nonlinear pricing in an oligopoly market the case of specialty coffee firms that use nonlinear pricing may distort product characteristics away from their efficient levels this paper offers the first empirical study of this issue using data from a specialty coffee market i estimate a structural utility model to compute consumers benefits from changing products sizes i then compare the estimated benefits to cost data design distortions are relatively large for products not targeted to the highest demand consumers distortions decrease toward zero with drink size for products with the largest profit margins these results support some of the central predictions from nonlinear pricing theory including no distortion at the top

short term optimal wind power generation capacity in liberalized electricity markets mainly because of environmental concerns and fuel price uncertainties considerable amounts of wind based generation capacity are being added to some deregulated power systems the rapid wind development registered in some countries has essentially been driven by strong subsidizing programs since wind investments are commonly isolated from market signals installed wind capacity can be higher than optimal leading to distortions of the power prices with a consequent loss of social welfare in this work the influence of wind generation on power prices in the framework of a liberalized electricity market has been assessed by means of stochastic simulation techniques the developed methodology allows investigating the maximal wind capacity that would be profitably deployed if wind investments were subject to market conditions only for this purpose stochastic variables determining power prices are accurately modeled a test system resembling the size and characteristics of the german power system has been selected for this study the expected value of the optimal short term wind capacity is evaluated for a considerable number of random realizations of power prices the impact of dispersing the wind capacity over statistical independent wind sites has also been evaluated the simulation results reveal that fuel prices installation and financing costs of wind investments are very influential parameters on the maximal wind capacity that might be accommodated in a market based manner

wind power in the danish liberalised power market policy measures price impact and investor incentives wind power has a strong position at the danish electricity market mainly caused by high feed in tariffs in the 1990s investments in new wind power installations on land however have declined dramatically after the danish electricity market was liberalised in 1999 first the paper describes how policy measures directed towards wind power have been redesigned to match the liberalised market then we estimate the impact of the redesigned tariffs on the electricity prices finally we assess whether the new tariffs make an incentive to invest in wind power the paper concludes that the new tariffs not by itself make evidence for the actual danish recession in new wind power installations after the electricity reform the main causes could include a combination of problems in spatial planning high risk aversion of new wind turbine investors and perhaps more favourable support schemes in other countries

the impact of wind power generation on the electricity price in germany abstract this paper investigates the relationship between intermittent wind power generation and electricity price behaviour in germany using a garch model i evaluate the effect of wind electricity generation on the level and the volatility of the electricity price in an integrated approach the results show that variable wind power reduces the price level but increases its volatility this paper s results also indicate that regulatory change has stabilised the wholesale price the electricity price volatility has decreased in germany after a modification of the marketing mechanism of renewable electricity this gives confidence that further adjustments to regulation and policy may foster a better integration of renewables into the power system

combining day ahead forecasts for british electricity prices abstract this paper considers how well the approach of combining forecasts extends to the context of electricity prices with the increasing popularity of regime switching and time varying parameter models for predicting power prices the multi model and evolutionary considerations that usually support the combining of simpler time series methods may be less applicable when the individual models incorporate these features we address this question with a backtesting analysis on british day ahead prices furthermore given the volatility of power prices and concerns about accurate forecasting under extreme price excursions we evaluate the results using various error metrics including expected shortfall the comparisons are furthermore carefully simulated to consider model selection uncertainty in order to realistically test the value of combining as an ex ante policy overall our results support combining for both accurate operational planning and risk management

sales quantity surcharge and consumer inattention quantity surcharges occur when retailers carry a product in two sizes and offer a promotion on the small size the large size then costs more per unit than the small one when quantity surcharges occur sales of the large size decline only slightly even though the same quantity can be purchased for less we document this behavior in two data sets and four product categories it is consistent with the notion of passive shoppers found in the industrial organization literature and the notion of rational inattention in macroeconomics we discuss implications for consumer decision making demand estimation and firm pricing

sugar and structural change in the cuban economy abstract diversification of the economy away from sugar was high among the economic priorities of the cuban revolutionary government in power since 1959 this essay explores whether sugar s role in the structure of the economy has in fact changed significantly in the last 25 years or so by examining three aspects of structural change specialization in production export concentration and effects of changes in world sugar market prices on economic growth the analysis suggests that policies of the revolutionary government have had a marginal impact in reducing sugar s role plans to increase sugar production and exports through the end of the century virtually assure that sugar will continue to play a predominant role in the economy

