricity sector reforms in argentina lessons for developing countries abstract in argentina prior to the macroeconomic crisis of early 2002 power sector reforms had proven successful in delivering low electricity tariffs and increasing private investments this had been achieved through the unbundling of electricity supply businesses and the introduction of competition paying due attention to the lessons learned by forerunners in power sector reform including neighbouring chile the reforms that had been implemented in argentina were therefore deemed to have been a success however in the wake of the macroeconomic crisis and the devaluation of the peso generators and gas suppliers found themselves in critical financial straights which caused a halt to additional investment the current challenge facing reforms in the argentine power sector is to rebound from the financial ramifications of peso devaluation and to promote private investment given these basic facts this paper traces the history of reforms in the argentine electricity sector assessing the progress that has been achieved and suggesting lessons for developing countries it is often the case in developing countries that the unbundling of vertically integrated state owned industries into privatised enterprises requires efforts to improve infrastructure as a prerequisite for the introduction of competitive practices bearing this in mind this paper lays out measures that would be useful to consider for electricity sector reforms in developing countries from the following three perspectives 1 transition from a state owned power companies to private enterprises 2 development of conditions required to promote infrastructure projects and 3 development of conditions for the establishment of a healthy and fair competitive environment assuming that liberalisation is achieved once the conditions in 1 and 2 are met

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

disclosure policy in a multi prize all pay auction with stochastic abilities this paper investigates whether a contest organizer should disclose private information about bidders abilities in a multi prize all pay auction bidders abilities are randomly distributed and observed by the contest organizer the organizer decides whether to disclose this information publicly we find that concealing the information elicits higher expected total effort regardless of the distribution of abilities in addition we find that the rent dissipation rate of the contest does not depend on the disclosure policy

team contests with multiple pairwise battles abstract we consider a multi battle team contest in which players from two rival teams form pairwise matches to fight in distinct component battles which are carried out sequentially or partially

are tournaments optimal over piece rates under limited liability for the principal a highly acclaimed result is that tournaments are superior to piece rates when the agents are risk averse and their production activities are subject to a relatively large common shock the reason is that tournaments allow the principal to trade insurance for lower income to the agents our analysis shows that this celebrated result does not carry over to the case when a limited liability bankruptcy constraint limits the payments the principal can make provided that the liquidation value of the firm is sufficiently small this finding has important implications for the vast number of limited liability firms even though limited liability becomes an issue for different ranges of liquidation values under the two schemes tournaments are still superior when the liquidation value of the firm is intermediate or large even though the limited liability constraint is still binding for intermediate values surprisingly uncertainty in the price of output strengthens the need for tournaments by expanding the range of liquidation values over which tournaments are dominant because price uncertainty introduces additional bankruptcy risk these findings provide insight into policy implications in the contracting out of services by state and local governments in procurement in rent seeking contests and in tournaments used by hmos

on the evolution of attitudes towards risk in winner take all games abstract a long standing conjecture is that winner take all games such as patent races lead to the survival of risk takers and the extinction of risk averters in many species a winner take all game determines the males right to reproduce and the same argument suggests that males will evolve to be risk takers psychological and sociological evidence buttresses the argument that males are more risk taking than females using an evolutionary model of preference formation we investigate to what extent evolution leads to risk taking in winner take all environments journal of economic literature classification numbers c7 d8

does active labour market policy increase employment theoretical considerations and some empirical evidence from sweden does active labour market policy increase employment theoretical considerations and some empirical evidence from sweden

endogenous strength in conflicts in this paper we study a two period contest where the strength of players in the second period depends on the result of the contest in the first stage we show that in contrast to one shot contests in the same setting heterogeneous players exert different efforts in the first stage and rent dissipation in the first period may be large we study the conditions under which the discouragement effect holds in addition new issues emerge like the evolution of the strengths and the shares of the prize during the game

