distributed energy infrastructure paradigm community microgrids in a new institutional economics context abstract this paper provides a theoretical framework based on new institutional economics nie concepts to guide the development of community microgrids given limited application thus far of such energy systems this paper also draws on empirical studies and experiences from the planning and development of other public community infrastructure and utility services in the development of this framework it links an efficient ownership and governance structure with transactional characteristics such as asset idiosyncrasy frequency and uncertainty defined in section 3 1 the key role of the customers and the microgrid service provider and more specifically their bilateral monopoly relationship and its effects on the choice of institutional structure is highlighted the paper examines the optimum conditions for public private or hybrid financial ownership and for unified or network governance through long term contracting this allows ex ante investment uncertainty and ex post appropriation risks to be efficiently managed the analysis suggests that long term contract completeness future demand for electricity and level of uncertainty are the determining factors in the selection of institutional structure this has significant real world implications for the communities seeking to achieve electricity self sufficiency and environmental benefits through community microgrids service providers and other private or public actors

allocation of fixed transmission cost to wheeling transactions by cooperative game theory this paper describes a methodology to allocate the cost of transmission network facilities to wheeling transactions in decentralized power systems the authors propose that the responsibility placed on transmission facilities involved in each transaction be according to the transmission usage pattern their proposal incorporates the mw mile method and considers economies of scale of transmission network facilities they also incorporate a nucleolus scheme in the cooperative game theory to deal with matters of conflict the applicability of their method is demonstrated in a numerical example

control and performance of international joint ventures control is a critical concept for successful management and performance of international joint ventures ijvs this paper reviews and synthesizes prior studies addressing the conceptualization and operationalization of control within ijvs as well as the ijv control performance relationship the paper also presents a new conceptualization of ijv control as well as a conceptual frame work for studying control of ijvs

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

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

possible impact of 2020 bioenergy targets on european union land use a scenario based assessment from national renewable energy action plans proposals according to the renewable energy directive 2009 28 ec the european union member states should increase by 2020 the use of renewable energy to 20 of gross final energy consumption and to reach a mandatory share of 10 renewable energy in the transport sector this study aims to quantify the impact of 2020 bioenergy targets on the land use in the eu based on the projections of the national renewable action plans in four scenarios scenario 1 bioenergy targets according to nreaps scenario 2 bioenergy targets according to nreaps no second generation biofuels scenario 3 bioenergy targets according to nreaps reduced import of biofuels and bioliquids scenario 4 bioenergy targets according to nreaps high imports of biofuels and bioliquids this study also considers the credit for co products generated from biofuel production the analysis reveals that the land used in the eu for bioenergy would range between 13 5 mha and 25 2 mha in 2020 this represent between 12 2 and 22 5 of the total arable land used and 7 3 and 13 5 of the utilised agricultural area uaa in the nreaps scenario about 17 4 mha would be used for bioenergy production representing 15 7 of arable land and 9 4 of uaa the increased demand from biofuels would lead to an increased generation of co products replacing conventional fodder for animal feed considering the co products the land used for bioenergy would range between 8 8 mha and 15 0 mha in 2020 in the various scenarios this represent between 7 9 and 13 3 of the total arable land used in the eu and 4 7 and 8 0 of the uaa in the nreaps scenario when co products are considered about 10 3 mha would be used for biofuels bioliquids and bioenergy production representing 9 3 of arable land and 5 6 of agricultural land this study further provides detailed data on the impact on land use in each member state

on the option to invest in pollution control under a regime of tradable emissions allowances optimal decisions of a firm facing the option of retrofitting its plant to reduce pollution and thereby eliminate the need to purchase emissions allowances are analysed the decision is treated as a real option with the price of pollution permits following a known stochastic process the model is formulated as a set of one dimensional partial differential equations at discrete points in time the firm owner makes optimal decisions about the retrofit including whether to mothball temporarily the model is used to analyse a firm s decision to instal a scrubber as a result of the 1990 u s clean air act jel classification q25 d81 g31 sur la possibilite d investir dans le controle de la pollution dans un regime de permis d emission de pollution echangeables commercialement ce memoire examine les decisions optimales d une entreprise face a la possibilite d adapter ses installations pour reduire la pollution et ce faisant d eliminer le besoin de se procurer des permis d emission de pollution sur le marche le decision est traitee comme une option reelle ou le prix des permis resulte d un processus stochastique connu le modele est formule sous forme d un ensemble d equations differentielles partielles a une dimension a des points discontinus dans le temps le proprietaire de l entreprise prend des decisions optimales de mise a niveau des installations y compris la possibilite de les fermer temporairement le modele est utilise pour analyser une decision d installer un epurateur suite a la mise en place de la loi americaine de 1990 clean air act

mergers acquisitions and innovation performance in the telecommunications equipment industry the worldwide telecommunications equipment industry has experienced an enormous number of mergers and acquisitions m a this article examines the innovation determinants of m a activity a

option value of gasification technology within an emissions trading scheme investment analysis is mostly implemented with discounted cash flow dcf methods such as the net present value npv the problem in a typical application of these methods is the limited ability to value real options management s ability to adapt to changing market conditions or to revise decisions this paper presents a simulation model in which the investment is regarded as a single firm problem in an operating environment with multiple exogenous and stochastic prices the simulation model is used to explore the impact of emissions trading and in particular the european union emissions trading scheme eu ets on investments in integrated gasification combined cycle igcc plants two real case studies are presented modifications of an existing condensing power plant and a new combined heat and power plant the benefit of the selected approach is that it can take into account the value of multiple simultaneous real options better than a standard dcf analysis the results show that a straightforward application of dcf analysis can lead to biased results in competitive energy markets within an emissions trading scheme where a number of uncertainties potentially combined with several real options can make quantitative investment appraisals very complex

risk assessment of virtual power plants offering in energy and reserve markets distributed energy resources ders can be integrated into a single entity namely virtual power plant vpp the integration enables them to participate in competitive wholesale electricity markets according to the different types of uncertainty faced by different ders this integration can also act as a risk hedging mechanism providing a surplus profit in this paper using a two stage stochastic programming approach risk averse optimal offering model for a vpp trading in a joint market of energy and spinning reserve service is presented the conditional value at risk cvar is used to control the risk of profit variability uncertainties involved in generation of renewables consumption of loads calls for reserve service as well as prices in the day ahead market the spinning reserve market rm and the balancing real time market bm are taken into consideration this paper assesses how total and surplus profits of vpp are affected by risk aversion participation in the rm and the pricing system in the bm for this purpose the role of the integration and the trends of energy and reserve transactions under both single and dual pricing systems in the bm are addressed in detail through a numerical study