variance stabilizing transformations for electricity spot price forecasting most electricity spot price series exhibit price spikes these extreme observations may significantly impact the obtained model estimates and hence reduce efficiency of the employed predictive algorithms for markets with only positive prices the logarithmic transform is the single most commonly used technique to reduce spike severity and consequently stabilize the variance however for datasets with very close to zero like the spanish or negative like the german prices the log transform is not feasible what reasonable choices do we have then to address this issue we evaluate 16 variance stabilizing transformations within a comprehensive forecasting study involving two model classes regression models neural networks and 12 datasets from diverse power markets we show that the probability integral transform combined with the standard gaussian distribution yields the best approach significantly better than many of the considered alternatives

patterns of retail price variation we examine retail price variation across a range of goods and regions of the united states we find that the typical grocery product has a regular price and stays at that price at least 50 of the time and that most deviations from that regular price are downward temporary discounts or sales while infrequent account for 20 to 50 of the annual variation in retail prices for most product categories although existing models of retail sales yield predictions consistent with some aspects of the retail pricing distributions all of these models fail to explain other important aspects of retail pricing identified here

paying not to go to the gym how do consumers choose from a menu of contracts we analyze a novel dataset from three u s health clubs with information on both the contractual choice and the day to day attendance decisions of 7 752 members over three years the observed consumer behavior is difficult to reconcile with standard preferences and beliefs first members who choose a contract with a flat monthly fee of over 70 attend on average 4 3 times per month they pay a price per expected visit of more than 17 even though they could pay 10 per visit using a 10 visit pass on average these users forgo savings of 600 during their membership second consumers who choose a monthly contract are 17 percent more likely to stay enrolled beyond one year than users committing for a year this is surprising because monthly members pay higher fees for the option to cancel each month we also document cancellation delays and attendance expectations among other findings leading explanations for our findings are overconfidence about future self control or about future efficiency overconfident agents overestimate attendance as well as the cancellation probability of automatically renewed contracts our results suggest that making inferences from observed contract choice under the rational expectation hypothesis can lead to biases in the estimation of consumer preferences

price competition under limited comparability this paper studies market competition when firms can influence consumers ability to compare market alternatives through their choice of price formats we introduce random graphs as a tool for modelling limited comparability of formats our main results concern the interaction between firms equilibrium price and format decisions and its implications for industry profits and consumer switching rates we show that narrow regulatory interventions that aim to facilitate comparisons may have adverse consequences for consumer welfare finally we argue that our limited comparability approach provides a new perspective into the phenomenon of product differentiation

do consumers correctly expect price reductions testing dynamic behavior the assumption that consumers are fully rational and hold correct price expectations is demanding in dynamic settings we claim that it is testable provided that market level data on prices and purchases are available we find that consumers hold simple expectations regarding the timing of promotions for music albums consumers act as if they were aware of reductions but did not revise their beliefs over time the anticipation effect due to strategically delaying purchase amounts to 1 5 of the decision to purchase during regular periods these results have implications in terms of demand estimation optimal pricing and welfare computations

economic and technical challenges of flexible operations under large scale variable renewable deployment abstract fundamental characteristics of solar and wind power have generated controversy about their economic competitiveness and appropriate techniques for assessing their value this research presents an approach to quantify the economic value of variable renewable capacity and demonstrates its dependence on renewable deployment levels regional resource endowments fleet flexibility and trade assumptions it assesses economic and technical impacts of large scale renewable penetration by linking two models representing electric sector investments and detailed operations model results for california and texas suggest that operational constraints and costs of dispatchable generators e g minimum load levels ramping limits startup costs can impact renewable integration costs but the temporal and spatial variability of solar and wind are larger determinants of their value restrictions on transmission and regional coordination in capacity planning and dispatch decrease the economic value of variable renewable energy highlighting the potential roles of market design and trade energy storage is shown to be a valuable balancing asset at higher solar and wind penetration levels but potential revenues diminish with increased storage deployment

