a novel inclusion of intermittent generation resources in long term energy auctions abstract long term energy auctions are positioning as a valuable tool in order to attract new investments into power systems especially in latin american countries where emergent economies characteristics and their correspondent risks are usually present even though the focus of these auctions is the long term there are short term issues involved which actual auction designs fail to include resulting in an energy allocation that is not necessarily optimal for the system a condition which becomes more evident in the presence of intermittent renewable technologies a novel mechanism is formulated to obtain the optimal allocation in long term energy auctions considering short term generation profiles from both intermittent and conventional base load technologies and also their risk aversions the proposed mechanism is developed and simulations are made for some scenarios in the chilean power market with different levels of renewable penetration significant cost savings are achieved for the final consumers in relation to energy purchases in comparison with a mechanism that follows the demand profile as more renewable intermittent capacity enters the power system it is evident the need for changes in the energy auctions allocation mechanisms including elements to exploit the synergies among participants in the short term

an index number approach to measuring bank efficiency an application to mergers abstract the current wave of bank mergers has resulted in an interest in the measurement of consequent efficiencies previous studies have generally focused on the measurement of merger induced cost efficiencies in this paper we turn to the production side and examine the change in relative productivity arising from bank mergers after deriving our superlative multilateral productivity index we compute the indexes for our entire sample of banks approximately 2 000 banks in each of the years 1984 1988 and for a cohort of 160 banks that merged in 1986 we find that acquiring banks achieve no gains in efficiency and this finding supports those of other studies on the other hand we find that our acquiring banks are consistently more productive than the sample as a whole by implication if mergers can be generally characterized as the acquisition by a relatively more productive bank of a relatively less productive bank an empirically valid supposition then industry performance should improve as a result of these mergers

can megamergers improve bank efficiency abstract this paper uses a fitted multiproduct translog cost function to simulate mergers between pairs of us commercial banks with assets exceeding 1 billion and studies the predicted impact of such mergers on total costs thick frontier analysis reveals that variations in x efficiency dominate scale product mix and branching efficiencies ex ante financial data imply that costs could potentially be reduced in nearly half of the possible mergers except those between banks each larger than 10 billion most cost efficient mergers are across state lines apparently a result of variations in product mix

market equilibrium under incomplete and imperfect information in bilateral electricity markets in contrast to the centralized pool model bilateral markets present a decision making situation in which information plays a major role along with the physical and operative constraints of the network we propose a model that includes network constraints for competitive bilateral electricity markets based on an evolutionary bipartite complex network in which the nodes and weighted links represent the players and transactions respectively the strong stable equilibrium of the network is applied to detect possible market equilibria obtained through a dynamic game with incomplete and imperfect information in which the players form an evolutionary network while trying to maximize their own utilities the model is conceptually illustrated with a four bus test system and then applied to the ieee30 test system to analyze the impact of the transmission network and information on the equilibria and market performance

evaluation of regulatory impacts on dynamic behavior of investments in electricity markets a new hybrid dp game framework a new hybrid framework based on game theory and dynamic programming dp with random demands and prices is proposed for studying the impacts of regulatory interventions on the dynamics of investment in power generation in electricity markets in our approach using markov chains the electric demand and growth of fuel prices have been modeled dp has been used for solving the generation expansion planning gep problem investment strategies of other investors in the market are modeled as constraints the income of the investor is calculated by modeling strategic interactions among market players in the spot energy market the cournot game concept has been applied and the nash equilibrium is calculated for each state and stage of dp simulation results confirm that the proposed framework is an appropriate decision support tool that provides useful information about dynamics of investment

bank commercial loan markets and the role of market structure evidence from surveys of commercial lending abstract this paper seeks to test two tenets that underlie the current practice of antitrust analysis in banking the first is the view that bank commercial loan markets are local in nature and the second is the view that banks in more concentrated markets are more likely to engage in some form of noncompetitive behavior tests of both of these tenets are conducted using an extensive set of loan specific survey information not previously employed to address these issues results consistent with the existence of local banking markets and the dominance of competitive differences as an explanation for observed differences in loan rates are found

deregulated power prices comparison of diurnal patterns we examine electrical power price and in particular its daily and average weekday vs weekend pattern of change for 14 deregulated markets power price in deregulated markets shows fundamentally different patterns north american markets show a monotonic diurnal weekday price pattern while all other markets studied show more than one price peak deregulated power markets differ in maximum vs minimum daily average price and in average weekday to weekend price in turn creating a different incentive for a consumer to time shift power consuming activities markets differ in the extent to which a small fraction of the days shapes the average diurnal pattern and value of price deregulated markets show a wide variation in the correlation between load and price some deregulated markets most notably britain and spain show patterns that are predictable and consistent and hence that can encourage a customer to shape consumption behaviors other markets for example south australia have patterns that are inconsistent and irregular and hence are hard for a customer to interpret a customer in such a market will have a higher incentive to escape risk through hedging mechanisms