optimal alliance strategies among retailers under energy deviation settlement mechanism in china s forward electricity market an energy deviation settlement eds mechanism has been proposed to settle the deviation between consumption and energy contracts in china s forward electricity market due to high eds costs of electricity retailers a deviation mutual insurance dmi mechanism is put forward representing an option for electricity retailers to reduce the deviation through contract transfer given this background an optimal alliance strategy is proposed to maximize the utility of different types of individual electricity retailers the alliance income model considers the eds cost reduction and the cooperation cost analyzed based on transaction cost theory tct an improved income allocation method which considers distribution indexes selected by game theory and resource dependence theory rdt is proposed to ensure the comprehensive and reasonable allocation of alliance income considering the expected income and financial risk an evaluation model using conditional value at risk cvar as the financial risk assessment indicator is presented to measure the stability of alliances simulations based on data from a provincial electricity market in china illustrate that the eds costs of retailers can be reduced by selecting appropriate partners for alliance in addition the proposed alliance income allocation method is more reasonable and more targeted than the cooperative game based methods

global microstructures the virtual societies of financial markets using participant observation data interviews and trading transcripts drawn from interbank currency trading in global investment banks this article examines regular patterns of integration that characterize the global social system embedded in economic transactions to interpret these patterns which are global in scope but microsocial in character this article uses the term global microstructures features of the interaction order loosely defined have become constitutive of and implanted in processes that have global breadth this study draws on schutz in the development of the concept of temporal coordination as the basis for the level of intersubjectivity discerned in global markets this article contributes to economic sociology through the analysis of cambist i e trading markets which are distinguished from producer markets and by positing a form of market coordination that supplements relational or network forms of coordination

a global survey and review of the determinants of transaction costs of forestry carbon projects reducing carbon emissions in the forestry sector by means of market based schemes is considered a cost effective measure for tackling climate change impacts however the transaction costs tcs involved are typically unknown or unquantified and therefore often neglected in this study three types of tcs search design and negotiation costs were measured in person days and monetary terms based on a global survey of forestry carbon projects implemented across latin america asia and africa cost estimates vary between zero and 1 201 tco2 for person days and from zero to us 1 738 tco2 for monetary costs key drivers of tcs are identified based on the characteristics of the project in general the transaction the transactors involved and institutional design the latter type of characteristic is shown to have a particularly large impact on tcs

toward a theory of conflict in the franchise system abstract a focused review of the literature is presented in support of a definition of franchising as an interorganizational form examined from the entrepreneurship perspective then microeconomic and relational exchange theories provide guidance within a transaction cost economics theoretical framework to begin the formulation of a theory of conflict in franchising the analysis provided in this article involves business format franchising we submit that the essential core and uniqueness of business format franchising is the relationship between the franchisee and franchisor our definition of franchising requires a review of individual franchisee and franchisor organizational structures therefore our theoretical analysis begins with a fundamental look at the economic structural differences of the average franchisor and franchisee firms using microeconomic theory this review points to the potential for conflict in profit maximizing behavior between franchisee and franchisor the likelihood is that the differences in behavior will manifest in pricing promotion and new store development next because most business format franchising is contractually based and long term we investigate the theoretical support for establishing and continuing a relationship with fundamental areas of conflict relational exchange theory is used for this analysis transaction cost economics provides a perspective on the governance of the interorganizational form and guides us in the investigation of the ongoing state of the relationship a key to transaction cost analysis is shared assets in the relationship and the degree of transferability of those assets therefore building and maintaining the franchise trademark becomes the theoretical focus for governance of the relationship we propose that franchisor provided services is the principal method of franchisor contract fulfillment and is the framework for informal governance of the relationship the importance and adequacy of the transactions between the franchisee and franchisor affect the perceived value of the trademark and are key to continuing the franchise relationship finally the conflict literature is briefly reviewed to provide a context for the discussion of conflict in franchising and to illustrate that conflict can have a positive or negative effect on the relationship

understanding the dynamic effect of contracting out on the delivery of local public services manez j perez lopez g prior d and zafra gomez j l understanding the dynamic effect of contracting out on the delivery of local public services regional studies contracting out is a mechanism through which the delivery of public services can be made more efficient however the process has yielded conflicting results this paper presents a dynamic mixed approach incorporating an intertemporal frontier and a matching technique to measure the short and long term effects of the implementation of contracting out on the efficiency of local public service delivery the study demonstrates the existence of temporary inefficiency arising from the change in service management when contracting out takes place followed by an increase in efficiency among municipalities that contract out with respect to comparable municipalities that do not do so

experience with pjm market operation system design and implementation this paper outlines the fundamental features of the pjm day ahead energy market and real time energy market the day ahead market is based on a voluntary least cost security constrained unit commitment and dispatch with several fundamental design features that ensure the market is robust and competitive this market offers market participants the option to lock in energy and transportation charges at binding day ahead prices the flexibility of the day ahead market rules provide all participants with equal access to the day ahead market through consistent price signals and by providing all participants with the ability to submit virtual demand bids and virtual supply offers these mechanisms promote liquidity in the markets economic incentives drive the convergence of the day ahead and real time market prices the real time energy market is based on security constrained economic dispatch and is cleared based on the actual system operating conditions the lmp based markets support reliable grid operations through efficient price signals

allocation of transmission fixed charges an overview the application of marginal cost in pricing the transmission services has shown not effective mainly due to revenue reconciliation problems to overcome this a set of other methods derived from the mw mile rule has been suggested to allocate transmission fixed costs this paper compares such methods known as embedded cost methods in a centralized transmission network environment although these methods actually share the total cost and are very simple they are usually rejected due to the lack of a good economic reasoning the economic issue and the impact on the system expansion planning of such allocation are addressed in this paper some examples with the brazilian transmission system illustrate the results derived from this analysis