trade debt and the cuban economy abstract like many other latin american countries cuba pursued a strategy of debt led growth in the mid 1970s and sustained large balance of payments deficits with the west though external balance was restored by 1979 cuba faced a severe liquidity crisis in 1982 when short term loans were suddenly withdrawn this paper is a study of cuba s seemingly exceptional ability to decrease its foreign debt after 1980 meet interest payments on time and maintain an overall program of growth with equity a combination of implicit soviet trade subsidies and cuba s socialist polity and political economic control have apparently mitigated the constraints of the world capitalist system and fostered an alternative program to the current austerity measures of most of latin america

renewable generation and electricity prices taking stock and new evidence for germany and austria abstract economic theory predicts that the increase of renewable electricity production should reduce the price of electricity in the short run which is also known as the merit order effect although the merit order effect is only one of several consequences of renewable production on the electricity system it is crucial to determine its size for the economic evaluation of renewable energies in this paper we present a comprehensive overview of relevant past research results on the price effect of renewables additionally we conduct a new empirical analysis of the price effect of renewable production for the austrian german region a market that clearly qualifies for a merit order effect analysis given its characteristics based on the review and our own analysis we show that the merit order effect varies depending on the region and the assessment method chosen we also find that the size of this effect is less dispersed throughout different markets than previously suggested by the literature

on the market impact of wind energy forecasts this paper presents an analysis of how day ahead electricity spot prices are affected by day ahead wind power forecasts demonstration of this relationship is given as a test case for the western danish price area of the nord pool s elspot market impact on the average price behaviour is investigated as well as that on the distributional properties of the price by using a non parametric regression model to assess the effects of wind power forecasts on the average behaviour the non linearities and time variations in the relationship are captured well and the effects are shown to be quite substantial furthermore by evaluating the distributional properties of the spot prices under different scenarios the impact of the wind power forecasts on the price distribution is proved to be considerable the conditional price distribution is moreover shown to be non gaussian this implies that forecasting models for electricity spot prices for which parameters are estimated by a least squares techniques will not have gaussian residuals hence the widespread assumption of gaussian residuals from electricity spot price models is shown to be inadequate for these model types the revealed effects are likely to be observable and qualitatively similar in other day ahead electricity markets significantly penetrated by wind power

impact of renewables on electricity markets do support schemes matter abstract rising renewable shares influence electricity markets in several ways among others average market prices are reduced and price volatility increases therefore the missing money problem in energy only electricity markets is more likely to occur in systems with high renewable shares nevertheless renewables are supported in many countries due to their expected benefits the kind of support instrument can however influence the degree to which renewables influence the market while fixed feed in tariffs lead to higher market impacts more market oriented support schemes such as market premiums quota systems and capacity based payments decrease the extent to which markets are affected this paper analyzes the market impacts of different support schemes for this purpose a new module is added to an existing bottom up simulation model of the electricity market in addition different degrees of flexibility in the electricity system are considered a case study for germany is used to derive policy recommendations regarding the choice of support scheme

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

directional accuracy forecasting error and the profitability of currency trading model based evidence three models the flexible price monetary model ppp and a univariate arima model are estimated for 45 currency pairs to find out if the profitability of forecasting based currency trading is more related to the ability of the underlying model to predict the direction of change than the magnitude of the forecasting error theoretical considerations show that a correct prediction of the direction of change is neither a necessary nor a sufficient condition for a profitable trade the results of the exercise indicate that profitability is more strongly correlated with directional accuracy than with the magnitude of the error

forecasting day ahead electricity spot prices the impact of the exaa to other european electricity markets abstract in our paper we analyze the relationship between the day ahead electricity price of the energy exchange austria exaa and other day ahead electricity prices in europe we focus on markets which settle their prices after the exaa which enables traders to include the exaa price into their calculations for each market we employ econometric models to incorporate the exaa price and compare them with their counterparts without the price of the austrian exchange by employing a forecasting study we find that electricity price models can be improved when exaa prices are considered

on the economics of renewable energy sources abstract with the global expansion of renewable energy re technologies the provision of optimal re policy packages becomes an important task we review pivotal aspects regarding the economics of renewables that are relevant to the design of an optimal re policy many of which are to date unresolved we do so from three interrelated perspectives that a meaningful public policy framework for inquiry must take into account first we explore different social objectives justifying the deployment of re technologies and review model based estimates of the economic potential of re technologies i e their socially optimal deployment level second we address pivotal market failures that arise in the course of implementing the economic potential of re sources in decentralized markets third we discuss multiple policy instruments curing these market failures our framework reveals the requirements for an assessment of the relevant options for real world decision makers in the field of re policies this review makes it clear that there are remaining white areas on the knowledge map concerning consistent and socially optimal re policies

