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

bidding behavior at sequential first price auctions with out supply uncertainty a laboratory analysis abstract we report on a series of experiments that test the effects of an uncertain supply on bidding behavior and prices in sequential first price auctions with private independent values and unit demands supply is assumed uncertain when buyers do not know the exact number of units to be sold i e the length of the sequence we observe an important overbidding in all but the last stage of a sequence no matter whether supply is certain and a non monotone behavior when supply is certain yet the data qualitatively support most stage to stage bid predictions and the price trend predictions for risk neutral bidders

prices and the winner s curse we usually assume that increases in supply allocation by rationing and exclusion of potential buyers reduce prices but all these activities raise the expected price in an important set of cases when common value assets are sold furthermore when we make the assumptions needed to rule out these anomalies for symmetric buyers small asymmetries among the buyers necessarily cause the anomalies to reappear our results help explain rationing in initial public offerings and outcomes of spectrum auctions we illustrate our results in the wallet game and in another new game we introduce the maximum game

multiple object auctions with budget constrained bidders in the last few years governments in many parts of the world have aggressively sought to privatize socially held assets this wave of privatization has included the sale of industrial enterprises in the former soviet union and eastern europe the sale of public transportation systems in britain and scandinavia and the sale of radio spectra in the u s both the enormity and the importance of these sales have naturally led to an examination of how best to accomplish this task auctions have been proposed and have frequently been used as time honoured convenient and attractive mechanisms for such sales this in turn has led to a revival of interest in the theory of auctions particularly those involving multiple objects the magnitude of these privatization sales has meant that in many instances it is realistic to consider that buyers may run up against liquidity or borrowing constraints the presence of these financial constraints introduces important differences into traditional auction theory for instance pitchik and schotter 1986 and che and gale 1996 1998 have shown that when bidders are subject to such constraints the conclusion of the celebrated revenue equivalence theorem no longer holds when multiple objects are auctioned in the presence of budget constraints it may be advantageous for a bidder to bid aggressively on one object with a view to raising the price paid by his rival and depleting his budget so that the second object may then be obtained at a lower price in effect a bidder may wish to raise a rival s costs in one market in order to gain advantage in another thus unlike in traditional auction theory a particular bidder s payoff is affected by the price paid by a rival bidder it is important to note that this effect comes into play only when several objects are sold

assessing the performance of renewable electricity support instruments abstract the performance of feed in tariffs and tradable certificates is assessed on criteria of efficacy efficiency equity and institutional feasibility in the early stage of transition to an energy system based entirely on renewable energy supplies renewable electricity can only thrive if support takes into account the specific technical economic and political problems which result from embedding this electricity in conventional power systems whose technology organizational structure environmental responsibility and general mission differ profoundly from the emerging renewable based system support schemes need to capture the diversity of power supplies the variable nature of some renewable supplies and their different attributes for the purposes of public policy they must take into account the variety of generators including small decentralized generation emerging in a renewable based system and the new relationships between generators and customers renewable energy policies need a clear point of reference because the incumbent power systems are not sustainable they must adapt to the requirements of the renewable ones not the other way round incumbent systems carry the responsibility of paying the transition something that corresponds best with the polluter pays principle

sequential auctions price trends and risk preferences abstract we analyze sequential auctions in a general environment where bidders are heterogeneous in risk exposures and exhibit non quasilinear utilities we derive a pure strategy symmetric equilibrium for the sequential dutch and vickrey auctions respectively with an arbitrary number of identical objects for sale when bidders are risk averse preferring the equilibrium price sequences must be downward upward drifting the declining price anomaly is thus evidence of bidder risk aversion in this general environment these results derive from a key assumption that bidders marginal utilities are log supermodular in payment and type

the status of the hydrogen and fuel cell innovation system in iran abstract hydrogen energy in combination with fuel cell technology plays an important role in addressing the growing energy demand in the coming decades this paper analyses the functional and structural factors which affect the development of this technology in iran we apply the technological innovation system tis approach the analysis shows that compared to the progress of the hydrogen and fuel cell technology hfct in leading countries iran is far behind the desired phase of development this gap is partly explained due to the weak structure and functions of the hfct system in iran thus the technology has remained in the demonstration phase for a long time the analytical results show that the fulfillment of entrepreneurial activities is required for the transition of the technology to the pre commercial phase in turn considerable financial resources are needed to accomplish entrepreneurial activity considering the current situation of renewable energy resources in iran supportive laws and regulations are urgently needed as prerequisites for the mobilization of financial resources