public versus private sector procurement ethics and strategy what each sector can learn from the other the government purchasing market constitutes the largest business sector in the world while marketers would benefit from a deep understanding of both sectors how the two sectors differ in terms of ethics and strategy largely remains unknown the purpose of this research therefore is to explore differences between the for profit and not for profit sectors on two critical aspects of business to business procurement ethics and strategy using survey data from a sample of 328 procurement professionals in the for profit and not for profit sectors key differences are explored findings suggest that buyers in the for profit sector are more likely to behave opportunistically conversely the buyers leaders in the not for profit sector behave more opportunistically and are more willing to turn a blind eye to their subordinate buyers opportunistic behaviors in addition key differences in procurement strategy are unveiled suggesting that not for profit procurement practices have some room for improvement based on the findings theoretical and managerial implications are drawn and a future research agenda is proposed

cross border mergers and acquisitions by oil and gas multinational enterprises geography based view of energy strategy abstract given that global crude oil prices are significantly dropped and business consolidation transactions are markedly increased in recent years this paper to date is the first to examine the cross border merger and acquisition strategy of oil and gas multinational enterprises using a fine tuned sample of 150 large scale oil acquisition transactions us 535 billion announced by oil and gas enterprises from over 50 countries during the period 2005 2015 we endeavor to answer four fundamental research questions who is where what for who is there why who is where and there and who is a serial acquirer to do so we propose an integrated framework of geography based view of energy strategy by leveraging theoretical insights from the energy economic geography international business strategy and corporate finance literature on top of that we discuss the dynamics of the oil and gas industry and show the remarkable trends in the crude oil prices over the past three decades 1990 2016 our geographic analyses highlight that state owned oil companies from asia and a less extent europe have rapidly expanded into resource rich countries such as canada and the us to secure oil reserves as well as acquire industry specific strategic assets this research contributes to the geography based view of energy strategy and discusses policy and managerial implications to sustain the world oil and gas industry

eu bioenergy development to 2050 abstract bioenergy is the eu s leading renewable energy source at present understanding bioenergy s contribution to the future eu energy mix is strategically relevant for mid to long term climate targets this review consolidates recent projections of both supply and demand dynamics for eu bioenergy to 2050 drawing from resource focused demand driven and integrated assessment approaches projections are synthesised to identify absolute ranges determine cohesion with policy and draw insights on the implications for the scale of development trade and energy security supply side studies have undergone methodological harmonisation efforts in recent years despite this due to assumptions on key uncertainties such as feedstock yields technical potential estimates range from 9 to 25 ejyr 1 of eu domestically available biomass for energy in 2050 demand side projections range between 5 and 19 ejyr 1 by 2050 this range is primarily due to variations in study assumptions on key influential developments such as economic competitivity of bioenergy eu energy efficiency gains within the power sector flexibility for meeting mitigation targets and technological portfolios upper bound technical supply estimates are able meet future demand wholly from the domestic resource base holding the potential to reduce total eu primary energy import dependency 22 points from the current eu roadmap trajectory however due to part of this domestic resource base being deemed economically inaccessible or of insufficient quality interregional imports are projected to increase from current 4 to 13 76 emergence of non energy applications are projected to compete for at least 10 of the biomass needed to fulfil bioenergy demand in 2050

does being r d intensive still discourage outsourcing evidence from dutch manufacturing being r d intensive has traditionally been seen as an impediment to outsourcing this study confirms that empirically this was the case for a set of manufacturing industries in the netherlands in the early 1990s but also shows that r d intensity became a positive predictor for changes in outsourcing levels over the 1990s suggesting firms in r d intensive industries have increasingly started to rely on partnership relations with outside suppliers this confirms the need to move the analysis from scale opportunism and appropriation concerns to a relational perspective when studying outsourcing in r d intensive industries

income risk of eu coal fired power plants after kyoto coal fired power plants enjoy a significant advantage relative to gas plants in terms of cheaper fuel cost this advantage may erode or turn into disadvantage depending on co2 emission allowance price financial risks are further reinforced when the price of electricity is determined by natural gas fired plants marginal costs we aim to empirically assess the risks in eu coal plants margins up to the year 2020 parameter values are derived from actual market data monte carlo simulation allows compute the expected value and risk profile of coal plants earnings future allowance prices may spell significant risks on utilities balance sheets

global and local subcontracting space ethnicity and the organization of apparel production abstract labor intensive apparel production has shifted to low wage asian nations yet continues to flourish in the united states and other high wage areas this paper explains this apparent contradiction by concluding that in addition to labor costs firm size ethnicity market strategy and trade regulations powerfully affect the location of apparel production large firms are more able to disperse production globally than small firms us based firms owned by ethnic asians are more likely to produce in asian factories than firms of other ethnicities and firms producing for rapidly changing fashion markets are less likely to produce offshore than firms producing less fashion intensive products finally trade restrictions powerfully affect the location of production albeit in ways different than intended by policy makers

the stability of american markets much of the evidence of coordination between corporations and their markets comes from cross sectional conducted within portions of the american economy during the past two decades we know especially for manufacturing during the late 1960s that certain structural qualities of markets predict profits and the organization of large firms but this evidence is open to an uncomfortable empirical question to what extent did the social structural qualities determining resource dependence in american markets change during the 1960s and 1970s so as to limit the generalizability of cross sectional evidence the analysis here shows that markets were dramatically stable in he social structure of production relations known to predict the structure of large firms relying principally on department of commerce data the article traces the american economy through the 1960s and 1970s in terms of 77 broadly defined markets describing the stability of market boundaries and patterns of transactions with suppliers and c

improving inter transmission compensation in eu abstract this article is intended as a roadmap to the correction of the existing shortcomings in the eu power transmission tariff system especially in the existing mechanism of inter transmission system operator tso compensation itc the relevant literature is surveyed and the essence of the issue is formulated definitions preconditions assumptions and constraints for the problem are explained the paper outlines the most simple and straightforward approach for the improvement of inter transmission compensation in the continental european synchronous area the proposals are based on the old practice of socialization of the network costs retained in almost all european countries i e the principle of charging the customers at the exit equal treatment is given to internal users and cross border users a tso is reimbursed for both internal and cross border flows from the users conjoined to its network on an equal footing with the users extracting power from the peripheral nodes the existing inequity in individual payments for power transmission is overcome and the cross border subsidy element is avoided this approach should be tested modeled and evaluated with real data for the european union of networks some key parts of the article are written in a more popular style in order to be accessible to inexpert readers as well