portfolio choice attention allocation and price comovement abstract this paper models the attention allocation of portfolio investors investors choose the composition of their information subject to an information flow constraint given their expected investment strategy in the next period which is to hold a diversified portfolio in equilibrium investors choose to observe one linear combination of asset payoffs as a private signal when investors use this private signal to update information about two assets changes in one asset affect both asset prices and may lead to asset price comovement the model also has implications for the transmission of volatility shocks between two assets

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

large scale wind power integration and wholesale electricity trading benefits estimation via an ex post approach abstract the integration of large scale wind power has brought about a series of challenges to the power industry but at the same time a number of benefits are being realized among those the ability of wind power to cause a decline in the electricity market prices has been recognized in quantifying this effect some models used in recent years are based on simulations of the market supply side and the price clearing process the accuracy of the estimates depend on the quality of the input data the veracity of the adopted scenarios and the rigorousness of the solution technique in this work a series of econometric techniques based on actual ex post wind power and electricity price data are implemented for the estimation of the impact of region wide wind power integration on the local electricity market clearing prices and the trading savings that stem from this effect the model is applied to the case of spain where the estimated savings are compared against actual credit and bonus expenses to ratepayers the implications and extent of these results for current and future renewable energy policy making are discussed

impacts of a common green certificate market on electricity and co2 emission markets in the nordic countries abstract the purpose of this study is to analyze the effects of introducing a common nordic system for tradable green certificates tgcs on the electricity market and a future market for tradable co 2 emission permits teps in the analysis the energy system model generator markal was used to model the electricity and district heating supply systems in the four nordic countries sweden norway finland and denmark it is shown that the introduction of tgc quotas reduces wholesale electricity and tep prices the impact on the latter is very pronounced retail electricity prices may become lower or higher depending on the tgc quota than if obligations to fulfill tgc quotas were absent the tgc scheme s efficiency in reducing a specific amount of co 2 emissions is also compared to the corresponding efficiency of a tep scheme involving a broader range of technologies furthermore obligations to fulfill tgc quotas affect investment incentives for new non renewable electricity supply this seems especially true for gas fired power plants finally it is indicated that electricity supply based on biomass combustion dominates the tgc scheme at least in the short run

financial optimization in the turkish electricity market markowitz s mean variance approach abstract electricity constitutes the input into many products that produced by industry and used by people hence it can be considered as a product or service that has vital importance in human life and economy since it has such special properties of instantaneous production and consumption obligation and unfeasible storage electricity market is not like other markets in a competitive electricity market generation company faces price risks and delivery risks so that risk management is an important part of a generation company and can deeply effect companies profitability this paper focuses on electricity generation asset allocation between bilateral contracts such as forward contracts and daily spot market considering constraints of generating units and spot price risks the problem is to find the optimal portfolio based on known electricity generation total costs bilateral contract prices it employed turkish historical balanced market hourly system marginal and day ahead hourly market prices between of 2006 and 2011 there are limited studies about portfolio optimization in electricity markets in literature and this paper should be considered frontier study taking spot market s hourly prices separately as risky assets markowitz mean variance optimization which is claimed to be the beginning of modern portfolio theory in financial sector is used to demonstrate this approach mean variance optimization has been successfully applied to all cases that modeled for electricity market some suggestions for future work are also listed in this paper

the private and public economics of renewable electricity generation generating electricity from renewable sources is more expensive than conventional approaches but reduces pollution externalities analyzing the tradeoff is much more challenging than often presumed because the value of electricity is extremely dependent on the time and location at which it is produced which is not very controllable with some renewables such as wind and solar likewise the pollution benefits from renewable generation depend on what type of generation it displaces which also depends on time and location without incorporating these factors cost benefit analyses of alternatives are likely to be misleading other common arguments for subsidizing renewable power green jobs energy security and driving down fossil energy prices are unlikely to substantially alter the analysis the role of intellectual property spillovers is a strong argument for subsidizing energy science research but less persuasive as an enhancement to the value of installing current renewable energy technologies