impacts of renewables obligation with recycling of the buy out fund tradable green certificate tgc or renewables obligation ro programs typically include a buy out option but only in the uk the buy out fund is redistributed back to the suppliers who have submitted the certificates we show that when the buy out fund is redistributed the supply of renewable energy responds positively to the market conditions and renewables target without it the buy out rate is equivalent to a maximum price however redistribution of the buy out fund may induce strategic behavior from producers who have market power we analyze the impacts of market power and integration on the supply of conventional and renewable energy under the ro program with the buy out fund recycled and devise some empirical tests to predict these impacts policy implications of this study are discussed with special reference to the new fit cfd system

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

sequential auctions theory and evidence from the seattle fur exchange we develop a model that incorporates salient features of the seattle fur exchange identical lots of furs are auctioned sequentially bids must be raised by specified increments and the winner of a lot has the privilege of beginning the bidding on the subsequent lot predictions of the theory are consistent with the data revenue implications of the theory are also explored

promoting industrial symbiosis empirical observations of low carbon innovations in the humber region uk industrial symbiosis has been identified as a strategy to increase resource efficiency lower carbon emissions and increase business growth one type of industrial symbiosis is the innovative use of wastes from one company as a resource for another company however empirical understanding of implementing waste to resource innovations and hence how they can be promoted by public and private organisations is still limited therefore this study explored how companies implemented waste to resource innovations in the humber region uk five case studies were conducted with companies that used or supplied a secondary biomass resource for power generation or fuel manufacturing this article discusses how companies developed relations with biowaste resource suppliers or clients the results expanded operational understanding of waste to resource innovation processes as it revealed companies activities and their strategic considerations comparing the case studies the social processes through which relations between biowaste resource partners developed were largely similar however two different networking strategies were identified some companies had to engage new industries and therefore diversified their resource partners during the innovation process but strived to limit the number of resource partners once the innovation was realised conversely others expanded activities within their network and hence strengthened existing relations during the innovation but strived to increase the number of resource partners afterwards to manage risky over dependencies within their supply network finally resource security economic benefits and policy and regulation were of key importance to conclude operational and strategic insights to promote the uptake of waste to resource innovations are presented however further research is necessary before broad generalizations can be considered

the uk s levy control framework for renewable electricity support effects and significance there is a long standing debate over price vs quantity approaches to supporting the deployment of renewable electricity technologies in the context of a a recent shift from quantity to price based support the uk has also introduced a new form of budgetary framework the levy control framework lcf the introduction of the lcf has been very important for investors but has received relatively little attention in the academic literature the paper gives an overview of the lcf explores its effects on renewables policy on consumers and on investor confidence arguing that an unintended consequence of its introduction has been to increase uncertainty through interactions with underlying support mechanisms a number of problems with the current scope and design of the lcf are noted it is argued that the lcf is best understood as aimed at avoiding a political backlash against renewable support policy in a context where the benefits of such policy are concentrated economically and socially the paper concludes by placing the lcf within a wider context of a shift towards greater budgetary control over renewable energy support policy across european countries

revealed preference and activity rules in dynamic auctions activity rules constraints that limit bidding in future rounds based on past bids are intended to limit strategic bidding delays in high stakes auctions this article provides a general treatment of activity rules traditional point based rules are effective for homogeneous goods and reasonably suited for substitute goods however they are simultaneously too strong and too weak for general environments they allow parking while sometimes preventing straightforward bidding we prove that the activity rule operationalizing the generalized axiom of revealed preference garp is essentially the unique rule that enforces the law of demand while enabling straightforward bidding and never producing dead ends

the inconsistency of land values land rents and capitalization formulas this paper examines relationships that exist between farm income land values and capital asset pricing theory using two commonly referenced data sets it is shown that land prices and land rents do not have the same time series representations a necessary condition for the simple capital asset pricing theory to hold this suggests that a fundamental rethinking of the way in which land prices are viewed and modeled is needed more complex models that allow for rational bubbles risk aversion and future shifts in government policy or commodity prices may be required