offshoring and the global distribution of work implications for task interdependence theory and practice a recent offshoring research network orn global survey of offshoring shows that since 2004 management concerns about operational issues on achieving the benefits of offshoring have increased significantly in this paper we examine inter task interdependence a key operational determinant of inter site interaction and communications in offshoring we analyze existing theories of interdependence to examine the extent to which they provide guidance for understanding the interaction and communication requirements between work segments that are offshored and distributed across the globe using a series of mini cases on globally distributed work gdw we show how the traditional typology of interdependence developed in the 1960s and 1970s is no longer adequate for understanding and managing task interdependencies in gdw we propose three concepts to address this problem integration interdependence hand offs and information stickiness we then show how our revised typology of interdependence enables a better understanding of the interactions and communication requirements between sites using this revised theory we propose guidelines for work design and examine their implications for practical offshoring and work distribution decisions implications for theory and practice for mnes engaged in offshore relationships are discussed

price drivers and structural breaks in european carbon prices 2005 2007 this article aims at characterizing the daily price fundamentals of european union allowances euas traded since 2005 as part of the emissions trading scheme ets the presence of two structural changes on april 2006 following the disclosure of 2005 verified emissions and on october 2006 following the european commission announcement of stricter phase ii allocation allows to isolate distinct fundamentals evolving overtime the results extend previous literature by showing that eua spot prices react not only to energy prices with forecast errors but also to unanticipated temperatures changes during colder events besides the sub period decomposition of the pilot phase gives a better grasp of institutional and market events that drive allowance price changes

supply chain perspective on competitive strategies and green supply chain management strategies due to strategic motivations and pressures from various stakeholders firms are adopting green supply chain management gscm practices to extend environmental sustainability objectives to suppliers although it seems that an increasing number of firms is seeing environmental sustainability as a source of competitive advantage there is a large gap of research focusing explicitly on the connection between competitive strategy and gscm it is also necessary to examine gscm practices in several operational contexts this article refines the competitive strategy approach and examines external gscm strategies along the tiers of supply chain from the perspective of logistics users and providers using a dataset of 128 manufacturing 110 trading and 144 logistics firms operating in finland the results reveal a connection between competitive strategy and gscm strategy marketing differentiators and firms pursuing hybrid strategies tend to use more advanced gscm strategies to manage the environmental performance of their suppliers for them gscm seems to be a way to differentiate products and services and to minimise the risk of potential losses resulting from poor environmental performance by suppliers the results highlight the need to understand the role of competitive strategy in gscm adoption both in academia and in business

historical method in marketing research with new evidence on long term market share stability abstract several researchers have advocated historical or longitudinal approaches to study marketing phenomena although some have applied this approach more often it has been overlooked or denigrated the author argues that historical method is capable of producing scientific knowledge that is currently useful rather than simply a remembrance of the past the author presents a complete description of the historical method so researchers can use this article as a guide when applying this method the value of the method is illustrated by examining the prevailing finding in the marketing literature that market shares are stable over time although this finding is considered an empirical generalization an analysis of more than 650 brands in 100 categories raises doubts about the longevity of market share stability

costly information and the evolution of self organization in a small complex economy abstract the core idea of evolution is that order in living systems emerges from a simple process of variation and selection in biological systems we usually understand the source of variation as best described by the mechanisms of genetics if human social systems are evolutionary systems however it would seem the variation that most explains the sources of change in these systems occurs not from a genetic mechanism but from individual learning we use an evolutionary computational methodology to explore the way individual learning and adaptation lead to the evolution of persistent self organized social and economic activity the basic idea behind these explorations is that the character and extent of self organizing social and economic activity depends upon the way the environment frames the costs of individual learning and adaptation we consider three different kinds of costs affecting learning and adaptation the costs of autonomous searching of communicating and of deciding individuals respond to these costs by carefully i e economically choosing to learn about and interact with familiar agents in familiar arenas in which they have relatively secure expectations about the outcome of their actions emerging from these choices are persistent relationships among agents that lead to social and economic structure and to the imperfect coordination of aggregate production the character and the extent of each are a function of the way the costs of information change with changing natural and human system conditions we use a learning classifier system lcs to model learning the logic of an lcs closely mimics the mechanisms of darwinian evolution but is applied to the evolution of an agent s decision rules we describe the environmental context necessary for an lcs to produce economizing behavior and apply the method to a multi agent simulation of the maine lobster fishery which we treat as a metaphor for competition based on the search for useful knowledge the structure and method of the model is similar to a conventional agent based model except we use lcs to evolve decision rules for each agent rather than supplying those rules ourselves this allows agents to change their behavior i e to learn and adapt as their environment changes modeling learning and adaptation as the source of behavioral variation makes it possible to use evolutionary theory to address important questions of social and economic emergence not possible with current methods

probabilistic game approaches for network cost allocation in a restructured power market the network cost is to be allocated between multiple players utilizing the system in varying capacities cooperative game approaches based on shapley value and nucleolus provide stable models for embedded cost allocation of power networks varying network usage necessitates the introduction of probabilistic approaches to cooperative games this paper proposes a variety of probabilistic cooperative game approaches these have variably been modeled based upon the probability of existence of players the probability of existence of coalitions and the probability of players joining a particular coalition along with their joining in a particular sequence application of these approaches to power networks reflects the system usage in a more justified way consistent and stable results qualify the application of probabilistic cooperative game approaches for cost allocation of power networks

storage and the electricity forward premium we develop and test a model describing the influence of natural gas storage inventories on the electricity forward premium the model is constructed by linking the effect of gas storage constraints on the higher moments of the distribution of electricity prices to an established model of the effect of those moments on the forward premium the model predicts a sharply negative effect of gas storage inventories on the electricity forward premium when demand for electricity is high and space heating demand for gas is low empirical results based on pjm data strongly support the model

capital market development and firm restructuring during an economic shock we conceptualize capital markets in terms of resource access and governance and argue that more developed capital markets facilitate firm restructuring through more effective provision of capital and governance of transactions we then develop a contingency model that specifies that the effects of capital market development on restructuring vary by 1 types of restructuring 2 the nature of the economic environments and 3 firms access to resources we evaluate a broad range of restructuring actions among independent firms and business group affiliates in singapore and south korea before and during the economic shock of 1998 1999 results support our predictions of the impact of capital market development and of contingencies and highlight the value of incorporating an external capital markets perspective to complement internally focused theoretical explanations for firm restructuring