estimating the value of wind energy using electricity locational marginal price abstract there is an increasing interest in adding renewables such as wind to electricity generation portfolios in larger amounts as one response to concern about atmospheric carbon emissions from our energy system and the resulting climate change most policies with the aim of promoting renewables e g rps fit do not explicitly address siting issues which for wind energy are currently approached as the intersection of wind resource land control and transmission factors this work proposes the use of locational marginal price lmp the location and time specific cost of electricity on the wholesale market to signal locations where generation can address electricity system insufficiency after an examination of the spatial and temporal behavior of lmp in michigan over the first two years of wholesale market operation this work combines lmp with wind speed data to generate a value metric high value sites in michigan tend to be sites with higher wind speeds with the bulk of value accruing in the fall and winter seasons

the merit order effect a detailed analysis of the price effect of renewable electricity generation on spot market prices in germany the german feed in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies critics state that the costs for consumers are too high an important aspect to be considered in the discussion is the price effect created by renewable electricity generation this paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in germany the central aspect to be analysed is the impact of renewable electricity generation on spot market prices the results generated by an agent based simulation platform indicate that the financial volume of the price reduction is considerable in the short run this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits in the case of the year 2006 the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

package size and price discrimination in the paper towel market abstract estimates from a structural model of consumer behavior and firm conduct are used to decompose the extent to which quantity discounts for paper towels are consistent with second degree price discrimination as opposed to cost differences across sizes counterfactual exercises assuming that firms offer only one package size or charge uniform prices across sizes indicate that competition in the multi roll package size segment results in increased consumer surplus and lower prices for all consumers

collusion with intertemporal price dispersion we develop a theory of optimal collusive intertemporal price dispersion dispersion clouds consumer price awareness encouraging firms to coordinate on dispersed prices our theory generates a collusive rationale for price cycles and sales patient firms can support optimal collusion at the monopoly price for less patient firms monopoly prices must be punctuated with fleeting sales the most robust structure involves price cycles that resemble edgeworth cycles low consumer attentiveness enhances the effectiveness of price dispersion by reducing the payoff to deviations involving price reductions however for sufficiently low attentiveness price rises are also a concern

the impact of renewable energies on eex day ahead electricity prices in this paper we analyze the impact of renewable energies wind and photovoltaic on the formation of day ahead electricity prices at eex we give an overview of the policy decisions concerning the promotion of renewable energy sources in germany and discuss their consequences on day ahead prices an analysis of electricity spot prices reveals that the introduction of renewable energies enhances extreme price changes in the frame of a dynamic fundamental model we show that there has been a continuous electricity price adaption process to market fundamentals furthermore the fundamental drivers of prices differ among hours with different load profiles our results imply that renewable energies decrease market spot prices and have implications on the traditional fuel mix for electricity production however the prices for the final consumers increased overall because they must pay in addition the feed in tariffs for the promotion of renewable energy

the market value of variable renewables the effect of solar wind power variability on their relative price this paper provides a comprehensive discussion of the market value of variable renewable energy vre the inherent variability of wind speeds and solar radiation affects the price that vre generators receive on the market market value during windy and sunny times the additional electricity supply reduces the prices because the drop is larger with more installed capacity the market value of vre falls with higher penetration rate this study aims to develop a better understanding on how the market value with penetration and how policies and prices affect the market value quantitative evidence is derived from a review of published studies regression analysis of market data and the calibrated model of the european electricity market emma we find the value of wind power to fall from 110 of the average power price to 50 80 as wind penetration increases from zero to 30 of total electricity consumption for solar power similarly low value levels are reached already at 15 penetration hence competitive large scale renewable deployment will be more difficult to accomplish than as many anticipate

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

the timing of sales this paper presents a model of intertemporal price discrimination a fixed number of sellers produce a homogeneous good consumers with different preferences enter the market in each period and leave when they make a purchase the sellers typically vary their prices over time charging a high price in most periods but occasionally cutting the price to sell to a large group of customers with a low reservation price in some equilibria all stores lower their price at the same time and to the same level

