keeping up with the joneses who loses out when individuals compare themselves to those with the same wage rate status concerns keeping up with the joneses lead individuals to work who otherwise would have chosen not to and for them well being is a decreasing function of the wage rate

introducing cooperative push how inefficient environmental policy sometimes protects the global commons better in this paper we argue that the incentive structures of the gamesnations play in international environmental negotiations dependupon the choice of environmental policy instruments bargainingon the use of some instrument e g an effluent charge mayput the players into a dilemma game like chicken negotiationsto apply a different instrument say an emission reductionquota may lead to a cooperation game like stag hunt the higherthe incentive to cooperate in the type of game which is built upby a specific instrument the higher is this instrument s cooperative push of course comparing two instruments the one with the higher cooperative push might well be the lessefficient one in this paper we analyse a situation where thehigher cooperative push of an instrument overcompensates thisinstrument s lower efficiency aggregate welfare withbilateral cooperation the equilibrium of stag hunt is higher than withunilateral cooperation the equilibrium of the chicken game the question remains whether sovereign countries decide to playstag hunt ending up in the welfare superior equilibrium it isshown below that they do not in an uncoordinated optimising setting however we develop a particular frame where the proposedsolution meets the criteria of individual rationality stability and fairness it thereby establishes the politically mostdesired result international cooperation

taxation and the allocation of risk inside the multinational firm abstract this paper provides the first theoretical and empirical analysis of how taxation shapes the joint allocation of risk and profits inside the multinational firm theoretically we identify three mechanisms through which corporate taxes may shape the within firm allocation of risk 1 transfer pricing rules requiring risk to be compensated with higher expected returns create incentives to shift risk to low tax jurisdictions as a means to shift profits 2 risk averse owners create incentives to allocate risk to high tax affiliates to maximize risk sharing with governments 3 limited loss offset creates incentives to shift risk to affiliates in other countries empirically we show that multinational firms disproportionately allocate risk to low tax countries and that the key mechanism is the nexus between risk and profits established by transfer pricing rules within firm differences in risk explain a significant fraction of the well established correlation between profits and tax rates suggesting that risk shifting is a quantitatively non negligible channel for profit shifting

a model of demand with interactions among consumers abstract the aim of this paper is to study emergent patterns of demand when there are social interactions between different consumers specifically our concern is with the case in which consumers preferences are influenced by the consumption behaviour of others the analysis recognises three reference groups the first is a peer group of similar consumers with whom the individual interacts on a regular basis and with whom the individual desires to share some consumption activities the second is one or several contrast group s with which the individual seeks actively not to interact and from whom the individual wishes to distinguish himself herself the third is an aspirational group with whom the individual does not interact on a regular basis but wishes that he she did and with whom the individual would like to share consumption activities but cannot in this relatively simple model these groups influence the individual s behaviour the paper derives steady state and dynamic properties of the distribution of consumption over users the degree to which consumption is restricted to a small group of similar agents is determined by the strength of the contrast and aspiration effects these effects also drive the distribution away from the natural distribution i e the one that would prevail were consumers to consider only the properties of the good and not the actions of other consumers the paper discusses the potential application of this modeling framework in a large number of consumption settings

international taxation and the direction and volume of cross border m as we show that the parent subsidiary structure of multinational firms created by cross border mergers and acquisitions is affected by the prospect of international double taxation specifically the likelihood of parent firm location in a country following a cross border takeover is reduced by high international double taxation of foreign source income at the same time countries with high international double taxation attract smaller numbers of parent firms a unilateral elimination of worldwide taxation by the united states is simulated to increase the proportion of parent firms locating in the united states following cross border mergers and acquisitions from 53 to 58

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

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

determination of network rental components in a competitive electricity market the locational marginal pricing lmp based settlement results in a surplus collected by the system operator from the consumers the nonlinear transmission losses and the constrained operation of the power system due to operating limits such as power flow limits on transmission lines cause the accumulation of this surplus this accumulated revenue referred to as the network rental in this paper has two main components loss rental and constraint rental this paper develops a method to calculate these different rental components paid by each consumer by combining the power flow tracing and kkt optimality conditions this yields quantitative determination of how each consumer has overpaid in the form of loss rental and constraint rental which in turn can be used to get a better insight of how the rental is accumulated simple three and four bus systems are used to demonstrate the proposed method

a new transmission tariff allocation model based on bilevel programming this paper proposes a flow based approach for the transmission tariff allocation problem based on the notions of long run marginal cost lrmc and nodal exchange factors nefs a worst case power flow expressed in terms of nefs is formulated to characterize the system state additionally the nefs optimal values are determined considering a specific criterion to compute tariffs the resulting problem is formulated as a bilevel program the upper level is a worst case power flow that maximizes line flows taking into account the transmission tariffs computed in the lower level the criterion considered in the lower level aims to minimize the variation range of transmission tariffs which is particularly desirable to provide incentives for renewable sources installed far away from load centers the resulting bilevel problem may have multiple solutions here the uniqueness in tariffs is preserved by solving an alternative problem once both the generation dispatch and the variation range of transmission tariffs are known numerical results are provided for a 6 bus system and the ieee 118 bus system