nash equilibrium in strategic bidding a binary expansion approach this paper presents a mixed integer linear programming solution approach for the equilibrium problem with equilibrium constraints epec problem of finding the nash equilibrium ne in strategic bidding in short term electricity markets a binary expansion be scheme is used to transform the nonlinear nonconvex ne problem into a mixed integer linear problem milp which can be solved by commercially available computational systems the be scheme can be applicable to cournot bertrand or joint price quantity bidding models the approach is illustrated in case studies with configurations derived from the 95 gw brazilian system including unit commitment decisions to the price maker agents

transaction analysis in deregulated power systems using game theory the electric power industry is in transition to a deregulated marketplace for power transactions in this environment all power transactions are made based on price rather than cost a regional power pool is noted as the most straightforward path to a deregulated electricity marketplace however many questions remain unanswered regarding the economics of power pool participation in a deregulated energy marketplace participants are interested in maximizing their own profits regardless of the system wide profits it is perceived that competition will reduce the price of electricity for retail customers however the key issue for participants is related with the price definition to remain competitive in this paper the authors use game theory to simulate the decision making process for defining offered prices in a deregulated environment the outcome of this study may be used by power pool coordinators to discourage unfair coalitions a modified ieee 30 bus power system is used as a deregulated power pool to illustrate the main features of the proposed method

an input output model of water consumption analysing intersectoral water relationships in andalusia abstract this paper presents an input output model of sectoral water consumption created by combining the extended leontief input output model with the model of energy use developed by proops the analysis is applied to andalusia a region situated in the south of spain which is characterized by water shortage we determine which economic sectors consume the greatest quantities of water both directly and indirectly and to what extent this natural resource may become a limiting factor in the growth of certain production sectors the model allows us to distinguish between direct and indirect consumption thus offering the possibility of designing an economic and environmental policy oriented towards water saving additionally the model allows simulation of possible changes in water consumption caused by certain environmental measures as well as their consequences on the regional economy

bank capitalization and cost evidence of scale economies in risk management and signaling we amend the standard cost model to account for the role of financial capital in banking the cost function is conditioned on the level of capital but we model the demand for financial capital so that it can serve as a cushion against insolvency for potentially risk averse managers and as a signal of risk for less informed outsiders scale economies are then computed without assuming that the bank chooses a level of capitalization that minimizes cost we find evidence of substantial scale economies and that bank managers are risk averse and use the level of financial capital to signal the level of risk

consumer payment minimization in power pool auctions this paper presents a new methodology within the framework of centralized optimization for calculating optimal generation schedules that minimize energy payments by power pool consumers this paper addresses issues related to market structure and the operation of power pools such as bid evaluation generator no load and start up cost recovery generator unit operating constraints and market clearing price determination unlike conventional unit commitment algorithms that minimize total energy production costs the method presented here minimizes payments by power pool consumers a payment minimization objective leads to a different unit commitment and dispatch solution and lower market clearing prices additionally optimal allocation of generator no load and start up costs over the scheduling period is integrated in the bid evaluation process leading to a further reduction in consumer payments

the study of the impacts of potential coalitions on bidding strategies of gencos the paper studies the impacts of potential coalitions on bidding strategies of gencos in a pool based power market the generator under consideration can form any potential coalition with other generators subgroups are then formed and each of these subgroups consists of some members which coordinate their bidding strategies to achieve a common goal noncooperative gaming applies among all the subgroups while cooperative gaming applies among the members in each subgroup by implementation of bids sensitivities the paper presents an algorithm for the members in each coalition subgroup to obtain optimal bids which essentially is based on interior point optimal power flow ipopf model a priority list produced after optimal bids are found for all the potential combinations of coalition is used by the generator under consideration to bargain with members on the list the algorithm and model are tested by the ieee 30 bus system and numerical results are presented

efficiency effects of horizontal in market bank mergers abstract this study conducts tests to determine whether banks involved in horizontal mergers achieve efficiency improvements relative to other firms the analysis covers 898 bank mergers from 1981 to 1986 efficiency is measured by various expense ratios the results based on ols and logit analysis are robust they indicate that during 1981 1986 horizontal bank mergers did not yield efficiency gains notably the findings are based on the mergers believed to be most likely to result in efficiency gains i e they are horizontal mergers the firms exhibit considerable deposit overlap and the acquiring firms are on average more efficient than the acquired