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

decomposing the sales promotion bump with store data sales promotions generate substantial short term sales increases to determine whether the sales promotion bump is truly beneficial from a managerial perspective we propose a system of store level regression models that decomposes the sales promotion bump into three parts cross brand effects secondary demand cross period effects primary demand borrowed from other time periods and category expansion effects remaining primary demand across four store level scanner datasets we find that each of these three parts contribute about one third on average one extension we propose is the separation of the category expansion effect into cross store and market expansion effects another one is to split the cross item effect total across all other items into cannibalization and between brand effects we also allow for a flexible decomposition by allowing all effects to depend on the feature display support condition and on the magnitude of the price discount the latter dependence is achieved by local polynomial regression we find that feature supported price discounts are strongly associated with cross period effects while display only supported price discounts have especially strong category expansion effects while the role of the category expansion effect tends to increase with higher price discounts the roles of cross brand and cross period effects both tend to decrease

determining commercially viable two way and one way contract for difference strike prices and revenue receipts abstract in this article we investigate the role that a contract for difference cfd might play in increasing investment in renewable energy in australia two cfd schemes are investigated two way and one way cfd a financial model is developed that determines commercially viable cfd strike prices account is taken of revenue from wholesale electricity market and renewable energy certificate sales capital and operational costs of the project including distribution of funds to holders of equity and debt are also included findings based on analysis of the solar array located at the university of queensland gatton campus in australia is presented employing a typical meteorological year framework the major finding was that government will prefer a two way cfd scheme and single axis tracking solar pv array technology in contrast project proponents will strongly prefer a one way cfd design

do support systems for res e reduce eu ets driven electricity prices abstract support systems for electricity from renewable energy sources res e can reduce electricity prices which have also been influenced by a co2 emission trading scheme ets additional res e substitutes electricity from fossil fuels and thus co2 emissions are reduced the demand for emission reductions is lowered as a result the co2 price is also reduced consequently the wholesale price for electricity decreases however most res e support systems are financed via the electricity market which increases the retail electricity price an assessment for germany shows that retail electricity prices in the first trading period of the eu ets 2005 2007 are lowered by 2 6 euro mwh due to additional res e considering the complete eu the effect is substantially higher this paper describes the effect and the influence of different policy designs it develops an approach for assessing the effect and applies it for the case of germany and roughly estimates the effect for the eu

sales and consumer inventory temporary price reductions sales are common for many goods and naturally result in a large increase in the quantity sold we explore whether the data support the hypothesis that these increases are at least partly due to demand anticipation at low prices consumers store for future consumption this effect if present has broad economic implications we test the predictions of an inventory model using scanner data with two years of household purchases the results are consistent with an inventory model and suggest that static demand estimates may overestimate price sensitivity

patterns of cuban development the first twenty five years abstract this paper interprets the post 1959 evolution of cuban economic policymaking and performance as a function of the shifting and interacting domestic and foreign sources of surplus accumulation policy choices previously seen as strictly subjective such as the use of moral incentives in the late 1960s are attributed objective components the tensions between decentralization and centralization market and plan private and public agriculture and industry efficiency and equity are discussed in relation to domestic surplus generation the role of soviet aid commodity prices trading patterns and debt repayment are treated in analyzing foreign influences on surplus generation

heuristic thinking and limited attention in the car market can heuristic information processing affect important product markets analyzing over 22 million wholesale used car transactions we find evidence of left digit bias in the processing of odometer values whereby individuals focus on the number s leftmost digits the bias leads to discontinuous drops in sale prices at 10 000 mile odometer thresholds along with smaller drops at 1 000 mile thresholds these findings reveal that information processing heuristics matter even in markets with large stakes and easily observed information we model left digit bias in an inattention framework and structurally estimate the inattention parameter empirical patterns suggest the results are driven by final customers rather than professional agents jel d12 d44 d83 l81

the cuban sugar export dependency question premises and controversy abstract controversy over the degree to which cuba has diversified its economy away from sugar monoculture typically pivots on statistical fluctuation in sugar export concentration or the sugar industry s share in the economy this note suggests that the controversy is somewhat moot in that if cuba were to achieve its sugar price and production goals sugar would be a greater component in the cuban economy because cuba has consistently fallen short of sugar price and production objectives statistically observed diversification is not sufficient evidence for a conclusion of successful movement away from monoculture