bid costs and endogenous bid caps we study contests where several privately informed agents bid for a price all bidders bear a cost of bidding that is an increasing function of their bids and moreover bids may be capped we show that regardless of the number of bidders if agents have linear or concave cost functions then setting a bid cap is not profitable for a designer who wishes to maximize the average bid on the other hand if agents have convex cost functions i e an increasing marginal cost then affectively capping the bids is profitable for a designer facing a sufficiently large number of bidders

standard auctions with financially constrained bidders we develop a methodology for analyzing the revenue and efficiency performance of auctions when buyers have private information about their willingness to pay and ability to pay we then apply the framework to scenarios involving standard auction mechanisms in the simplest case where bidders face absolute spending limits first price auctions yield higher expected revenue and social surplus than second price auctions the revenue dominance of first price auctions over secondprice auctions carries over to the case where bidders have access to credit these rankings are explained by differences in the extent to which financial constraints bind in different auction formats

optimal sequential auctions sequential sealed first price and open descending price procurement auctions are studied we examine which procurement auction rule achieves the low procurement cost we show that the answer to this policy question depends on whether the items are complements or substitutes with substitutes the first price procurement auction is preferred while with complements the open descending price procurement auction is preferred we also illustrate the procurement cost minimizing auction and the auction rule preferred by the bidders with substitutes bidders prefer the open descending price procurement auction while with complements bidders prefer the first price procurement auction

the enactment of socio technical transition pathways a reformulated typology and a comparative multi level analysis of the german and uk low carbon electricity transitions 1990 2014 abstract this paper aims to make two contributions to the sustainability transitions literature in particular the geels and schot 2007 res policy 36 3 399 transition pathways typology first it reformulates and differentiates the typology through the lens of endogenous enactment identifying the main patterns for actors formal institutions and technologies second it suggests that transitions may shift between pathways depending on struggles over technology deployment and institutions both contributions are demonstrated with a comparative analysis of unfolding low carbon electricity transitions in germany and the uk between 1990 2014 the analysis shows that germany is on a substitution pathway enacted by new entrants deploying small scale renewable electricity technologies rets while the uk is on a transformation pathway enacted by incumbent actors deploying large scale rets further analysis shows that the german transition has recently shifted from a stretch and transform substitution pathway to a fit and conform pathway because of a fightback from utilities and altered institutions it also shows that the uk transition moved from moderate to substantial incumbent reorientation as government policies became stronger recent policy changes however substantially downscaled uk renewables support which is likely to shift the transition back to weaker reorientation

regional distribution of photovoltaic deployment in the uk and its determinants a spatial econometric approach abstract photovoltaic pv panels offer significant potential for contributing to the uk s energy policy goals relating to decarbonisation of the energy system security of supply and affordability the substantive drop in the cost of panels since 2007 coupled with the introduction of the feed in tariff fit scheme in 2010 has resulted in a rapid increase in installation of pv panels in the uk from 26 5mwp in 2009 to over 5gw by the end of 2014 yet there has been no comprehensive analysis of the determinants of pv deployment in the uk this paper addresses this gap by employing spatial econometrics methods to a recently available data set at a fine geographical detail following a traditional regression analysis a general to specific approach has been adopted where spatial variations in the relationships have been examined utilising the spatial durbin model using the cross sectional data relating to the uk nuts level 3 data empirical results indicate that demand for electricity population density pollution levels education level of households and housing types are among the factors that affect pv uptake in a region moreover lagrange multiplier test results indicate that the spatial durbin model may be properly applied to describe the pv uptake relationship in the uk as there are significant regional spillover effects

governing community energy feed in tariffs and the development of community wind energy schemes in the united kingdom and germany this paper analyses the development of community energy in the uk by comparing it to germany in relation to decentralisation scales and ownership structures particularly of wind energy varying approaches to energy generation at the community scale provide interesting insights into the impact of policy innovation as well as the capacity of national energy frameworks to foster socially innovative engagement practices beyond the purely technological diffusion of innovations by examining interactions between technological and social innovations with the help of a qualitative analysis opportunities for potential generators not traditionally engaged in energy generation to tap into these innovation systems are analysed this paper suggests that greater commitment to diversification beyond the implementation of policy measures such as the feed in tariff is required to provide communities with the capacity to develop new generation practices in terms of scale and ownership the uk in particular is struggling to protect these new generation practices which allow communities to derive benefits facilitated by specific energy policy measures according to their potential it concludes by indicating areas where niche protection might need to be expanded if community energy is to play a greater role in the uk s ambitious transition to a low carbon economy