a framework to facilitate institutional arrangements for smallholder supply in developing countries an agribusiness perspective the industrialization of agriculture and the potential problem of small scale farmer marginalization calls for a fresh approach to the design of agribusiness supply chain arrangements in developing countries the objective of the paper is to contribute to a better understanding of institutional arrangements that can promote stable smallholder agribusiness contracting arrangements in a developing country context a case study approach incorporating a transaction cost framework is used to test whether trust can significantly change the contract characteristics of supply the results suggest that although the presence of trust can influence the contract characteristics of a supply arrangement it may not be significant because of other factors in a developing country context bearing this in mind a number of institutional arrangements are recommended in order to promote more stable contract conditions

the economics of organization the transaction cost approach the transaction cost approach to the study of economic organization regards the transaction as the basic unit of analysis and holds that an understanding of transaction cost economizing is central to the study of organizations applications of this approach require that transactions be dimensionalized and that alternative governance structures be described economizing is accomplished by assigning transactions to governance structures in a discriminating way the approach applies both to the determination of efficient boundaries as between firms and markets and to the organization of internal transactions including the design of employment relations the approach is compared and contrasted with selected parts of the organization theory literature

transaction cost economics in global sourcing assessing regional differences and implications for performance this paper addresses two gaps in current research on transaction cost economics tce first the fundamental claim suggesting that firms that align their governance structure to transactions according to tce perform better than those that do not and second the application of tce to global sourcing transactions a research model is presented and evaluated using a set of 150 relationships between swiss buyers and foreign suppliers the findings suggest that there are significant differences in how transactions and governance structures are aligned with varying performance and with suppliers from western europe as compared to suppliers from other regions

optimization of electricity retailer s contract portfolio subject to risk preferences when an electricity retailer faces volume risk in meeting load and spot price risk in purchasing from the wholesale market conventional risk management optimization methods can be quite inefficient for the management of an electricity contract portfolio in this context we develop a multistage stochastic optimization approach which accounts for the uncertainties of both electricity prices and loads and which permits the specification of conditional value at risk requirements to optimize hedging across intermediate stages in the planning horizons our experimental results based on real data from nordpool suggest that the modeling of price and load correlations is particularly important the sensitivity analysis is extended to characterize the behavior of retailers with different risk attitudes thus we observe that a risk neutral retailer is more susceptible to price related than load related uncertainties in terms of the expected cost of satisfying the load and that a risk averse retailer is especially sensitive to the drivers of the forward risk premium

complex losses allocation to generators and loads based on circuit theory and aumann shapley method this paper presents a new method to allocate active and reactive losses simultaneously to generators and loads the allocation is calculated for each transmission branch identifying and quantifying the buses responsibilities in losses this is a two step process in the first step generators are modeled as current injections and loads as constant admittances in order to determine generator participations in losses in the second step loads are modeled as current sources and generators as constant admittances in order to determine load participations in losses the aumann shapley and circuit theories are used to calculate the participation of each real and imaginary current component considering them as independent players in the complex losses allocation game the properties of the aumann shapley method ensure equitable allocation and recovery of the total active and reactive losses counter flow cross subsidy and negative allocation issues are discussed numerical results are presented and discussed to demonstrate the applicability of the proposed method

homeward bound interest identity and investor behavior in a third world export platform1 are indigenous investors in third world export platforms more stable than their allegedly footloose foreign rivals while mainstream economists hold that investor behavior is independent of investor identity and therefore call for the parallel treatment of domestic and foreign firms their critics hold that indigenous investors are more dedicated than their foreign counterparts and therefore call for industrial policies designed to cultivate and defend native entrepreneurs who is correct the author uses a unique combination of qualitative and quantitative data to document and account for the relative stability and dynamism of indigenous investors in the dominican republic s largest export processing zone and thereby brings economic sociology back from the margins of development theory and development theory back into the heartland of sociology

fuel mix diversification incentives in liberalized electricity markets a mean variance portfolio theory approach monte carlo simulations of gas coal and nuclear plant investment returns are used as inputs of a mean variance portfolio optimization to identify optimal base load generation portfolios for large electricity generators in liberalized electricity markets we study the impact of fuel electricity and co2 price risks and their degree of correlation on optimal plant portfolios high degrees of correlation between gas and electricity prices as observed in most european markets reduce gas plant risks and make portfolios dominated by gas plant more attractive long term power purchase contracts and or a lower cost of capital can rebalance optimal portfolios towards more diversified portfolios with larger shares of nuclear and coal plants

residential appliances direct load control in real time using cooperative game the relatively fixed residential day ahead real time electricity price reflects insufficient information of the market so the response of residential energy management system ems to the real time pricing rtp is not complete and therefore retailers are exposed to the risk of price fluctuation in balance market direct load control dlc in cooperative game is proposed in this paper a cooperative game union comprised of some users and a retailer is established to minimize the union costs the union provides an opportunity to access the balance market indirectly for residents and to reduce risks and costs for the retailer in addition shapley value which embodies the fairness is used in union profits allocation the method that avoids bidding for residential users simplifies the thresholds of residents to participate in market furthermore the dlc union contributes to imbalance self management for the retailer which helps him avoid paying for the regulation cost involved in the deviation between the total quantity bought at markets and the actual consumption the achievement of union s goal respects the constraints set by users the method that alleviates the disturbance of dlc to residents meets the dual goals of being both fully responsive and non disruptive

productivity developments in european agriculture relations to and opportunities for biomass production abstract this paper discusses if how fast and to what maximum yield improvements can be realized in europe in the coming decades and what the opportunities and relations are to biomass production the starting point for the analysis is the historic context of developments in european agriculture over the past five decades historic developments in european crop and animal protein productivity between 1961 and 2007 show an average mean annual growth rate of 1 6 in relative terms developments are slower on average in the netherlands and france at 1 0 y 1 than in poland and ukraine ussr at 2 2 y 1 in absolute figures however growth has been considerable in wec and modest in the ceec yield trends further show that significant yield changes can be realized over a short period of time positive growth rates of 3 5 y 1 were reached in several countries and for several crops in several decades in eastern european countries during their transition in the 1990s negative growth rates as low as 7 y 1 occurred outcomes suggest that productivity levels can be actively steered rather than being just the result of autonomous developments current yield gaps differ greatly between western europe france 1 high yielding lignocellulosic crops could double this potential it is concluded that the potential to free up agricultural lands for the production of bioenergy crops in europe is considerable the degree to and the pace at which yields develop will determine how much of the potential is opened up agricultural policy and technological development are key to open up the potential