fdi as an outcome of the market for corporate control theory and evidence abstract much foreign direct investment fdi takes the form of mergers and acquisitions m a it is commonplace in finance to view acquisitions as manifestations of the market for corporate control following on that insight we propose a model of fdi in which headquarters bid to control overseas assets we derive an equation for bilateral fdi stocks that resembles the recently developed fixed effects approach to modelling bilateral trade flows we estimate the model and use its parameters to construct benchmarks for evaluating multilateral inward and outward fdi

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

an evolutionary approach to norms iorms provide a powerful mechanism for regulating conflict in groups even when there are more than two people and no central authority this paper investigates the emergence and stability of behavioral norms in the context of a game played by people of limited rationality the dynamics of this new norms game are analyzed with a computer simulation based upon the evolutionary principle that strategies shown to be relatively effective will be used more in the future than less effective strategies the results show the conditions under which norms can evolve and prove stable one interesting possibility is the employment of metanorms the willingness to punish someone who did not enforce a norm many historical examples of domestic and international norms are used to illustrate the wide variety of mechanisms that can support norms including metanorms dominance internalization deterrence social proof membership in groups law and reputation

a more fair power flow based transmission cost allocation scheme considering maximum line loading for n 1 security this paper proposes an efficient approach to transmission fixed cost allocation in a pool based electricity market that takes into consideration n 1 secure annual system operation the optimal capacity of a transmission facility is defined as the maximum power flow the facility may face under a contingency situation for a certain system snapshot in this pricing approach for each time interval the largest optimal capacity of a transmission facility is calculated for all n 1 conditions considering a security constrained optimal power flow charges for each facility are based on the facility usage of the largest optimal capacity for all time intervals during one or more years network usage is determined by generalized distribution factors and three variations of the mw mile method for pricing counter flows are investigated for the proposed cost allocation method the three proposed pricing methods are applied to the ieee 24 bus reliability test system and compared with other pricing methods

repatriation taxes repatriation strategies and multinational financial policy abstract several investment repatriation strategies are added to the standard model of a multinational in which an affiliate is located in a low tax country and is limited to two alternatives repatriating taxable dividends to the parent or investing in its own real operations in our model affiliates can invest in passive assets which the parent can borrow against or in related affiliates which can be used as vehicles for tax favored repatriations we show analytically how the availability of alternative strategies can effect real investment throughout the worldwide corporation we use firm level data for us multinationals to test for the importance of alternative strategies the evidence is generally consistent with the theory particularly the strategies using related affiliates

evaluation of alternatives for power system coordination and pooling in a competitive environment the paper defines and classifies essential issues that relate the need for electric power system coordination with the increasing development of competition principles are formulated and a coordination model and a market structure are proposed emphasizing the need for economic dispatch in the wholesale market a detailed comparison is made of the market and pooling implementations developed in argentina and chile countries that have pioneered the creation of competitive markets in the electric energy sector an evaluation of strengths and weaknesses of those two implementations is included

international corporate tax avoidance a review of the channels magnitudes and blind spots this paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations it surveys evidence on main channels of corporate tax avoidance including transfer mispricing international debt shifting treaty shopping tax deferral and corporate inversions moreover it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting we find that the literature suggests that for the most recent year a 1 percentage point lower corporate tax rate compared to other countries will expand before tax income by 1 5 percent an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time the literature on tax avoidance still has several unresolved puzzles and blind spots that require further research

two price zones for the german electricity market market implications and distributional effects abstract we discuss the implications of two price zones i e one northern and one southern bidding area on the german electricity market in the northern zone continuous increases in capacity with low variable costs cause large regional supply surpluses in the market dispatch while in the southern zone conventional capacity decreases as the spatial imbalance of supply and load is increasing the current single bidding area more often results in technically infeasible market results requiring curative congestion management measures there is an ongoing discussion about the potential effects of introducing bidding zones in germany this paper applies an electricity sector model with network representation to analyze the system implications and the distributional effects of two bidding zones in the german electricity system in 2012 and 2015 results show a modest decrease in cross zonal re dispatch levels particularly in 2015 however overall network congestion and re dispatch levels increase in 2015 and also remain on a high level for two bidding zones results are very sensitive to more than two bidding zones and additional line investments illustrating the challenge to define stable price zones in a dynamic setting with two bidding areas prices in the model results increase in the southern zone and decrease in the northern zone the average price deviation grows from 0 4eur mwh in 2012 to 1 7eur mwh in 2015 with absolute values being significantly higher in hours when price differences occur stakeholders within zones are exposed to the price deviations to a different extent distributional effects are surprisingly small compared to the wholesale price or different network charges