energy planning and modern portfolio theory a review abstract modern portfolio theory mpt stands as a widely accepted methodology to meet the challenges associated with the definition of energy planning for a particular territory or region energy planning is thus framed as an investment selection problem mpt is characterized by having a wider capacity and conceptual richness than the other previously used methodologies such as the individual least cost alternative the portfolio approach is based on solving for an objective function that seeks to minimize either the cost or the risk of the portfolio subject to different constraints considering that real electricity generation assets can be defined in terms of cost or return and economic risk for each alternative technology the relevant portfolios are the result of solving the optimization model to determine the efficient cost risk frontier the work presented here consists of an exhaustive review of the literature in relation to the application of mpt methodology to the field of energy planning and electricity production a new classification is proposed from a financial perspective of the selection of investments from the preceding studies it delves deeper into the explanation of the limits to the methodology and into the concept of risk which is key from both a financial and an energy perspective the main methodological contributions found in the literature are examined that are aimed at improving the capacity of the model and adjusting it to the reality of the electricity market finally conclusions are provided from the works analyzed in terms of renewable technologies and the policy implications derived from them in most studies a preference has been shown for the inclusion of renewable technologies in the efficient portfolios however in order to implement the decision to increase the share of renewable technologies greater flexibility in the interconnection capacity between states and in storage capacity is needed

a choice model for packaged goods dealing with discrete quantities and quantity discounts utility maximizing solutions to economic models of choice for goods with either discrete quantities or non linear prices cannot always be obtained using standard first order conditions such as kuhn tucker and roy s identity when quantities are discrete there is no guarantee that derivatives of the utility function are equal to derivatives of the budget constraint moreover when prices are nonlinear as in the case of quantity discounts first order conditions can be associated with the minimum rather than the maximum value of utility in these cases the utility function must be directly evaluated to determine its maximum this evaluation can be computationally challenging when there exist many offerings and when stochastic elements are introduced into the utility function in this paper we provide an economic model of demand for substitute brands that is flexible parsimonious and easy to implement the methodology is demonstrated with a scanner panel data set of light beer purchases the model is used to explore the effects of price promotions on primary and secondary demand and the utility of product assortment

optimal sticky prices under rational inattention this paper presents a model in which price setting firms decide what to pay attention to subject to a constraint on information flow when idiosyncratic conditions are more variable or more important than aggregate conditions firms pay more attention to idiosyncratic conditions than to aggregate conditions when we calibrate the model to match the large average absolute size of price changes observed in micro data prices react fast and by large amounts to idiosyncratic shocks but only slowly and by small amounts to nominal shocks nominal shocks have strong and persistent real effects we use the model to investigate how the optimal allocation of attention and the dynamics of prices depend on the firms environment jel e 3 e5 d8

implications of rational inattention abstract a constraint that actions can depend on observations only through a communication channel with finite shannon capacity is shown to be able to play a role very similar to that of a signal extraction problem or an adjustment cost in standard control problems the resulting theory looks enough like familiar dynamic rational expectations theories to suggest that it might be useful and practical while the implications for policy are different enough to be interesting

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

comparing the costs of intermittent and dispatchable electricity generating technologies economic evaluations of alternative electric generating technologies typically rely on comparisons between their expected life cycle production costs per unit of electricity supplied the standard life cycle cost metric utilized is the levelized cost per mwh supplied this paper demonstrates that this metric is inappropriate for comparing intermittent generating technologies like wind and solar with dispatchable generating technologies like nuclear gas combined cycle and coal levelized cost comparisons are a misleading metric for comparing intermittent and dispatchable generating technologies because they fail to take into account differences in the production profiles of intermittent and dispatchable generating technologies and the associated large variations in the market value of the electricity they supply levelized cost comparisons overvalue intermittent generating technologies compared to dispatchable base load generating technologies they also overvalue wind generating technologies compared to solar generating technologies integrating differences in production profiles the associated variations in the market value of the electricity supplied and life cycle costs associated with different generating technologies is necessary to provide meaningful comparisons between them this market based framework also has implications for the appropriate design of procurement auctions created to implement renewable energy procurement mandates the efficient structure of production tax credits for renewable energy and the evaluation of the additional costs of integrating intermittent generation into electric power networks