european co2 prices and carbon capture investments we assess the option to install a carbon capture and storage ccs unit in a coal fired power plant operating in a carbon constrained environment we consider two sources of risk namely the price of emission allowance and the price of the electricity output first we analyse the performance of the eu market for co2 emission allowances specifically we focus on the contracts maturing in the kyoto protocol s first commitment period 2008 to 2012 and calibrate the underlying parameters of the allowance price process then we refer to the spanish wholesale electricity market and calibrate the parameters of the electricity price process we use a two dimensional binomial lattice to derive the optimal investment rule in particular we obtain the trigger allowance prices above which it is optimal to install the capture unit immediately we further analyse the effect of changes in several variables on these critical prices among them allowance price volatility and a hypothetical government subsidy we conclude that at current permit prices immediate installation does not seem justified from a financial point of view this need not be the case though if carbon market parameters change dramatically carbon capture technology undergoes significant improvements and or a specific governmental policy to promote these units is adopted

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

the friction cost method for measuring indirect costs of disease a new approach for estimating the indirect costs of disease which explicitly considers economic circumstances that limit production losses due to disease is presented the friction cost method for the netherlands the short term friction costs in 1990 amount to 1 5 2 5 of net national income nni depending on the extent to which short term absence from work induces production loss and costs the medium term macro economic consequences of absence from work and disability reduce nni by an additional 0 8 these estimates are considerably lower than estimates based on the traditional human capital approach but they better reflect the economic impact of illness

out of africa locational determinants of south african cross border mergers and acquisitions abstractsouth africa is the africa s biggest source of outward foreign direct investment this study examines the principal locational motives of cross border mergers and acquisitions cbma by south african firms for the 1990 2014 period the role of inter country cultural and economic linkages is also studied firm level data of south african merger and acquisition activities in 74 host countries are used to estimate a number of model specifications that control for host country economic geographical cultural and institutional characteristics estimations are carried out using random effects negative binomial panel model capturing the host economy market and enhancing efficiency are found to be the two major motives driving south african corporations cbma activities natural resources acquisition seems a less important motive while strategic assets such as patents and technology do not appear to be attractive the role of cultural and economic linkages between the home and the host country is found t

bounded rationality lifecycle consumption and social security abstract this paper explores an overlapping generations model of bounded rationality in which consumers only foresee the future over a subset of their life span we focus in particular on whether the model can in general equilibrium produce a hump shaped lifecycle consumption profile with a peak that matches data for the average u s consumer for a simple four period model we show that an increasing income profile along with exogenously imposed retirement are sufficient to induce a hump with no other mechanism that can account for a hump besides bounded rationality the model best fits the salient features of consumption data with a planning horizon of 20 years which is well supported by the behavioral evidence found in surveys on retirement planning finally we show that the age of the consumption peak is robust to the introduction of social security mortality risk and another species of bounded rationality quasihyperbolic discounting moreover social security can be welfare improving with a short planning horizon we can calibrate the model to jointly explain the timing of the consumption hump and the optimality of the current social security system with quasihyperbolic discounting instead we can calibrate the model so the current social security system is optimal but we cannot also account for the timing of the consumption hump if we add quasihyperbolic discounting in addition to a short planning horizon the present bias has a negligible effect in equilibrium

should buyers or sellers organize trade in a frictional market to answer the question in the title this article characterizes the socially efficient organization of the market with search frictions the efficient organization depends on the relative elasticity in the supply between the two sides of the market the costs of participating in the market and organizing trade and the a symmetry in matching we also show that the social optimum can be implemented by a realistic market equilibrium where the organizers set up trading sites to direct the other side s search the results provide a unified explanation for why trade has often been organized by sellers in the goods market by buyers firms in the labor market and by both sides in the asset market the analysis also sheds light on how the efficient market organization can change with innovations such as e commerce and just in time production

institutional change in european natural gas markets and implications for energy security lessons from the german case this article focuses on institutional change in the german gas market driven by eu internal market and climate policies it argues that institutional change has functional externalities for energy security the german gas market provides a useful case study as germany is the biggest continental gas market a major hub and transport country which has largely privatised unbundled and separated its natural gas undertakings transition is ongoing tending towards an internal market inter national natural gas economics is in flux institutional evolution has repercussions for corporate and market structures the operating of the system and the realization of transactions changes in the institutional framework crucially affect energy security which is often associated with institutional stability on the basis of this case study it is argued herein that the security of natural gas supplies should be reexamined in the context of the developments described above since overall the institutional changes in natural gas security lag behind the eu s internal natural gas market development

a critical assessment of transaction cost theory and governance of public services with special reference to water and sanitation this is a pre copyedited author produced version of an article accepted for publication in cambridge journal of economics following peer review the version of record hulya dagdeviren and simon a robertson a critical assessment of transaction cost theory and governance of public services with special reference to water and sanitation cambridge journal of economics vol 40 6 1707 1724 january 2016 is available online at https doi org 10 1093 cje bev079

evaluation of the trading development in the iberian energy derivatives market the efficiency of the iberian energy derivatives market in its first five and a half years is assessed in terms of volume open interest and price the continuous market shows steady liquidity growth its volume is strongly correlated to that of the over the counter otc market the amount of market makers the enrolment of financial agents and generation companies belonging to the integrated group of last resort suppliers and the otc cleared volume in its clearing house the hedging efficiency measured through the ratio between the final open interest and the cleared volume shows the lowest values for the spanish base load futures as they are the most liquid contracts the ex post forward risk premium has diminished due to the learning curve and the effect of the fixed price retributing the indigenous coal fired generation this market is quite less developed than the european leaders headquartered in norway and germany enrolment of more traders mainly international energy companies financial agents energy intensive industries and renewable generation companies is desired market monitoring reports by the market operator providing post trade transparency otc data access by the energy regulator and assessment of the regulatory risk can contribute to efficiency gains