evaluation of three methods proposed for the computation of inter tso payments in the internal electricity market of the european union parties to the internal electricity market of the european union iem decided in 2001 to abolish the method of pancaking of transmission tariffs for cross border transactions that was originally in place instead they have agreed to implement a system whereby national transmission tariffs provide access to the entire iem this system is supplemented by a scheme of inter tso payments however conflict may arise if the compensation that a country must pay another one is not in accordance with the electrical usage that the former is making of the grid of the latter for instance inter tso compensation methods itc methods implicitly allocate the cost of any existing or new transmission line therefore the adoption of an inefficient method may be an obstacle for building some needed regional grid investments consequently one should give careful consideration to the selection of the itc method this paper analyzes both qualitatively and quantitatively the implementation of the most relevant itc methods that have been considered so far in the european debate when assessing each method from a conceptual point of view considerable attention is devoted to the critical examination of its main underlying assumptions

tax competition when firms choose their organizational form should tax loopholes for multinationals be closed we analyze a sequential game between two symmetric countries when firms can invest in a multinational structure that confers tax savings governments are able to commit to long run tax discrimination policies before firms decisions are made and before statutory capital tax rates are chosen non cooperatively whether a coordinated reduction in the tax preferences granted to mobile firms is beneficial or harmful for the competing countries depends critically on the elasticity with which the firms organizational structure responds to tax discrimination incentives a model extension with countries of different size shows that small countries are likely to grant more tax preferences than larger ones along with having lower effective tax rates

allocation of expansion transmission costs areas of influence method versus economical benefit method the open access to the transmission network and the methods to allocate its costs are the key point that allows free competition in deregulated electric markets all existing allocation methodologies have advantages and disadvantages that depend on their own features the power system characteristics and the price structure of the market the comparison of network cost allocation methods has been the aim of many studies in order to improve them in this paper the analytical relation between areas of influence method and a method based on the economical benefit for allocation of transmission costs is presented common points of both methodologies are discussed as well as their advantages to be applied to pay transmission network expansions it is concluded that both methodologies are equivalent only under certain conditions

international taxation and multinational firm location decisions using a large international firm level data set we examine the separate effects of host and additional parent country taxation on the location decisions of multinational firms both types of taxation are estimated to have a negative impact on the location of new foreign subsidiaries the impact of parent country taxation is estimated to be sizeable consistent with its international discriminatory nature our results show that international double taxation by the parent country despite the general possibility of deferral of taxation until income repatriation is instrumental in shaping the structure of multinational enterprise

relocation of headquarters and international taxation about 6 of multinationals relocated their headquarters to another country in the 1997 2007 period this paper presents empirical evidence on the role of taxes in these relocation decisions it considers a sample of 140 multinationals that relocated their headquarters over the past decade and compares them to a control group of 1943 multinationals that did not relocate it is found that the additional tax due in the home country upon repatriation of foreign profits has a positive effect on the probability of relocation the empirical results suggest that an increase in the repatriation tax by 10 percentage points would raise the share of relocating multinationals by 2 2 percentage points equivalent to an increase in the number of relocations by more than one third furthermore the presence of controlled foreign corporation legislation also has a positive effect on the number of relocations

rational irrationality some economics of self management abstract the paper first reviews some of the main challenges posed to our received economic paradigm by a variety of behaviors documented by psychologists and discusses possible responses to this challenge it then describes a specific attempt at unifying a number of themes in social psychology using a parsimonious modeling of human behavior

environmental policy when consumers value conformity abstract we present a model of consumer behaviour when consumers value conformity and examine the implications for environmental policy the model shares a feature set out in dasgupta et al 2016 of having a structure of preferences for conformity which induces a mass of consumers to adhere exactly to a norm level of consumption clumping however we extend our previous analysis by analysing the conditions for the existence and potential uniqueness of consumption norms in doing so we introduce threshold effects whereby individuals adhere to a norm only if sufficiently many others do so taken together these have striking implications for environmental policy in the case where the norm good generates pollution emissions clumping means many individuals will not change behaviour unless the norm changes while threshold effects plus clumping means that it may be hard to change a norm we show that the use of pigovian taxes to control behaviour may be either ineffective or welfare reducing and that the optimal pigovian tax will work only if it is above some threshold level there are parameter values for which quantity based injunctive policies raise welfare relative to no intervention while optimal pigovian taxes would lower welfare

behavioral environmental economics promises and challenges environmental issues provide a rich ground for identifying the existence and consequences of human limitations in this paper we present a growing literature lying at the interface between behavioral and environmental economics this literature identifies alternative solutions to traditional economic instruments in environmental domains that often work imperfectly but it also faces a set of challenges including the difficulty of computing welfare effects and the identification of a robust environmental policy based on context dependent socio psychological effects we illustrate our critical discussion with two behavioral schemes that have been widely implemented green nudges and corporate environmental responsibility