are virtual water flows in spanish grain trade consistent with relative water scarcity abstract virtual water adds a new dimension to international trade and brings along a new perspective about water scarcity and water resource management most virtual water literature has focused on quantifying virtual water flows and on its application to ensure water and food security nevertheless the analysis of the potential gains from international trade at least from a water resources perspective needs to take into account both spatial and temporal variations of blue groundwater and stream flow and green soil moisture water as well as the socioeconomic and policy conditions this paper evaluates whether spanish international trade with grains is consistent with relative water scarcity for this purpose the study estimates the volume and economic value of virtual water flow through international grain trade for the period 1997 2005 which includes 3 years with different rainfall levels the calculations show that spain is a net virtual water importer through international grain trade the volume of net virtual water imports amounts to 3420 4383 and 8415 million m 3 in wet 1997 medium 1999 and dry 2005 years respectively valuing blue water at its shadow price or scarcity value blue water exports oscillate between 0 7 and 34 2 million euros for a wet and dry year respectively overall grain trade is apparently consistent with relative water scarcity as net imports increase in dry years however the evolution of grain exports expressed as a variation in quantity and volume does not match the variations in resource scarcity a disaggregated crop analysis reveals that there are other factors such as quality product specialization or the demand for a standardized product which also influence trade decisions and are not included in the notion of virtual water these facts among others can therefore create potential distortions in the application of virtual water to the analysis of specific trade patterns nevertheless from a water resources perspective virtual water can bring important insights across countries for improving water and land management globally fostering adaptation strategies to climate change and to transboundary resource management

strategic bidding under uncertainty a binary expansion approach this work presents a binary expansion be solution approach to the problem of strategic bidding under uncertainty in short term electricity markets the be scheme is used to transform the products of variables in the nonlinear bidding problem into a mixed integer linear programming formulation which can be solved by commercially available computational systems the be scheme is applicable to pure price pure quantity or joint price quantity bidding models it is also possible to represent transmission networks uncertainties scenarios for price quantity plant availability and load financial instruments capacity reinforcement decisions and unit commitment the application of the methodology is illustrated in case studies with configurations derived from the 80 gw brazilian system

optimal response of a thermal unit to an electricity spot market this paper addresses the optimal response of a thermal unit to an electricity spot market the objective is to maximize the unit profit from selling both energy and spinning reserve in the spot market the paper proposes a 0 1 mixed integer linear programming approach that allows a rigorous modeling of i nonconvex and nondifferentiable operating costs ii exponential start up costs iii available spinning reserve taking into account ramp rate restrictions and iv minimum up and down time constraints this approach overcomes the modeling limitations of dynamic programming approaches and is computationally efficient results from realistic case studies are reported

evaluation of drought management in irrigated areas this paper focuses on the economic consequences of droughts for the irrigation sector we develop a dynamic recursive mathematical programming farm model that assumes imperfect mobility of capital and labour as well as rational expectations about future water availability the model is calibrated to 12 representative farms belonging to three irrigation communities of the guadalquivir basin south spain and used to simulate the 1991 1997 period which included 3 years of intense drought results indicate that the drought imposed significant costs on farmers but show also that water managers partly exacerbated these costs by allocating excessive amounts of water to irrigators in the abundant years the model is also used to evaluate the benefits of a perfect water supply forecast and to simulate the economic gains of a voluntary water banking scheme results show that the benefits resulting from the perfect forecast of water supply 1 year ahead would represent a relative gain of 5 however a voluntary banking system would allow farmers to increase their benefits by 32 82 depending on the supply system

long term contract auctions and market power in regulated power industries a number of countries with oligopolistic power industries have used marginal cost pricing to set the price of energy for small customers this course of action however does not necessarily ensure an efficient outcome when competition is imperfect the purpose of this paper is to study how the auction of long term contracts could reduce market power we do so in a two firm two technology linear cost static model where demand is summarized by a price inelastic load curve in this context we show that the larger the proportion of total demand auctioned in advance the lower are both the contract and the average spot price of energy