catalogue vs order of sale effects in sequential auctions theory and evidence from a rare book sale we examine bidding in a rare book sequential auction that has features of a natural experiment lots were arranged in alphabetical order the reserve set non strategically and half the bids placed by mail in bidders we distinguish between the effects induced by the print order of the catalogue from those by the sequential nature of the sale we document the existence of distinct catalogue effects on prices number of bids and price variability and determine their causes we demonstrate that these catalogue effects also influence floor bidder behaviour we derive a theoretical model that generates key aspects of floor bidder behaviour copyright 2004 royal economic society

understanding carbon lock in abstract this paper narrative argues that industrial economies have been locked into fossil fuel based energy systems through a process of technological and institutional co evolution driven by path dependent increasing returns to scale it is asserted that this condition termed carbon lock in creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages the notion of a techno institutional complex is introduced to capture the idea that lock in occurs through combined interactions among technological systems and governing institutions while carbon lock in provides a conceptual basis for understanding macro level barriers to the diffusion of carbon saving technologies it also generates questions for standard economic modeling approaches that abstract away technological and institutional evolution in their elaboration the question of escaping carbon lock in is left for a future paper

nonconventional renewable energy governance in brazil lessons to learn from the german experience abstract this paper presents a comparative analysis of energy governance regarding nonconventional renewable energy sources ncres in brazil and germany brazil is a world leader in the use of conventional renewable energy sources such as hydro power while germany has been achieving outstanding results in fostering ncres the focus is on two critical issues the legal and regulatory framework and the institutions created to support the ncres market development the comparison shows that despite the very different energy situations and policy drivers valuables lessons can be extracted from the german experience the main lesson for brazil is to think ncres as a strategic opportunity to rely less on fossil fuel and large hydroelectric power plants to decentralize the electric power sector to use the huge solar biomass and wind power potential available in the country and to create a environment friendly ncres industry to this end three critical points were identified 1 the legal and regulatory framework should be improved 2 long term energy planning taking into account social economic and climate issues and 3 the current institutions supporting ncres in brazil should be upgraded and or new ones such as more specific energy agencies should be created

perfect equilibria in budget constrained sequential auctions an experimental study this article presents an experimental study of bidding behavior in sequential auctions in which there are budget constraints and perfect information our experiments test both the properties of such auctions and the predictive power of a refinement of the nash equilibrium concept we find that budget constraints affect the behavior of bidders and that the trembling hand perfect equilibrium is generally a good predictor of prices

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

renewable electricity support systems are feed in systems taking the lead abstract support systems for renewable energy sourced electricity res e can be classified into price and quantity based systems their most representative instruments are feed in systems price based and quota systems e g green certificates or a renewable portfolio standard quantity based the origins of these support systems are quite different and are motivated by different political and economic needs likewise their geographical distribution and effectiveness also differ worldwide feed in systems are the most widespread res e support system in recent years some classical quota countries have partially or even totally changed to feed in systems feed in systems seem to encourage higher res e deployment technology diversity and investor security although the manufacturing capacity for certain res e technologies has been more developed in some feed in countries lately this has changed to some extent due to the incorporation of emerging countries in the res e industry traditionally quota systems appeared to be more compatible with liberalisation of the electricity market however since the introduction of the premium system this argument can be countered since feed in premiums can be considered compatible with the electricity market as quota systems regarding the price paid for res e in quota countries higher green certificate prices have not led to higher res e quantities moreover the relative support levels in quota countries are higher on average than in fit countries contradicting the common argument that quota systems are more cost effective additionally feed in systems especially if stepped tariffs are designed encourage higher res e geographical dispersion avoiding the concentration of res e facilities in just a few locations which can lead to nimby not in my back yard syndrome all these factors may explain the steady spread of feed in systems worldwide the purpose of this paper is to assess the performance of quota and feed in systems thereby contributing to the worldwide debate on the suitability of the different res e support systems