toward choice theoretic foundations for behavioral welfare economics interest in behavioral economics has grown in recent years stimulated largely by accumulating evidence that the standard model of consumer decision making provides an inadequate positive description of human behavior behavioral models are increasingly finding their way into policy evaluation which inevitably involves welfare analysis no consensus concerning the appropriate standards and criteria for behavioral welfare analysis has emerged yet this paper summarizes our effort to develop a unified framework for behavioral welfare economics for a detailed discussion see bernheim and rangel 2007 one that can be viewed as a natural extension of standard welfare economics standard welfare analysis is based on choice not on utility or preferences in its simplest form it instructs the planner to respect the choices an individual would make for himself the guiding normative principle is an extension of the libertarian deference to freedom of choice which takes the view that it is better to give a person the thing he would choose for himself rather than something that someone else would choose for him we show that it is possible to extend the standard choice theoretic approach to welfare analysis to situations where individuals make inconsistent choices which are prevalent in behavioral economics

uniform marginal pricing for the remuneration of distribution networks a new method for distribution access via uniform pricing for the remuneration of distribution networks is presented the proposed approach merges in a unified framework the investments the optimal network operation requirements the effect of the price elasticity of demand and the application of hourly pricing for demand side management purposes hourly uniform marginal prices understood as tariffs of use of the network are obtained from maximum social welfare condition sending efficient signals to the utility and consumers related to the optimal operation of the grid and use of the energy at peak and valley hours this method is used in the context of a performance based ratemaking regulation to get model companies from operational optimized real networks capital fees are integrated in the marginal tariff of use by means of the new replacement value concept broadly used in yardstick competition the model is stated as a mixed integer linear optimization problem suitable to be solved through well known linear programming tools the methodology has been successfully tested in a 42 bus test distribution network

taxing away m a capital gains taxation and acquisition activity abstract capital gains taxation distorts the market for corporate control by imposing a cost on selling shareholders in acquisitions this lock in effect increases premiums required for deal completion preventing some m as from taking place at all we estimate the effect of capital gains taxation on the quantity of realized m a deals and compute the deadweight loss related to taxing these transactions we find that a one percentage point increase in the capital gains tax rate reduces acquisition activity by around 1 annually for the united states this implies unrealized synergy gains of 9 3 billion each year due to capital gains taxes

an incentive mechanism for electricity transmission expansion in mexico abstract this study proposes an incentive regulatory framework for expanding electricity transmission in mexico a two part pricing model is implemented within a combined merchant regulatory structure three cases are considered in the first a monopolist with postage stamp tariffs serves the whole country using uniform prices in the second case one firm holds a regional monopoly in each of the five electricity areas in the third a monopolist operates in all areas of the national electricity system and discriminates in the prices it charges in each of the regions this approach is described and then applied to the mexican electricity transmission network using real data the study compares all three cases in terms of profits capacity increases and network expansion the results are found to depend on two effects the economies of scale effect in which the maximum level is reached with a single network and the discriminatory effect that results when a firm can discriminate among types of consumers the economies of scale effect produces greater capacity and network expansion whereas the discriminatory effect increases profits

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

tobin s q and the gains from takeovers this paper analyzes the relation between takeover gains and the q ratios of targets and bidders for a sample of 704 mergers and tender offers over the period 1972 1987 target bidder and total returns are larger when targets have low q ratios and bidders have high q ratios the relation is strengthened after controlling for the characteristics of the offer and the contest this evidence confirms the results of the work by lang stulz and walkling and shows that their findings also hold for mergers and after controlling for other determinants of takeover gains in a recent paper lang stulz and walkling lsw 1989 document that the abnormal returns in tender offers are related to the tobin s q ratios of the targets and the bidders in particular they find that target bidder and total returns are higher when takeover targets have high q ratios and bidders have low q ratios where one is used as a cutoff point to separate high q firms from low q firms in fact bidders with high q ratios have significant positive abnormal returns when they engage in a takeover while bidders with low q ratios have significant negative abnormal returns the best takeovers in terms of value creation are those where a high q firm takes over a low q firm the opposite scenario holds for the worst case takeovers low q firms taking over high q firms if q is interpreted as a measure of managerial performance these findings imply that better performing firms also make better acquisitions and that more value can be created from taking over poorly performing companies while the results of lsw are insightful they leave a number of questions unanswered their sample consists only of tender offers several studies have documented that the returns to targets in mergers are smaller than those in tender offers see jensen and ruback 1983 and huang and walkling 1987 it would therefore be useful to see whether the lsw 1989 results hold for a larger sample which includes both mergers and tender offers previous research has also shown that the characteristics of the takeover hostile versus friendly and single versus multiple bidder the form of payment cash versus securities the time period before 1968 1968 1980 1981 and later and the relative size of target and bidder are important determinants of the magnitude of takeover gains and their distribution