bidding of price taker power generators in the deregulated turkish power market abstract in deregulated power markets power firms bid into the day ahead power market either with buy offers or sell offers the auction mechanism and competition determine the equilibrium price and quantity for each hour if the bid price of a company is below the market clearing price then the offer of the company is accepted and rewarded with the market price a company can be a price maker or price taker depending on the capacity it offers to the market a price taker unit must determine the right offer that will maximize their profit given price uncertainty and blind auction rules this paper first examines power supply in the turkish electricity market and bidding process then a marginal cost based monte carlo method is developed to determine hourly and block bidding strategies of price taker units historical market prices are then implemented in a normal distribution to generate hourly price scenarios a solution methodology is developed that maximizes the expected profit of each hourly and block bidding strategy over price scenarios the generator is able to both evaluate the hourly bidding and block bidding strategies and find the best bidding strategy that will be submitted to the market using the proposed methodology the model is illustrated for two coal units in turkish power market and the results are presented

industrial and institutional restructuring of the russian electricity sector status and issues abstract the reform of the russian electricity industry represents one of the largest and most technically complex post soviet era industrial restructurings this paper presents the framework status and perspectives for the russian electricity sector liberalisation uncertainties regarding the effective implementation of the reform are specifically examined ultimately the critical analysis of the reform questions the feasibility and adequacy of the recommended measures in the specific russian context current theories fail to answer a fundamental issue namely how to promote investment in an obsolete electrical infrastructure and more generally whether a pure free market model is compatible with physical constraints posed by the electricity sector a careless deregulation of the russian electricity system could hinder the country s stable and sustainable development as its economy and the population s service have traditionally been closely linked to the electricity industry

generator bidding in oligopolistic electricity markets using optimal control fundamentals and application in this paper optimal control is applied to study generator bidding in an oligopolistic electricity market the repeated bidding process in hourly based real time electricity markets is modeled as a dynamic feedback system an optimal control problem is then formulated to explore individual generator s long term multiperiod optimization behavior particularly in our formulation the periodic property of the system demand is considered several lemmas are included for concerning system stability based on the necessary conditions for optimality from the pontryagin maximum principle a sweeping method is proposed and an optimal state feedback control rule is then obtained via backward induction numerical results suggest that the generator who unilaterally applies optimal control for generation decisions will obtain more profits a sensitivity analysis is also performed identifying these market factors that affect the performance of optimal control

on equilibrium player ordering in dynamic team contests we study equilibrium player ordering in a dynamic all pay contest between two teams the contest lasts two periods and each team consists of two players who perform in different periods on behalf of their teams the team with the higher aggregate output wins the prize which is a public good to its players each team has one stronger player and one weaker player and the two teams can differ in their values of the prize the teams maximize their winning odds by strategically assigning their players to different periods we find that when the intrateam heterogeneity in player ability is not excessive the teams would allocate their stronger players to the late positions as the anchormen when both the intrateam ability gap and interteam heterogeneity in teams values become excessively large the team with high value always places its stronger player in the early position who will place a large bid to preempt late competition jel c7 d7 d8

wage curve evidence from panel data abstract we examine the us wage curve using longitudinal micro data results support the wage curve but are sensitive to inclusion of regional and or personal fixed effects we find that hourly wages are less responsive to local unemployment than annual earnings

forecasting system imbalance volumes in competitive electricity markets forecasting in power systems has been made considerably more complex by the introduction of competitive electricity markets furthermore new variables need to be predicted by various market participants this paper shows how a new methodology that combines classical and data mining techniques can be used to forecast the system imbalance volume a key variable for the system operator in the market of england and wales under the new electricity trading arrangements neta

optimal risk constrained participation of industrial cogeneration systems in the day ahead energy markets abstract this paper presents an optimal bidding strategy for industrial consumers with cogeneration facilities power only and heat only units to participate in day ahead electricity market a information gap decision theory igdt technique is implemented for determining the optimal bidding strategies considering market price uncertainty igdt evaluates the robustness opportunity of optimal bidding strategy under market price uncertainty considering the consumer choice of taking risk averse or risk taking decisions it is confirmed that the risk averse or risk taking decisions might affect the expected profit and bidding curve of the consumers moreover demand response dr program has been implemented in order to serve the power and heat demands of the consumer with minimum cost in the proposed dr program the total power and heat demand of consumer will be supplied without any curtailed load the responsive load can vary in different time intervals in addition it is assumed that the consumer will pay receive for increased reduced consumption which is proportional to the day ahead market price in this paper the heat power dual dependency characteristic in different types of combined heat and power chp units is taken into account and all technical constraints of generation units are satisfied in addition a heat buffer tank with the ability of heat storage is incorporated in the proposed framework the verification of the proposed method is demonstrated using the simulation of a case study