escaping carbon lock in this article explores the climate policy implications of the arguments made in understanding carbon lock in unruh 2000 which posited that industrial countries have become locked into fossil fuel based energy systems through path dependent processes driven by increasing returns to scale carbon lock in arises through technological organizational social and institutional co evolution culminating in what was termed as techno institutional complex tic in order to resolve the climate problem an escape from the lock in condition is required however due to the self referential nature of tic escape conditions are unlikely to be generated internally and it is argued here that exogenous forces are probably required

adapting electricity markets to decarbonisation and security of supply objectives toward a hybrid regime abstract the policy objectives of decarbonisation of the electricity sector whilst maintaining security of supply have led to a new wave of market reforms in many jurisdictions which liberalised their industry there is a wide range of models under this new hybrid regime which essentially combine the energy market with planning and long term risk transfer arrangements this paper takes an institutionalist approach in terms of modularity of the market design and reviews the issues with the standard historical market model which led to the introduction of additional long term modules we then study the interactions between the existing and new modules and identify ways in which the initial market modules can be improved to address inconsistencies with the new modules we conclude by discussing the conditions under which the various changes in market architectures could converge toward a hybrid regime structured around a two step competition with a competition for the market via the auctioning of long term contracts to support investment followed by competition in the market for short term system optimisation via the energy market

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

understanding farmland price changes this paper develops a structural model of land prices which includes the multidimensional effects of inflation on capital erosion savings return erosion and real debt reduction as well as the effect of changes in the opportunity cost of capital the results show that inflation and changes in the real returns on capital are major explanatory factors in farmland price swings in addition to returns to farming additionally the effects of credit market constraints and expectations schemes are considered explicitly in the analytical model

labor income and risky investments can part time farmers compete abstract in the developed countries a majority of farm households receive at least as much income from nonfarm sources as from the farm such part time farms have survived inspite of lower returns than full time farms this paper considers when lower returns to part time farming could be compensated by risk reduction due to diversification of income sources the paper uses a dynamic portfolio choice model with labor income the model and results could be applied in other contexts as well

historic paths and future expectations the macroeconomic impacts of the offshore wind technologies in the uk abstract offshore wind power osw plays a key role within the uk strategy for a transition towards a low carbon economy offering vast potential for establishing a high tech manufacturing industry previous experiences in the onshore sector owp suggest the uk might fail in fully capturing these macroeconomic benefits in this work we investigate the history of uk renewable policies comparing its national strategy to those of other major osw export countries through the use of a numerical general equilibrium model we quantify the macroeconomic impacts under three scenarios a baseline which relies on previous estimates and foresee limited local content a contamination scenario where the uk content reaches the same levels of owp and a non myopic scenario where investors expect governmental support to decrease or disappear replicating a common path of past renewable policies we identify the uk as a fdi oriented country our results suggest that increasing the share of locally sourced capital goods in osp to owp level could generate larger income and employment effects in the uk economy we find that under forward looking investors the economic benefits are significantly lower than the case of myopic agents our results show an inherent conflict with stated purposes of uk policy for osw

liquidity risk in sequential trading networks abstract this paper studies a model of intermediated exchange with liquidity constrained traders intermediaries are embedded in a trading network and their financial capacities are private information we characterize our model s monotone pure strategy equilibrium agents earn positive intermediation rents in equilibrium an experimental investigation supports the model s baseline predictions concerning agents strategies price dynamics and the division of surplus while private financial constraints inject uncertainty into the trading environment our experiment suggests they are also a behavioral speed bump preventing traders from experiencing excessive losses due to overbidding

comparing the innovation effects of support schemes for renewable electricity technologies a function of innovation approach abstract the aim of this paper is to provide a comparative assessment of the innovation effects of instruments which support the diffusion of renewable electricity technologies with a functions oriented technological innovation system perspective the paper provides a link between two major streams of the literature the functions of innovation systems and the literature on renewable electricity support schemes we show that when a functional perspective is adopted feed in tariffs are likely to be superior to other policy instruments quotas with tradable green certificates and tendering although they still need to be complemented with other instruments most importantly direct r d support furthermore those innovation effects are affected by the specific design elements of the instruments chosen