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

consumer behaviour with environmental and social externalities implications for analysis and policy in this paper we summarise some of our recent work on consumer behaviour drawing on recent developments in behavioural economics particularly linked to sociol ogy as much as psychology in which consumers are embedded in a social context so their behaviour is shaped by their interactions with other consumers for the purpose of this paper we also allow consumption to cause environmental damage analysing the social context of consumption naturally lends itself to the use of game theoretic tools we shall be con cernedwithtwowaysinwhichsocialinteractionsaffectconsumerpreferencesandbehaviour socially embeddedpreferences wherethebehaviourofotherconsumersaffectanindividual s preferences and hence consumption we consider two examples conspicuous consumption and consumption norms and socially directed preferences where people display altruistic behaviour our aim is to show that building links between sociological and behavioural eco nomic approaches to the study of consumer behaviour can lead to significant and surprising implications for conventional economic analysis and policy prescriptions especially with respect to environmental policy

threshold models of interpersonal effects in consumer demand abstract whether one buys may be determined in part by how many others have when the correlation is positive we refer to bandwagon effects and when negative reverse bandwagons we construct demand schedules in the presence of such effects and with simple assumptions about supply investigate the existence of and approach to equilibrium stable price quantity equilibria exist but for many plausible parameter values equilibria are asymptotically unstable and system trajectories consist of cycles that can move with slight parameter changes via successive bifurcations into what has been called chaotic dynamics essentially indistinguishable from random noise these conditions occur despite assumptions of erfect information profit maximizing firms and utility maximizing individuals

allocation of fixed costs in distribution networks with distributed generation in this paper we propose a method for the allocation of fixed capital and nonvariable operation and maintenance costs at the medium voltage mv distribution level the method is derived from the philosophy behind the widely used mw mile methodology for transmission networks that bases fixed cost allocations on the extent of use that is derived from load flows we calculate the extent of use by multiplying the total consumption or generation at a busbar by the marginal current variations or power to current distribution factors pidfs that an increment of active and reactive power consumed or generated in the case of distributed generation at each busbar produces in each circuit these pidfs are analogous to power transfer distribution factors ptdfs unlike traditional tariff designs that average fixed costs on a per kwh basis across all customers the proposed method provides more cost reflective price signals and helps eliminate possible cross subsidies that deter profitable in the case of competition or cost effective in the case of a fully regulated industry deployment of dg by directly accounting for use and location in the allocation of fixed costs an application of this method for a rural radial distribution network is presented

recycling social norms and warm glow revisited we examine the role of social norms and warm glow in a theoretical framework and establish that improving the quality of recycling facilities for example through kerbside collection will elicit more recycling effort if warm glow is present drawing on the literature we model the role of social norms with reference to age profile ethnicity and geographical location of the reference group using english local authority data we show that a social norm for recycling does exist we find the expected relationship between the quality of kerbside provision and recycling activity if the household derives warm glow from the activity however it is insignificant amongst the control variables we find evidence that multifamily dwellings recycle less

marginal pricing of transmission services an analysis of cost recovery this paper presents an in depth analysis of network revenues computed with marginal pricing and in particular it investigates the reasons why marginal prices fail to recover the total incurred network costs in actual power systems the basic theoretical results are presented and the major causes of the mismatch between network costs and marginal revenues are identified and illustrated with numerical examples some tutorial and others of realistic size the regulatory implications of marginal network pricing in the context of competitive electricity markets are analyzed and suggestions are provided for the meaningful allocation of the costs of the network among its users

impact of network payment schemes on transmission expansion planning with variable renewable generation abstract a large number of studies have dealt with the transmission expansion planning tep problem however few investigations have focused on analyzing the impacts of network payment schemes on network configuration and the benefits losses distribution among the participants in electricity markets in this paper we propose a multi annual transmission expansion planning model considering four different network payment schemes to finance the construction of new transmission lines seeking to reduce the total system costs wind and solar power generation are included in the model taking into account their variability the proposed models are reformulated as mixed integer linear programming milp problems we use seven performance metrics related with congestion nodal prices and generator benefits among others to evaluate the effect of each payment scheme a realistic case study based on the main power system in chile is analyzed to illustrate the proposed models it is shown that integrating line cost recovering equations into the tep model may result into a more realistic and less congested power network also total system cost is highly related with transmission tariff discrimination in that way tariffs with high location dependence perform better in the case studied the chilean power system