the textile and clothing industries under the fifth kondratieff wave some insights from the case of hong kong abstract this paper proposes that the world s textile and clothing industries have become increasing vertically disintegrated with a few flexible production regions the cream portion engaging in creative innovative dynamic and high value added activities and an expanding number and spatial extent of regions the cake portion taking part in low value added activities in between is an artificial layer protected by the international regulatory framework this layer has characteristics of both the cream and cake layers on the one hand the labor force in this layer suffers from low job mobility and low paid blue collar work of the cake portion and is dominated by female semi skilled workers on the other hand industrialists and governments in this layer enjoy the profits and high export values of the cream portion under the fifth kondratieff wave the textile and clothing industries have become increasingly coordinated and controlled by a thinner cream layer over time regions in the cake portion will find it increasingly difficult to transform themselves into cream because of deep seated structural and geographic differences

a memoir and reflection knowledge and an evolutionary theory of the multinational firm 10 years later the production of the 1993 article awarded the jibs decade award was written during a time when ideas regarding knowledge and the international expansion of the firm confronted a hostile audience the sources of these ideas were directly related in winter s and roger s prior work but also to a broader literature on category errors and technology transfer the theory of the firm as a social community is a distinctly sociological theory and though sharing many key ideas with the resource based view that developed at the same time is deeply opposed to engineering conceptions of firms as legomodular pieces that can be easily shifted bought and sold we describe our individual biographies and the subsequent intellectual development of the

influences of transaction costs in environmental policy abstract there is a growing literature reporting the extent of transaction costs for environmental policies however understanding why transaction costs occur and why they are small or large is also important for efficient policy selection and evaluation following an analysis of the organisational economics literature and reports of the extent of transaction costs for a number of environmental policies three key influences to transaction costs in environmental policies are identified these are the following 1 the characteristics of the transaction for the environmental good 2 the nature of the transactors and 3 the current institutional environment and arrangements these affect transaction costs to the government and all other parties influenced by a policy transaction costs occur due to actions of information collection and policy design policy enactment and establishment implementation and contracting administration and monitoring and enforcement an interrogation of transaction cost influences reveals that 1 the influence varies between parties and is affected by the actions and interactions of and between all parties to a policy 2 how transaction costs are experienced varies across time and 3 who experiences transaction costs depends on the policy itself future policy selection and refinement will benefit from empirical analysis of the causes of transaction costs

financial bootstrapping in small businesses examining small business managers resource acquisition behaviors in recent years small businesses have received much attention from policy makers and researchers in that these businesses are considered important for economic growth and job creation at the same time small businesses are assumed to face major problems in securing long term external finance which is regarded as restraining their development and growth small business managers are assumed to use institutional finance as a means of meeting the need for resources and as a consequence the major part of the research on small business finance has focused on constraints in the supply of institutional market finance as we see it most small business managers handle the need for resources using means other than external finance by applying different kinds of financial bootstrapping methods financial bootstrapping refers to the use of methods for meeting the need for resources without relying on long term external finance from debt holders and or new owners however these other means of resource acquisition have with few exceptions not been focused on within earlier research on small business finance against this background the purpose of this study is to describe small business managers use of different financial bootstrapping methods and more importantly to develop concepts that can help its better understand small business managers financial bootstrapping behaviors the research process was initiated with a number of unstructured interviews conducted with small business managers accountants consultants bank officials and researchers in order to identify different financial bootstrapping possibilities on the basis of the interviews and an earlier study on financial bootstrapping resulting in the identification of 32 bootstrapping methods a questionnaire was constructed and sent to 900 small business managers in sweden given the limited knowledge within the area of financial bootstrapping the study is based on explorative factor analysis and cluster analysis from the cluster analysis six clusters of bootstrappers were identified differing from each other with respect to the bootstrapping methods used and the characteristics of the business on the basis of this information the different clusters were labeled i delaying bootstrappers 2 relationship oriented bootstrappers 3 subsidy oriented bootstrappers 4 minimizing bootstrappers 5 non bootstrappers and 6 private owner financed bootstrappers the groups of financial bootstrappers show differences in their orientation toward resource acquisition representing different aspects of art internal mode of resource acquisition a social mode of resource acquisition and a quasi market mode of resource acquisition we find that the delaying bootstrappers private owner financed bootstrappers and minimizing bootstrappers all represent an internal mode of resource acquisition the relationship oriented bootstrappers follow a socially oriented mode of resource acquisition whereas the subsidy oriented bootstrappers apply quasi market oriented resource acquisition this study contributes to our empirical understanding by providing knowledge about the financial bootstrapping methods used in small businesses furthermore by developing concepts this study contributes to the conceptual development of our knowledge about financial bootstrapping the implication of this study is that financial bootstrapping is a phenomenon which deserves more attention in future research on small business finance at the same time financial bootstrapping behavior is probably a more general phenomenon appearing in different contexts such as r d activities in large businesses financing startups etc finally the study points out implications for small business managers consultants teachers etc practitioners often tend to focus on market solutions to resource needs this study shows however that this strong focus cart be questioned resources needed in small businesses can in many situations be secured using financial bootstrapping methods referring to internally oriented and socially oriented resource acquisition strategies

a novel policy for locational marginal price calculation in distribution systems based on loss reduction allocation using game theory in this paper a novel locational marginal price lmp policy for distribution system with significant penetration of distribution generation dg in competitive electricity market is presented this new lmp method is based on remunerating dg units for their participation in reduced amount of energy losses in distribution systems brought about by participation of all dg units in supplying demand also this method is combined with an iterative solution this approach provides an efficient tool for distribution companies discos to estimate the state of the system in the next step which other existing approaches of lmp fail to provide this system state estimation finally in order to expand lmp method and provide effective prediction method for discos to estimate the day ahead state of the system ann tool is employed to predict the market price and demand for the next 24 h this lmp prediction is a powerful operational tool for disco to exert its control over private dg units however prediction methods contain error therefore uncertainty modeling is implemented for modeling the effect of error in prediction on the lmp calculation for the next day