the wage curve a review in the wage qurve david g blancflower and andrew j oswald argue that there is a fundamental negative relation between wages and the unemployment rate in a worker s local labor market blancflower and oswald use large scale micro data sets to estimate this relation for the united states britain and 10 other countries i review their empirical methods and findings and provide some further evidence on the nature of the wage curve relationship in the united states i conclude that there is a strong statistical correlation between rates of pay and local unemployment although the interpretation of this correlation remains unresolved this abstract was borrowed from another version of this item

the economic design of sporting contests what is the optimal number of entrants in a race or the optimal number of teams in a baseball league what is the optimal structure of prizes for a golf tournament or degree of revenue sharing for a football championship how evenly balanced should the competing teams be in the nascar or formula one championships what is the maximum number of entrants per nation to the olympic games that should be permitted what quota of qualifying teams to the soccer world cup should be allocated to the developing nations

the wage curve revisited estimates from a uk panel abstract panel data from the uk are used to estimate a wage curve allowing simultaneously for time individual and spatial effects thereby correcting for grouped and cross classified data bias estimates of the unemployment elasticity of the wage are volatile and imprecise

the role of unemployment in wage determination further evidence on the wage curve from turkey this paper presents an empirical estimation of the correlation between wages and regional unemployment rates in turkey more specifically it explores the role of regional unemployment rates in wage determination the analysis builds upon a series of recent empirical studies on the wage unemployment relationship now commonly known as the wage curve a downward sloping curve in wage unemployment space the existing studies are for most part in advanced market economies while this paper presents one of the few attempts at a wage curve analysis within the context of a developing market economy a cross sectional estimation of micro level individual wage data for the turkish labour market in 1994 suggest a statistically significant negative correlation between wages and regional unemployment rates separate regressions for men and women however show a wage curve to exist only in the male labour market the study also presents the results on other variables of wage determination such as returns to school

job competition and the wage curve longhi s job competition and the wage curve regional studies the wage curve literature consistently finds a negative relationship between regional unemployment rates and regional wages the most widely accepted theoretical explanations interpret the unemployment rate as a measure of job competition this paper proposes new ways of measuring job competition alternative to the unemployment rate and finds that the negative relationship still holds when job competition is measured following the job search literature while for men the wage impact of the theoretically based measures of job competition is rather similar to the wage impact of the unemployment rate for women the difference is substantial longhi s la competition pour l emploi et la courbe des salaires regional studies la documentation sur la courbe des salaires affirme systematiquement que le taux de chomage regional est en correlation faible avec les salaires regionaux les explications theoriques les plus recues considerent le taux de

bidding strategies with fuel supply uncertainty in auctions of long term energy call options this work develops a stochastic optimization model for the creation of a bidding strategy for a generator in an energy call option auction similar to brazil s i e where the bidder can offer both the premium and the strike price the objective of the model is to maximize the bidder s competitiveness while ensuring that the project s target rate of return is achieved with a given probability for example 95 the problem s complexity is compounded by uncertainties in fuel supply and the need to switch between fuels the generators face the conundrum of bidding a single strike price to cover the expenses generated by using multiple types of fuels we address the problem of finding bidding strategies which taking into account uncertainty in fuel supply and risk constraints set the combination of strike price and option premium that ensure a desired risk adjusted return for greenfield dual fuel thermal plants