why is south korea s renewable energy policy failing a qualitative evaluation abstract this study explores the causes of the south korean government s failure to successfully deploy its renewable energy policy despite the south korean government s ongoing efforts since 2002 to promote the deployment of renewable energy the established deployment target has not been met and the share of renewable energy supply in total primary energy supply is poor compared to peer countries with a similar level of economic development therefore we attempt to find the causes of this policy failure using qualitative evaluation methods through the analyses conducted using focused interviews and secondary data we found that the domination of the fossil fuel and nuclear power industry s interests inconsistent policy shifts policy design that lacks sufficient support schemes poorly coordinated government activities and unsystemic and untimely monitoring and feedback have led to the failure of renewable energy deployment policies in south korea to overcome these problems we suggest that the south korean government should set more ambitious policy goals establish a new independent organization that focuses on energy policy issues use a varied policy mix and secure political support from diverse policy actors

what drives renewable energy development abstract this viewpoint reviews renewable energy development in 14 markets that differ in market structure restructured vs not restructured use of feed in tariff fit yes vs no transmission planning anticipatory vs reactive and transmission interconnection cost allocated to a renewable generator high vs low we find that market restructuring is not a primary driver of renewable energy development renewable generation has the highest percent of total installed capacity in markets that use a fit employ anticipatory transmission planning and have loads or end users paying for most if not all of the transmission interconnection costs in contrast renewable developers have been less successful in markets that do not use a fit employ reactive transmission planning and have generators paying for most if not all of the transmission interconnection costs while these policies can lead to higher penetration of renewable energy in the short run their high cost to ratepayers can threaten the economic sustainability of renewable energy in the long run

learning from experience the development of the renewables obligation in england and wales 2002 2010 abstract the uk has enviable renewable resources both onshore wind and offshore wind wave and tidal the offshore valuation group 2010 the government has had policy mechanisms in place since 1990 to encourage these resources to be developed the current mechanism the renewables obligation ro was specifically designed to emphasise competition and therefore to fit in with the uk s overall strategic approach to energy policy however as yet it has not delivered the capacity that it was designed to do and as a result the uk faces a difficult challenge in attempting to meet european wide renewable energy targets for 2020 as well as longer term decarbonisation targets this paper explores some of the major reasons why the ro has performed so poorly to date and considers the prospects for improvement up to 2020 it concludes that the strategic emphasis on competition in the support mechanisms has played a key role in limiting renewables development but that the mechanism has changed significantly since it was introduced however these changes together with proposals for electricity market reform still do not address important elements of risk in comparison with a standard feed in tariff

the impacts of business cycles on returns to farmland investments expected performance and valuation of investments in farmland are examined in relation to prevailing business cycle conditions over a period that includes both the 1970s farm boom and 1980s farm recession information on risk premia in debt equity and land markets are shown to significantly affect conditional expected returns to farmland and consequently farmland values further conditional expected land returns diverge significantly in some years from returns conditionally required on the basis of systematic risk overall implications are that expected land returns are dependent not only on local sector conditions but also on time varying macroeconomic conditions related to business cycles

sequential second price auctions with private budgets abstract we study an auction game in which two units of a good are sold via two second price auctions sequentially to three or more bidders who have private budgets that limit their spending in the auctions we characterize the unique symmetric equilibrium in equilibrium while bidders bid the minimum of their valuations and budgets in the second auction their aggression in the first round depends on two factors the competition from other bidders as measured by the probability of facing high budget bidders and the option value from participating the second auction as measured by the budget difference between various bidders the former factor makes bidders more aggressive and the latter makes them less aggressive in particular when the competition factor dominates the sequential auctions generate higher revenue in expectation than the uniform price auction