a nash approach to planning merchant transmission for renewable resource integration major transmission projects are needed to integrate and to deliver renewable energy re resources cost recovery is a serious impediment to transmission investment a negotiation methodology is developed in this study to guide transmission investment for re integration built on nash bargaining theory the methodology models a negotiation between an re generation company and a transmission company for the cost sharing and recovery of a new transmission line permitting delivery of re to the grid findings from a six bus test case demonstrate the pareto efficiency of the approach as well as its fairness in that it is consistent with one commonly used definition of fairness in cooperative games the nash cooperative solution hence the approach could potentially be used as a guideline for re investors the study also discusses the possibility of using re subsidies to steer the negotiated solution towards a system optimal transmission plan that maximizes total net benefits for all market participants the findings suggest that re subsidies can be effectively used to achieve system optimality when re prices are fixed through bilateral contracts but have limited ability to achieve system optimality when re prices are determined through locational marginal pricing this limitation needs to be recognized in the design of re subsidies

u s worldwide taxation and domestic mergers and acquisitions a discussion abstract harris and o brien 2018 investigate whether u s tax policy distorts u s multinationals mncs investment they find that mncs facing higher repatriation tax costs engage in fewer domestic acquisitions the study re examines the results in two prior studies that found no effect hanlon et al 2015 and a positive effect martin et al 2015 by introducing a new proxy for repatriation tax costs a binary variable for whether the mnc uses the double irish structure we critique the theory underlying the prediction as well as the proxy we conclude that caution should be exercised in taking the results at face value

long run marginal cost pricing based on analytical method for revenue reconciliation incremental and marginal approaches are two different types of methods to price the use of networks the major difference between them is in the way they evaluate the costs imposed by network users the former calculates network charges through simulation and the latter derives charges with a sensitivity based analytical approach both charging models aim to send cost reflective economic signals to customers providing an economic climate for the cost effective development of networks in this paper a novel long run marginal cost lrmc pricing methodology based on analytical method is proposed to reflect the impacts on the long run costs imposed by a nodal injection through sensitivity analysis the sensitivity analysis consists of three partial differentiations 1 the sensitivity of circuit power flow with respect to nodal power increment 2 the sensitivity of the time to reinforce network with respect to changes in circuit power flows and 3 the sensitivity of present value of future reinforcement with respect to changes in time to reinforce two test systems are employed to illustrate the principles and implementation of the proposed method results from incremental and marginal approaches under different system conditions are compared and contrasted in terms of charges and tariffs the proposed method as demonstrated in the test systems can produce forward looking charges that reflect the extent of network utilization levels in addition to the distance that power must travel from points of generation to points of consumption furthermore the proposed method is able to provide further insights into factors influencing network charges

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

wheeling of power under deregulated environment of power system a bibilographical survey the power industry is moving rapidly from regulated conventional setup to a deregulated environment there is an urgent need to keep a track of international experiences and activities taking place in this emerging field this paper gives a bibliographical survey and general backgrounds of research and development in the field of power system wheeling under deregulated environment based on over 170 published articles wheeling in general and the establishment of wheeling rate in particular are subjects of extensive debate today this will be very much useful for all countries especially those developing countries which are moving toward the unbundling of electricity supply industry esi the collected literature have been divided into many section so that new researchers do not face any difficulty for obtaining literature particularly in the area of wheeling of power under deregulated environment

opinion dynamics and wisdom under conformity abstract we study a dynamic model of opinion formation in social networks in our model boundedly rational agents update opinions by averaging over their neighbors expressed opinions but may misrepresent their own opinion by conforming or counter conforming with their neighbors we show that an agent s social influence on the long run group opinion is increasing in network centrality and decreasing in conformity concerning efficiency of information aggregation or wisdom of the society it turns out that misrepresentation of opinions need not undermine wisdom but may even enhance it given the network we provide the optimal distribution of conformity levels in the society and show which agents should be more conforming in order to increase wisdom

climate change environmental and technology policies in a strategic context there are a number of features of climate change which make it one of the most challenging problems confronting policy makers and policy analysts in this paper we consider three such features i climate change is a global pollutant so there are strategic interactions between governments over climate policy ii cutting greenhouse gas emissions can have significant cost effects across a number of sectors of the economy raising concerns about the implications of climate change policy on competitive advantage iii the long time scales on which climate change operates means that an important dimension of climate change policy is policy towards r d to cut the costs of dealing with climate change in ulph and ulph 1996 ulph a ulph d 1996 in carraro c katsoulacos y xepapadeas a eds environmental policy and market structure kluwer dordrecht pp 181 208 we presented a model to analyse these issues but considered only environmental policies in this paper we extend that analysis to allow for both a richer set of policy instruments environmental and technology policies and a richer strategic context

capital gains taxation and the cost of capital evidence from unanticipated cross border transfers of tax base abstract in a cross border takeover the tax base associated with future capital gains is transferred from target shareholders to acquirer shareholders cross country differences in capital gains tax rates enable us to estimate the discount in target valuation on account of future capital gains we estimate that a 1 percentage point increase in the capital gains tax rate reduces the value of equity by around 0 3 which suggests that the capital gains tax significantly raises firms cost of capital furthermore we find that the implied capital gains tax burden is higher at times of high economic growth and low stock market valuation