multi battle contests abstract we study equilibrium in a multistage race in which players compete in a sequence of simultaneous move component contests players may win a prize for winning each component contest as well as a prize for winning the overall race each component contest is an all pay auction with complete information we characterize the unique subgame perfect equilibrium analytically and demonstrate that it exhibits endogenous uncertainty even a large lead by one player does not fully discourage the other player and each feasible state is reached with positive probability in equilibrium pervasiveness expected effort in the component contests may be non monotonic in the closeness of the race and realized individual effort may exceed the value of the prize by a factor that is proportional to the maximum number of stage victories required

german wage curves 1979 1990 abstract this paper presents evidence for a wage curve i e a negative relationship between the wage level and the regional rate of unemployment in germany

information in conflicts abstract we consider two player contests for a prize of common but uncertain value for settings where one player knows the value of the prize while the other only knows its prior distribution we give conditions for when the uninformed agent is ex ante strictly more likely to win the prize than is the informed agent in the special case of a lottery contest equilibrium expenditures are lower under asymmetric information than if either both agents are informed or neither agent is informed

an integrated ant colony optimization approach to compare strategies of clearing market in electricity markets agent based simulation in this paper an innovative model of agent based simulation based on ant colony optimization aco algorithm is proposed in order to compare three available strategies of clearing wholesale electricity markets i e uniform pay as bid and generalized vickrey rules the supply side actors of the power market are modeled as adaptive agents who learn how to bid strategically to optimize their profit through indirect interaction with other actors of the market the proposed model is proper for bidding functions with high number of dimensions and enables modelers to avoid curse of dimensionality as dimension grows test systems are then used to study the behavior of each pricing rule under different degrees of competition and heterogeneity finally the pricing rules are comprehensively compared using different economic criteria such as average cleared price efficiency of allocation and price volatility also principle component analysis pca is used to rank and select the best price rule to the knowledge of the authors this is the first study that uses aco for assessing strategies of wholesale electricity market

improving market clearing price prediction by using a committee machine of neural networks predicting market clearing prices is an important but difficult task and neural networks have been widely used a single neural network however may misrepresent part of the input output data mapping that could have been correctly represented by different networks the use of a committee machine composed of multiple networks can in principle alleviate such a difficulty a major challenge for using a committee machine is to properly combine predictions from multiple networks since the performance of individual networks is input dependent due to mapping misrepresentation this paper presents a new method in which weighting coefficients for combining network predictions are the probabilities that individual networks capture the true input output relationship at that prediction instant testing of the new england market cleaning prices demonstrates that the new method performs better than individual networks and better than committee machines using current ensemble averaging methods

distributional conflict and jurisdictional organization abstract this paper explores the endogenous formation of jurisdictions assuming the political process is a costly fight to acquire shares of the gnp pie in such a setting the stability of a unified jurisdiction is not necessarily determined by the preferences of the richest member region we also show that a system of federalism is especially significant in ameliorating distributional competition and conflict less resources are spent in aggregate on appropriative activities under a hierarchical system of federalism than in a unified jurisdiction with a single central government

electricity market reform failures uk norway alberta and california an analysis of electricity market reforms already taken place in the uk norway alberta canada and california usa leads to our overall conclusion that the introduction of a competitive generation market of itself has failed to deliver reliable service at low and stable prices the market reform failures are attributed to market power abuse by few dominant sellers especially at times of transmission congestion poor market design that invites strategic bidding by suppliers the lack of customer response to price spikes capacity shortage caused by demand growth not matched by new capacity and thin trading of forward and futures contracts that are critical for price discovery and risk management the paper then explains why an electricity market reform can easily fail to deliver the promised gains of better service at lower and more stable prices the policy implication is that an electric market reform can be extremely risky and may lead to a disastrous outcome thus it is imprudent to implement such a reform in countries with limited sites for newgeneration and no indigenous fuels e g israel and hong kong these countries should therefore consider introducing performance based regulation that can immediately benefit electricity consumers in terms of lower prices more stable prices improved reliability more choices while encouraging the electric sector to pursue efficient operation and investment r 2003 elsevier science ltd all rights reserved