caps in sequential contests i introduction in many competitions we can often observe situations where severe constraints are imposed on contestants for example in the u s electoral campaign there is a specific maximum campaign contribution that a single agent can make to a candidate 1 in sports where equipment plays a major role e g sailing motor races etc explicit or implicit technological constraints are imposed on the allowed equipment also several sports leagues e g the national basketball association nba implement a salary cap which places a limit on the total amount of money a team can spend on players salaries salary caps are clearly binding and teams are sometimes forced to trade expensive players in order to make place for other needed team members the usual reason for applying salary caps is that they facilitate even competition between small and large city teams otherwise large city teams could pay more buy the best talent and ultimately destroy any semblance of competition in the league the goal of caps imposed by designers of competitions is to create what we call a competitive balance so that many players have a chance to win and not necessarily the strongest ones in addition if the contest is more competitively balanced the uncertainty of the outcome is higher and therefore the contest is more attractive furthermore competitive balance may lead to an improvement of the expected total performance of all the players rather than just the performance of the top player several other ways have been suggested to enhance the competitive balance in contests for example baye kovenock and de vries 1993 showed that in all pay auctions contests by excluding the strongest player the player with the highest value of winning the contest becomes more competitively balanced and then the players expected total bid may increase moldovanu and sela 2001 found that in all pay auctions under incomplete information when cost functions are convex several positive prizes may be optimal for a designer who wishes to maximize the expected total bid in other words by increasing the number of the prizes the chances of the players with relatively low values of winning to win one of the prizes increase and therefore these players will increase their efforts accordingly cohen kaplan and sela 2008 studied all pay auctions with effort dependent rewards under incomplete information and demonstrated that when the designer maximizes the total bid effort and when there is a sufficiently large number of contestants the optimal reward decreases in the contestants bid this means that a designer will offer higher prizes to the players with relatively low values of winning those who exert lower efforts than to the players with relatively high values of winning those who exert higher efforts such a distribution of prizes balances the bids submitted by the players with high and low values of winning we focus here on the role of bid caps to enhance the competitive balance in contests relatively weak players players with low abilities or low values of winning usually exert low efforts which are lower than the level of the bid cap imposed by a designer in a contest with a bid cap if these players exert an effort that is equal to the bid cap they will have a higher chance to win since no one can exert a higher effort than the bid cap thus the weak players exert more effort than they would in a contest without a bid cap however relatively strong players players with high abilities or high values of winning usually exert higher efforts than the level of the bid cap thus the strong players exert less effort than they would in a contest without a bid cap hence the effect of the bid cap on the players total effort depends on the trade off between the increase of the weaker players efforts and the decrease of the stronger players efforts to be fully effective the bid cap system must guarantee that as many players as possible raise their efforts to the level of the bid cap and as less as possible reduce their efforts to this level

sectoral systems of innovation and production the concept sectoral system of innovation and production provides a multidimensional integrated and dynamic view of sectors it is proposed that a sectoral system is a set of products and the set of agents carrying out market and non market interactions for the creation production and sale of those products a sectoral systems has a specific knowledge base technologies inputs and demand agents are individuals and organizations at various levels of aggregation they interact through processes of communication exchange co operation competition and command and these interactions are shaped by institutions a sectoral system undergoes change and transformation through the co evolution of its various elements 2002 elsevier science b v all rights reserved

ordering revenue and anchoring in art auctions we estimate the effect of ordering by value on revenues in sequential art auctions held by sotheby s and christie s we exploit a pre determined rotation of which of these two houses holds their auction first during auction week in new york city when the house that goes first has relatively expensive paintings compared to the other house we find that the sale premium for the week is around 21 higher relative to the mean sale premium and the fraction of paintings sold during the week is around 11 higher we provide evidence that this is due to an anchoring effect

budget constrained sequential auctions with incomplete information i study a budget constrained private valuation sealed bid sequential auction with two incompletely informed risk neutral bidders in which the valuations and income may be non monotonic functions of a bidder s type multiple equilibrium symmetric bidding functions may exist that differ in allocation efficiency and revenue the sequence of sale affects the competition for a good and therefore also affects revenue and the prices of each good in a systematic way that depends on the relationship among the valuations and incomes of bidders the sequence of sale may affect prices and revenue even when the number of bidders is large relative to the number of goods if a particular good say is allocated to a strong bidder independent of the sequence of sale then auction revenue and the price of good are higher when good is sold first

the two faces of market support how deployment policies affect technological exploration and exploitation in the solar photovoltaic industry the recent years have seen a strong rise in policies aiming to increase the diffusion of clean energy technologies while there is general agreement that such deployment policies have been very effective in bringing technologies to the market it is less understood how these policies affect technological innovation to shed more light on this important question we conducted comparative case studies with a global sample of 9 firms producing solar photovoltaic pv modules complemented by in depth interviews with 16 leading pv industry experts we propose that on the one hand policy induced market growth serves as an important catalyst for innovative activity as it raises the absolute level of firm investments in technological exploration on the other hand however deployment policies create an incentive for firms pursuing more mature technologies to shift their balance between exploitation and exploration toward exploitation firms focusing on less mature technologies cannot tap the potentials of exploitative learning to the same extent as those with more mature technologies therefore stimulating strong market growth may raise the barrier to market entry for less mature technologies we conclude that when designing deployment policies great care should be taken to avoid adverse effects on technological diversity and a premature lock in into more established technologies