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

moral behaviour altruism and environmental policy free riding is often associated with self interested behaviour however if there is a global pollutant free riding will arise if individuals calculate that their emissions are negligible relative to the total so total emissions and hence any damage that they and others suffer will be unaffected by whatever consumption choice they make in this context consumer behaviour and the optimal environmental tax are independent of the degree of altruism for behaviour to change individuals need to make their decisions in a different way we propose a new theory of moral behaviour whereby individuals recognise that they will be worse off by not acting in their own self interest and balance this cost off against the hypothetical moral value of adopting a kantian form of behaviour that is by calculating the consequences of their action by asking what would happen if everyone else acted in the same way as they did we show that a if individuals behave this way then altruism matters and the greater the degree of altruism the more individuals cut back their consumption of a dirty good b nevertheless the optimal environmental tax is exactly the same as that emerging from classical analysis where individuals act in self interested fashion

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

foreignness and exit over the life cycle of firms received wisdom indicates that owing to a liability of foreignness foreign firms exit with greater likelihood than do comparable domestic firms and that the difference attenuates as firms age and overcome the liability we posit that foreign firms are also intrinsically more volatile and footloose than domestic ones and that this leads to an increasing divergence between the exit rates of foreign and domestic firms empirically we find that the difference between exit rates of foreign firms and domestic firms increases with age as exit of foreign firms increases with age while that of purely domestic firms decreases exit rates of domestic based multinationals do not change significantly with age they are between those of foreign and purely domestic firms but are closer to the latter this suggests that the footlooseness observed for foreign firms is due to foreignness more than to multinationality

no man is an island social coordination and the environment humans are fundamentally social social activities require coordination possibly leading to multiple equilibria in the form of self reinforcing patterns of herd behavior when alternative equilibria differ substantially with respect to environmental damage they represent virtuous and vicious cycles from an environmental perspective such cycles can be sustained by network effects social pressure to conform or other mechanisms directly or indirectly yielding coordination benefits breaking the vicious cycles can be an important task for environmental policies i present a stylized model of social coordination with environmental externalities using it to discuss how environmental policies may help agents coordinate in more environment friendly ways

who bears the burden of international taxation evidence from cross border m as cross border m as can trigger additional taxation of the target s income in the form of non resident dividend withholding taxes and acquirer country corporate income taxation this paper finds that this additional international taxation is fully capitalized into lower takeover premiums in contrast acquirer excess stock market returns around the bid announcement date do not appear to reflect additional taxation of the target s income these findings suggest that international taxation is considered to be burdensome and that the incidence of this taxation is primarily on target firm shareholders

solving the revenue reconciliation problem of distribution network providers using long term marginal prices in this paper the authors describe an integrated methodology to compute long term marginal prices in distribution networks long term marginal prices are considered the most interesting and economically sound way of allocating network costs to users additionally they inherently deal with the revenue reconciliation problem as they generally do not require other large supplementary tariff terms the proposed methodology uses fuzzy sets to model uncertainties in load forecasts and considers several criteria to guide the identification of solutions at the end there is a final decision making step to select the most adequate expansion plan according to the preferences of the decision maker

cost of transmission system usage based on an economic measure throughout today s unbundled power systems it is assumed that the transmission system is a natural monopoly and therefore it should be regulated to compensate for the revenue requirements of the owners of the transmission system and encourage its future expansion transmission pricing schemes should be designed fairly also the schemes must aim to achieve the objective of maintaining system security by encouraging proper operation and maintenance of existing and investment in new facilities in this paper based on a simple economic principle a novel method for allocation of the fixed cost of the transmission system to agents using these facilities is developed this new method introduces the concept of critical capacity of a line and considers congestion in the transmission system to allocate the share of the transmission system revenue requirement that each agent has to provide identifying and charging the agents who cause congestion is very important as it sends the correct economic signal to transmission network users this is a novel feature of this method thus making it most suitable for systems where congestion does occur we also point out briefly the reliability concerns of the new method a simple eight bus network representative of the pjm iso system together with its market pricing mechanism is used as a competitive power system to illustrate the main features of the proposed method

repatriation taxes and outbound m as repatriation taxes reduce the competitiveness of multinational firms from tax credit countries when bidding for targets in low tax countries this comparative disadvantage with respect to bidders from exemption countries violates ownership neutrality which results in production inefficiencies due to second best ownership structures this paper empirically estimates the magnitude of these effects the abolishment of repatriation taxes in japan and in the u k in 2009 has increased the number of acquisitions abroad by japanese and british firms by 16 1 and 1 6 respectively a similar policy switch in the u s is simulated to increase the number of u s cross border acquisition by 11 0 the yearly gain in efficiency is estimated to be 108 9 million dollar due to the japanese reform and 3 9 million dollar due to the u k reform simulating such a reform for the u s results in a yearly efficiency gain of 537 0 million dollar