early round upsets and championship blowouts i introduction popular discussions of tournament play often celebrate the success of underdogs in early rounds and decry the prevalence of unexciting finals such a pattern might be just a statistical illusion there are many early round matches so some upsets are inevitable and there is only one final so it is unlikely to be the most exciting match of the tournament in this article we consider instead whether the pattern might have a real foundation in the strategic allocation of effort by tournament participants we analyze a two round tournament in which a favorite and underdog play in each of the two semifinals and then one player from each match advances to the final victory in a match is probabilistic in that the chance of winning is increasing in each player s relative quality and in his relative effort expenditure 1 each player has a fixed amount of effort to exert over the two rounds unused effort is of no value and the only payoff is from winning the tournament to maximize the chance of winning each player must balance out the benefits of expending more effort in the semifinal against the opportunity cost of having less effort available for the final favorites and underdogs both have an incentive to conserve resources for the final but the trade offs they face are different a favorite plays a weak opponent in the semifinal but is likely to face a tough opponent in the final so it has a strong incentive to hold back conversely an underdog already plays a tough opponent in the semifinal so it has less incentive to conserve effort for the final 2 because of these different incentives we find that in any symmetric nash equilibrium underdogs exert more effort than favorites do in the semifinal the extra effort does not fully compensate for lower ability and underdogs are still likely to lose but the chance of an upset rises in the final round each player expends all its remaining resources so differences in abilities are no longer compressed by strategic considerations instead an underdog who makes it to the final has fewer resources left to spend than the favorite so differences in abilities are amplified and the chance of a blowout by the favorite rises if a favorite loses to an underdog in the early rounds it is often accused of looking past the underdog to its next match even if a player s strategy is optimal ex ante it might turn out to be unsuccessful ex post so such criticism is often unfair our results imply that it is rational for the favorite to hold back on resources in the semifinal even if it correctly anticipates that in equilibrium the underdog will be playing harder sometimes the strategy will backfire but on average the favorite benefits from being in a better position for the final these results are derived using a standard contest model in which each player s probability of victory in a match is a strictly increasing function of his ability and effort 3 such models were first developed to analyze rent seeking tullock 1967 1980 and similar models appear in a wide variety of areas including patent races loury 1979 election campaigns snyder 1989 compensation schemes nalebuff and stiglitz 1983 career ladders lazear and rosen 1981 lobbying baye et al 1993 and sports contests szymanski 2003 4 more specifically we model the contest as a sequential elimination ladder tournament in which players first compete in separate groups and the winners then compete against each other rosen 1986 our result that underdogs do indeed try harder than favorites in the semifinals contrasts with that of rosen 1986 p 707 8 because the favorite has a better chance of victory in the final rosen finds that winning a semifinal match is more valuable to the favorite so the favorite tries harder than the underdog we reach the opposite conclusion because we assume that there is a fixed supply of effort to be used across rounds and unused effort in the tournament has no value

incentives and problem uncertainty in innovation contests an empirical analysis contests are a historically important and increasingly popular mechanism for encouraging innovation a central concern in designing innovation contests is how many competitors to admit using a unique data set of 9 661 software contests we provide evidence of two coexisting and opposing forces that operate when the number of competitors increases greater rivalry reduces the incentives of all competitors in a contest to exert effort and make investments at the same time adding competitors increases the likelihood that at least one competitor will find an extreme value solution we show that the effort reducing effect of greater rivalry dominates for less uncertain problems whereas the effect on the extreme value prevails for more uncertain problems adding competitors thus systematically increases overall contest performance for high uncertainty problems we also find that higher uncertainty reduces the negative effect of added competitors on incentives thus uncertainty and the nature of the problem should be explicitly considered in the design of innovation tournaments we explore the implications of our findings for the theory and practice of innovation contests this paper was accepted by christian terwiesch operations management