devising renewable heat policy overview of support options renewable energy sources of heat offer the substantial economic environmental and social benefits associated with renewable electricity but policy to support their expansion is considerably less advanced the potential for applying various support instruments to renewable heat is considered with advantages and disadvantages discussed c 2012 published by elsevier ltd

sequential auctions of endogenously valued objects two completely informed but possibly asymmetric bidders buy or sell identical claims in sequential auctions they subsequently receive monetary prizes that depend upon the final allocation of claims iterated elimination of weakly dominated strategies leaves a unique nash equilibrium for any prize schedule prices weakly decline as the auctions progress and points of strict decline have a simple characterization for one class of prize schedules which arises naturally if duopolists bid for a scarce input the equilibrium is completely characterized many initial allocations generate the same final unequal division of claims which may be interpreted as the natural market structure journal of economic literature classification numbers d43 d44 l11

high bids and broke winners abstract this paper analyzes auctions where budget constrained bidders have options to declare bankruptcy it predicts a bidding equilibrium that changes discontinuously in a borrowing rate available to bidders when the borrowing rate is above a threshold high budget bidders win and the likelihood of bankruptcy is low when the borrowing rate is below the threshold the winner is the most budget constrained bidder and is most likely to declare bankruptcy this result explains the high bids and broke winners anomaly in the c block fcc spectrum auction based on its equilibrium analysis the paper proves that a seller can profit from offering to finance the highest bidder at a below market interest rate even with default risk journal of economic literature classification numbers d44 d45 d82 g33 l96

the dynamics of bidding markets with financial constraints we develop a model of bidding markets with financial constraints a la che and gale 15 in which two firms choose their budgets optimally and we extend it to a dynamic setting over an infinite horizon we provide three main results for the case in which the exogenous cash flow is not too large and the opportunity cost of budgets is positive but arbitrarily low first firms keep small budgets and markups are high most of the time second the dispersion of markups and money left on the table across procurement auctions hinges on differences both endogenous and exogenous in the availability of financial resources rather than on significant private information third we explain why the empirical analysis of the size of markups based on the standard auction model may have a bias downwards or upwards positively correlated with the availability of financial resources a numerical example illustrates that our model is able to generate a rich set of values for markups bid dispersion and concentration

inventor networks in renewable energies the influence of the policy mix in germany technological change and gains in efficiency of renewable power generation technologies are to a large extent driven by governmental support various policy instruments that can broadly be categorized as technology push demand pull or systemic constitute part of the policy mix for renewable energies our goal is to gain insights into the influence of this policy mix on the intensity and organization of inventive activities for wind power and photovoltaics in germany since the 1980s we examine the effect of different instruments on the size and structure of co inventor networks based on patent data our results indicate notable differences between the technologies the network size for wind power is driven by technology push and systemic instruments while in photovoltaics demand pull is decisive for network growth by and large the instruments complement each other and form a consistent mix of policy instruments the structure of the networks is driven by demand pull for both technologies systemic instruments increase interaction especially in the wind power network and are complementary to demand pull in fostering collaboration

uk innovation systems for new and renewable energy technologies drivers barriers and systems failures abstract a better understanding of the systemic processes by which innovation occurs is useful both conceptually and to inform policy making in support of innovation in more sustainable technologies this paper analyses current innovation systems in the uk for a range of new and renewable energy technologies and generates policy recommendations for improving the effectiveness of these innovation systems although incentives are in place in the uk to encourage innovation in these technologies system failures or gaps are identified in moving technologies along the innovation chain preventing their successful commercialisation sustained investment will be needed for these technologies to achieve their potential it is argued that a stable and consistent policy framework is required to help create the conditions for this in particular such a framework should be aimed at improving risk reward ratios for demonstration and pre commercial stage technologies this would enhance positive expectations stimulate learning effects leading to cost reductions and increase the likelihood of successful commercialisation