a simple regulatory incentive mechanism applied to electricity transmission pricing and investment the informationally simple approach to incentive regulation applies mechanisms that translate the regulator s objective function into the firm s profit maximizing objective these mechanisms come i

on distributive effects of optimal regulation for power grid expansion to date the distributive implications of incentive regulation on electricity transmission networks have not been explicitly studied in the literature more specifically the parameters that a regulator might use to achieve distributive efficiency under price cap regulation have not yet been identified to discern these parameters is the motivation for the research presented in this paper we study how different weight parameters affect the distributive characteristics of optimal price cap incentive regulation for electricity transmission we find that a regulator s use of ideal laspeyres weights tends to be more beneficial for the transco consumers than for consumers the transco

research on bonus penalty mechanism of pollution abatement a case study of the northeastern region of china abstract as china s environmental governance turn to a high quality management establishing reasonable and effective bonus penalty mechanism is an effective means to promote coordinated emission reduction and improve regional air quality therefore this paper constructs a bi level programming model with bonus penalty standards and emission quotas based on the maximization of social benefits and the minimization of the gap between reward and punishment funds given the np hard problem of bi level programming model this work also designs a nested hierarchical particle swarm optimization hpso algorithm for the above model subsequently from the emission data of so2 and macroeconomic data in the northeastern region of china from 2006 to 2015 the so2 emission quota and bonus penalty standards of each province are calculated the results demonstrate that 1 the optimal emission quotas of heilongjiang jilin and liaoning province are 37 7 30 3 and 69 3 10 000 tons respectively 2 when the compensation fee of pollutant abatement is set at 521 48 yuan ton and the standard of excess discharge levy is 2977 43 yuan ton the effect of pollution control in each province can be effectively improved the empirical analysis also reveals that the proposed model has a remarkable effect on regional environmental governance finally this paper puts forward some suggestions on the implementation of the bonus penalty mechanism

cross border investing with tax arbitrage the case of german dividend tax credits german dividends typically carry a tax credit which makes the dividend worth 42 86 more to a taxable german shareholder than to a tax exempt or foreign shareholder this results in a penalty for foreign investors who buy and hold german dividend paying stocks i document that as a result of the credit the ex day drop exceeds the dividend by more than one half of the tax credit and show that futures and option prices embed more than one half of the tax credit the existence of the credit creates opportunities for cross border tax arbitrage in which foreign holders of german stock transfer the dividend to german shareholders and implies that it is tax efficient for foreign investors to hold derivatives rather than investing directly in german stocks the empirical findings are consistent with costly tax arbitrage activity by german investors who face tax risk due to antiarbitrage rules since dividend tax credits exist in many other countries the findings are potentially of broad interest

international profit shifting within multinationals a multi country perspective abstract we model the opportunities and incentives generated by international tax differences for international profit shifting by multinationals the model considers not only profit shifting arising from international tax differences between affiliates and parent companies but also from tax differences between affiliates in different host countries our model yields the prediction that a multinational s profit shifting in a country depends on a weighted average of international tax rate differences between all countries where the multinational is active using a unique dataset containing detailed firm level information on the parent companies and subsidiaries of european multinationals and information about the international tax system we test our model and empirically examine the extent of intra european profit shifting by european multinationals on average we find a semi elasticity of reported profits with respect to the top statutory tax rate of 1 3 while shifting costs are estimated to be 0 6 of the tax base international profit shifting leads to a substantial redistribution of national corporate tax revenues many european nations appear to gain revenues from profit shifting by multinationals largely at the expense of germany

altruism in the family and selfishness in the market place adam smith argued in a famous passage that people are selfish in their market transactions it is not from the benevolence of the butcher the brewer or the baker that we expect our dinner but from their regard to their own interest we address ourselves not to their humanity but to their self love and never talk to them of our own necessities but of their advantages 1937 p 14 in an earlier study he said with irony we are not ready to suspect any person of being defective in selfishness 1853 p 446 selfishness in market transactions has been assumed in practically all subsequent discussions of the economic system objections were dismissed with vague allusions to human nature or with an assertion that altruism loses out to selfishness in the struggle to survive in the market sector yet altruism is generally recognized to be important within a family again adam smith said

coordination of generation and transmission development through generation transmission charges a game theoretical approach transmission charges aim to recover the cost of transmission network investments and provide efficient locational signals to new generators in this paper we investigate the effect of these charges on the development of new generation capacities in the system generation expansion planning is decided by strategic generation planners sgps trying to maximize their profits while transmission line investments are planned by a central planner and regulatory body aimed at minimizing the overall operation and network investment costs of the system regulatory transmission charges rtcs are calculated according to the marginal responsibility of generation investment on transmission network investment costs an iterative algorithm is proposed to model the interaction taking place between the central planner and sgps the developed methodology is applied to a 2 node illustrative example and the ieee rts96 and effects of rtcs on investment decisions of sgps are analyzed