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

risk constrained profit maximization in day ahead electricity market the deregulation of the electricity industry has caused for the generation company genco the need of tools for measuring and managing the risk beyond the classical problem of generating unit scheduling in this paper a probabilistic framework for the problem of managing risk faced by gencos trading in day ahead energy market is proposed in particular a stochastic forecast of electricity price and the technical features of hydrothermal units are considered the approach is based on an optimization procedure for maximizing expected profits in the presence of risk constraints conditional value at risk for the distribution of daily profit is used as risk measure

rent risk and replication preference adaptation in winner take all markets abstract we study the evolution of an economy where agents who are heterogeneous with respect to risk attitudes can either earn a certain income or enter a risky rent seeking contest we assume that agents behave rationally given their preferences but that the population distribution of preferences evolves over time in response to material payoffs we show that in particular initial distributions with full support converge to stationary states where all types are still present although rents are perfectly dissipated in material terms at a steady state efficiency is greater than if everybody had been risk neutral since risk lovers specialize in rent seeking

orchestrating rent seeking contests contests have different sometimes quite complex organisational structures in particular while most of the existing literature focusses on simultaneous contests multistage contests are also quite frequently encountered this paper seeks to provide a rationale for the latter by endogenising the choice of a contest structure which is made by an organiser of a contest interested in maximising the efforts expended by the contenders

measuring the efficiency of grid companies in china a bootstrapping non parametric meta frontier approach abstract the unbundling policy reform of power industry has become a worldwide trend since 1980s there are quite many studies focusing on the efficiency changes of transmission and distribution sectors in european and latin american countries while few reports on china s issues have been found this paper employs a nonparametric frontier estimation combined with meta frontier and bootstrapping method to measure the productive efficiency and changes in the decomposition index for china s 31 grid companies from 2004 to 2013 in addition it further employs tobit regression model to analyze the influences of relevant policies and heterogeneity factors such as natural conditions and economic development the results indicate that the grouping approach extends the application of non parametric data envelopment analysis which may decrease the assumption of homogeneity for the decision making units and provide better efficiency estimates by increasing the credibility of the evaluation results overall productive efficiency increased during the whole study period with technology progress the main contributor to this improvement efficiency trends fluctuated with changes in economic development and power supply situation and the economics and customer density had positive effects on productive efficiency while the influence of clean power proportion is negative

russian electricity market reform deregulation or re regulation abstract russia commenced liberalization of electricity prices in 2007 increasing the liberalization rate by 10 25 every six months it was planned to reach full liberalization by 2011 currently the degree of liberalization is uncertain because of intense price regulation and a highly concentrated market in the hands of four large generating companies increased regulation and further consolidation may drive the market towards its pre reform state this paper analyses the competitive landscape of the russian electricity market by assessing the ownership structure of electricity generation price drivers and government involvement in the electricity wholesale market in russia the main research question is why the targeted level of market liberalization has not been fully achieved in the russian electricity market

auctions and bidding a primer maybe the contractor was right to think bid jobs are different but it is more likely that he suffered from too simple a view of what is involved in preparing a competitive bid our analysis will show that even an experienced estimator working in familiar terrain can lose money if he doesn t understand the subtleties of competitive bidding the phenomenon experienced by the painting contractor known as the winner s curse is just one of the surprising and puzzling conclusions that have been turned up by modern research into auctions another is the theoretical proposition supported also by some experimental evidence that for example a sealed bid treasury bill auction in which each buyer pays a price equal to the highest rejected bid would yield more revenue to the treasury than the current procedure in which the winning bidder pays the seemingly higher amount equal to his own bid there are also subtle results that demonstrate the equivalence of such apparently different institutions as the standard sealed bid auction in which the auctioneer seller sells the goods to the highest bidder for a price equal to his bid and the dutch auction in which the auctioneer seller begins by asking a high price and gradually lowers the price until

priced based operation in an auction market structure open transmission access is a new legal requirement within the electric power industry interchange will require evaluation of the existing conditions to determine if the product can be delivered at the time required and at the level awarded through the bidding or negotiation process this paper seeks to identify the likely deregulation details for a full market implementation when native load is considered equal to any other third party load comparability this paper seeks to identify the technical issues such as standards and algorithms necessary for changing the national infrastructure from a vertically integrated industry to a horizontally integrated industry