coping with the upheavals of globalization in the shea value chain the maintenance and relevance of upstream shea nut supply chain organization in western burkina faso summary market globalization has had only a weak impact on the regional shea nut supply chain in western burkina faso despite the boom in the shea trade and the arrival of leading foreign firms we show that despite the fact that wholesalers have kept the shea chain locked in an oligarchic organization for the last 50 years they still play an important role in the smooth functioning of the chain and in profit sharing down the chain to the rural poor we suggest that development actors should consider shea traders and their role in the coordination of the chain more carefully 2014 the authors published by elsevier ltd this is an open access article under the cc by nc sa license http creativecommons org licenses by nc sa 3 0

does variability in crimes affect other crimes the case of international corruption and shadow economy abstractusing data on more than 125 countries this article attempts to add to the research linking corruption and the shadow economy by examining the effect of variability uncertainty in one whi

sustainability constraints in determining european bioenergy potential a review of existing studies and steps forward abstract this paper reviews european land and bioenergy potential studies to 1 identify shortcomings related to how they account for agricultural intensification and its associated environmental effects and sustainability constraints and 2 provide suggestions on how these shortcomings can be improved in future assessments the key shortcomings are the environmental impacts of intensification are nearly always ignored in the reviewed studies while these impacts should be accounted for if intensification is required to make land available for energy cropping future productivity developments of crops and livestock and the associated land use and environmental effects are currently limited to conventional intensification measures whereby the proportion between inputs and outputs is fixed sustainable intensification measures which increase land productivity with similar or lower inputs are ignored in the reviewed studies livestock productivity developments livestock specific intensification measures and their environmental effects are poorly or not at all covered in the reviewed studies most studies neglect sustainability constraints other than ghg emissions in the selection of energy crops this includes limitations to rainfed energy crop cultivation a minimum number of crop species the structural diversity within cropping areas and the integration of energy crops in existing or new crop rotations while simultaneously considering the effects on subsequent crops these shortcomings suggest that the identification of sustainable pathways for european bioenergy production requires a more integrative approach combining land demand for food feed and energy crop production including different intensification pathways and the consequent direct and indirect environmental impacts a better inclusion of management practices into such approach will improve the assessment of intensification its environmental consequences and the sustainable bioenergy potential from agricultural feedstocks

emissions trading and investment decisions in the power sector a case study in finland abstract organizations which consider investment in or divestment of power production licences capacity within the european community are exposed to the impacts of the european union emission allowance trading scheme eu ets in this paper the consequences of the eu ets on investment decisions are explored in a country specific setting in finland first we review the general mechanisms through which the eu ets influences size timing and cashflows of an investment next we discuss the projected changes in finnish power producers investment environment and examine the financial impacts due to the eu ets on a case investment decision a hypothetical condensing power plant 250 mwe the standard discounted cash flow dcf analysis is extended to take into account the value of two real options the option to wait and the option to alter operating scale in a quantitative investment appraisal the impact of emissions trading not only depends on the expected level of allowance prices but also on their volatility and correlation with electricity and fuel prices the case study shows that the uncertainty regarding the allocation of emission allowances is critical in a quantitative investment appraisal of fossil fuel fired power plants

short term projects and emergent careers evidence from hollywood the hollywood film industry is considered as a system of recurrent ties among the various major participants who usually work under short term contracts for single films this form of project based organization in seen as a response to uncertainty and risk in the film industry the paper examines the ways in which independent contractors producers directors cinematographers and actors organize and operate to reduce uncertainty and risk and to increase profits the analysis of data from 2 430 films made in the period 1965 80 establishes patterns of recurrent ties among participants who are at comparable levels of cumulative productivity with respect to earnings oscars oscar nominations and number of previous films the paper also considers the degree to which film earnings are influenced by the past productivity of the major participants

the road taken origins and evolution of employment systems in emerging companies excerpt drawing on a unique archive of qualitative and quantitative data describing 100 bay area high technology firms within their first decade this paper examines the models of employment relations espoused by company founders and bow those models shaped the evolution of human resource management within their organizations information gleaned from interviews suggests that founders and others involved in designing and launching these companies had blueprints for the employment relation that varied along three key dimensions the primary basis of employee attachment and motivation the primary means for controlling and coordinating work and the primary criterion emphasized in selection based on combinations of these three dimensions firms in our sample cluster fall into one of four distinct types which we label the star factory engineering and commitment models multivariate statistical analyses document how the founder s employment model shaped the subsequent adoption and timing of various human resource policies and documents over these companies early histories as well as the speed with which the first full time human resource manager was appointed the findings are strongly suggestive of complementarities and a tendency toward internal consistency among dimensions of human resource management and of strong path dependence in the evolution of employment systems in organizations some implications of these findings for transactions cost perspectives on the employment relationship are discussed

structural stability and reconfiguration of international joint ventures previous research suggests that international joint ventures ijvs are inherently unstable and fragile this view has failed however to explain why many ijvs have an extended longevity and stability this paper draws on two contrasting perspectives from organization theory structural instability and structural inertia to trace both the destabilizing and stabilizing forces in ijvs and argues that a complete understanding of an ijv s dynamic evolution requires consideration of both forces

transaction cost theory inferences from clinical field research on downstream vertical integration a bulk of the marketing research on distribution channel design attempts to resolve the question of when a direct company owned sales operation would be preferred to an indirect independent distributor operation the widely accepted theoretical rationale is provided by transaction cost theory which indicates that the total costs of going to market inclusive of distribution as well as its administration is likely to be lower for the direct option when the sales transactions require investments in unique assets for effectively serving the end customer examples of unique assets are account specific sales teams and account dedicated repair and maintenance facilities conversely transaction cost theory indicates that an indirect option would be the more efficient one for sales transactions that require investments only in nonunique assets such as an inventory of standard parts since its formulation in 1975 the transaction cost framework has been empirically confirmed in a variety of marketing channel se

analysis of the iberian power forward price formation the price formation of the iberian energy derivatives market the power futures market starting in july 2006 is assessed until november 2011 through the evolution of the difference between forward and spot prices in the delivery period ex post forward risk premium and the comparison with the forward generation costs from natural gas clean spark spread the premium tends to be positive in all existing mechanisms futures over the counter and auctions for catering part of the last resort supplies since year 2011 the values are smaller due to regulatorily recognized prices for coal power plants the power futures are strongly correlated with european gas prices the spreads built with prompt contracts tend also to be positive the biggest ones are for the month contract followed by the quarter contract and then by the year contract therefore gas fired generation companies can maximize profits trading with contracts of shorter maturity