liberalisation of the russian power sector abstract the paper discusses the russian power sector reform plan approved by the government in july 2001 which outlines the framework for competition and changes in ownership structure the paper focuses on the following issues related to the plan price reform restructuring of regional energos and large generating companies restructuring of transmission and system operation the mechanism for introducing competition competition for residential consumers and reform sequencing one key message of the paper is that price and regulatory reform is central to success of market liberalisation a second key message is that the restructuring of energos should not create companies with market power ideally local generation and distribution companies would be owned separately with multiple generators in each region at a minimum commonly owned companies should keep separate accounts with regulation of generation a possibility where there is market power regarding transmission and dispatch common ownership would not be a problem given that transmission and generation are separately owned on competition a fully fledged pool may not be appropriate in the case of russia with the alternative of a market based on bilateral contracts with a balancing pool functioning better in a context of non payment and constrained institutional capacity and providing security for investments regarding competition for residential consumers this is not a priority in the short to medium term lastly on sequencing it is better that structural and institutional change takes place before competition begins

a profit based unit commitment ga for the competitive environment as the electrical industry restructures many of the traditional algorithms for controlling generating units need modification or replacement previously utilized to schedule generation units in a manner that minimizes costs while meeting all demand the unit commitment uc algorithm must be updated a uc algorithm that maximizes profit will play an essential role in developing successful bidding strategies for the competitive generator simply bidding to win contracts is insufficient bidding strategies must result in contracts that on average cover the total generation costs no longer guaranteed to be the only electricity supplier a generation company s share of the demand will be more difficult to predict than in the past removing the obligation to serve softens the demand constraint in this paper the authors provide a price profit based uc formulation which considers the softer demand constraint and allocates fixed and transitional costs to the scheduled hours the authors describe a genetic algorithm solution to this new uc problem and present results for an illustrative example

effects of long term tariff regulation on investments under low credibility of rules rate of return and price cap in russian electricity grids abstract the transition from a short term cost plus tariff regulation to either a long term rate of return or long term price cap regulation in russia started in 2009 and was completed in 2012 causing substantial changes in investment over the course of the reform we estimate panel data of 46 russian electricity distribution entities with a dynamic investment model using the system generalized method of moments and addressing potential endogeneity issues we show that despite the noncredible regulatory policy the transition from short to long term regulation had a positive and significant effect on the investment rate of regulated entities the specific long term regulation design applied in russia from 2008 to 2017 either rate of return or price cap had no effect on the investment rate these results are important for the introduction of changes in regulatory frameworks in developing countries

contests with stochastic abilities we consider the properties of perfectly discriminating contests in which players abilities are stochastic but become common knowledge before efforts are expended players whose expected ability is lower than that of their rivals may still earn a positive expected payoff from participating in the contest which may explain why they participate we also show that an increase in the dispersion of a player s own ability generally benefits this player it may benefit or harm his rival but cannot benefit the rival more than it benefits himself we also explore the role of stochastic ability for sequential contests with the same opponent multibattle contests and with varying opponents elimination tournaments and show that it reduces the strong discouragement effects and holdup problems that may otherwise emerge in such games high own ability dispersion selects such players into the contest and favors them in elimination contests jel d72 d74 i introduction manytournamentsarecharacterizedbymultiple rounds with or without the elimination of some candidates in earlier stages of the process of determining a final winner in the political context electionprocessesthatdetermineparty leadersorpoliticalleadersmoregenerallyconsist ofmultipleconteststages intheracefortheu s presidency severalcompetitionstagesgradually narrowdownthenumberofcompetitors 1 inter

tournament rewards and risk taking this article considers a lazear rosen tournament model where agents can influence both the spread of their output distribution risk taking and its mean the unique equilibrium induces excessive risk taking and a low level of effort by modifying the tournament to give the highest prize to the agent with the most moderate output a low level of risk taking and high level of effort can be sustained as an equilibrium the first result can be useful to understand the relative performance evaluation puzzle of executive compensation and the second result can be useful to understand puzzling workplace norms promoting mediocrity

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

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

risk taking in selection contests abstract we study contests where the strategic variable is the degree of risk taking rather than the amount of effort the selection efficiency of such contests is examined we show that the selection efficiency of a contest may be improved by limiting the competition in two ways by having a small number of contestants and by restricting contestant quality

auction implementation problems using lagrangian relaxation lagrangian relaxation lr is used as an auction method for bidding in a deregulated environment this paper focuses on the problems that occur while using lr as an auction method identical or similar units can prevent lr from finding the optimal solution if the units are similar lr may have trouble selecting some of them for the optimal solution a feasible solution may thus not be found since a heuristic selection of which unit data to alter has to be applied this is inequitable to the unit s not selected and may result in lawsuit s because the dispatcher has to use heuristic selection there is no fair solution to these problems the authors suggest previously published methods to implement auctions sensitivity analysis has also been applied in this paper to show that the percentage difference of similarity between units may affect the solution found

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

bidding strategy design for different types of electric power market participants this paper presents a methodology to design an optimal bidding strategy for a generator according to his or her degree of risk aversion a typical thermal plant is assumed to be located in the ontario electricity system to apply this methodology for two types of participants risk averse and risk seeker

the east german wage curve 1993 1998 abstract this paper examines the east german wage curve using the employment statistics of the federal employment services of germany bundesanstalt fur arbeit over the period 1993 1998 the six waves of this panel include a total of 32 188 684 individual employment spells the statistics comprise the entire population of people gainfully employed and included in the social insurance system these are classified into 114 administrative districts landkreise taking into account the endogeneity of unemployment as well as controlling for region and time effects this paper finds support for the wage curve in east germany the overall unemployment elasticity estimate is 0 15 and is higher for female workers than male workers

strategic bidding for price taker hydroelectricity producers this paper introduces a stochastic programming model that integrates strategic bids or offers for electricity in quantities and prices in a deregulated electricity market the model is designed to maximize the profits of a producer of electricity who manages a series of power plants along a river the model is compared with a previously reported stochastic model where the bidding process is disregarded the superiority of the new model is empirically demonstrated on historical data

bidding in hierarchies this paper reconsiders the comparison between hierarchical contests and single stage contests a condition is given that characterizes whether and when the aggregate equilibrium payoff of contestants is higher in the single stage contest and when the single stage contest is more likely to award the prize to the contestant who values it most highly the outcome depends on inter and intra group heterogeneity and is not driven by free rider incentives

framework for energy brokerage system with reserve margin and transmission losses the power industry in the united states is presently participating in a changing business environment while planning to meet future peak demand is still a concern the efficient utilization of existing generation and transmission resources is fast becoming of primary interest this interest suggests to move from cost based market operations to price based market operations in such a business environment a need for a mechanism to determine the pricing of various ancillary services is desired as the ancillary services go together with electrical power transfer the proposed approach develops a novel method of pricing mechanism for reserve margins and transmission losses as a part of the overall transaction in an energy brokerage system the brokerage model described in this paper is based on formulations using linear programming

labor market slack and the wage curve abstract the unemployment rate might not serve as an accurate measure of labor market slack when analysing countries with large scale labor market programs we replicate and extend the wage curve for east germany the results are in favor of the incorporation of such policy measures

a diffusion model based supply side offer agent worldwide energy markets have been on a path toward deregulation for several decades these markets have proven to be difficult to design and run because of their repetitive nature and the externalities provided by reliable grid operation in a deregulated market environment our experiments suggest that market participants will pursue their own profit maximizing objective rather than use an objective that reflects social benefit multiagent simulation is useful for gaining insights into market participant behavior under various rules in this way market rules can be tested for efficacy and efficiency in this paper an agent based on a double layer diffusion model developed elsewhere is tested and its effectiveness reported

day ahead electricity price forecasting using the wavelet transform and arima models this paper proposes a novel technique to forecast day ahead electricity prices based on the wavelet transform and arima models the historical and usually ill behaved price series is decomposed using the wavelet transform in a set of better behaved constitutive series then the future values of these constitutive series are forecast using properly fitted arima models in turn the arima forecasts allow through the inverse wavelet transform reconstructing the future behavior of the price series and therefore to forecast prices results from the electricity market of mainland spain in year 2002 are reported