auction approaches of long term contracts to ensure generation investment in electricity markets lessons from the brazilian and chilean experiences the implementation of auctions of long term electricity contracts is arising as an alternative to ensure generation investment and therefore achieve a reliable electricity supply the aim is to reconcile generation adequacy with efficient energy purchase correct risk allocation among investors and consumers and the politico economic environment of the country in this paper a generic proposal for a long term electricity contracts approach is made including practical design concepts for implementation this proposal is empirically derived from the auctions implemented in brazil and chile during the last 6 years the study is focused on practices and lessons which are especially useful for regulators and policy makers that want to facilitate the financing of new desirable power plants in risky environments and also efficiently allocate supply contracts among investors at competitive prices although this mechanism is generally seen as a significant improvement in market regulation there are questions and concerns on auction performance that require careful design and which are identified in this paper in addition the experiences and proposal described can serve to derive further mechanisms in order to promote the entrance of particular generation technologies e g renewables in the developed world and therefore achieve a clean electricity supply

dynamics of risk management tools and auctions in the second phase of the brazilian electricity market reform abstract in 2004 the reform of the brazilian electricity market underwent a thorough revision one of its causes was the electricity rationing that began in june 2001 and lasted until february 2002 among other measures the 2004 revision devised new mechanisms intended to reduce risks associated to contracts settled in electricity auctions and those related to investments in new generation plants as 4 years have passed since the onset of the reform s revision sufficiently enough data are now available for an analysis of the post revision dynamics of the brazilian electricity market this is the purpose of the present paper we focus on the dynamics of the different types of electricity auctions and on the so called mechanism for compensation of surpluses and deficits both created in the wake of the 2004 revision the ultimate goal is to understand the behavior of the agents involved in auctions notably buyers and sellers of electricity and propose remedial actions to eliminate existing loopholes in the present regulatory framework to achieve this goal four steps were necessary firstly a data base to support the analysis was built then the main drivers of the dynamics of the risk management tools were identified finally consequences of the implemented changes were discussed and corrections for observed pitfalls proposed

optimized offers for cascaded hydroelectric generators in a market with centralized dispatch we examine the problem of a generator offering generation and ancillary services from a set of cascaded hydroelectric units to a centrally dispatched market that does not account for watershed constraints by modeling the least cost dispatch problem and computing the resulting schedules and market prices we formulate a stochastic bilevel optimization problem that maximizes the generator s expected profits under different demand and supply realizations to account for potential infeasibilities in the resulting hydroelectric dispatch we include penalties in the generator s objective function we propose a simple technique that replaces the lower level dispatch problem with its linearized karush kuhn tucker optimality conditions to convert the problem to a single level mixed integer program we use two numerical case studies based on actual river systems to demonstrate the benefits of the proposed model

deregulated power prices comparison of volatility abstract we examine electrical power price variability for 14 deregulated markets power price volatility is measured by price velocity the daily average of the absolute value of price change per hour deregulated markets show a wide variability in price velocity some price velocity is expected and arises from the daily diurnal price pattern which differs significantly between markets even when the expected daily variability in price is removed the residual unexpected variability differs between markets some deregulated markets most notably britain and spain show patterns that are predictable and consistent and have low values of unexpected price velocity these markets create a climate conducive to consumers facing the market through real time pricing and shaping consumption behaviors in response to price changes other markets for example south australia and alberta have patterns that are inconsistent and irregular and hence are hard for a customer to interpret a customer in such a market will have a higher incentive to avoid demand side management and escape risk through hedging mechanisms

water use in the spanish economy an input output approach against the background of the water limitations that often appear in spain the aim of this paper is to study the behaviour of the productive sectors of the spanish economy as direct and indirect consumers of water to that end we employ input output analysis with the particular methodology being based on the linkages analysis known as the hypothetical extraction method hem we have introduced three modifications to this method first the valuation is made in terms of water consumption secondly we obtain the components of the impacts of each block of activity into which the economy is divided with these components being described as the internal effect mixed linkage net or external backward linkage and net or external forward linkage thirdly this methodology is used to detect key sectors our results confirm the marked importance of the agriculture food and other services blocks as regards the direct and indirect consumption of water in general we also find that other services chemicals metals and electronics and agriculture blocks play an important role in explaining the consumption of drinking water moreover the hem analysis allows us to classify productive sectors according to their forward or backward linkage character in a way that is more precise than that permitted by earlier methods finally this methodology can be extended to other types of environmental pressures 2002 elsevier science b v all rights reserved

artificial power markets and unintended consequences administrative pricing rules that try to mimic economic equilibria often fail to capture the complexity of real markets and in that failure can distort incentives as much as or more than cost based pricing in this paper the authors provide three examples of the failure of administrative mechanisms meant to mimic a market two of those examples are very relevant to current debates over industry restructuring in each case the pricing rule fails to maximize social welfare even though in the last two examples production cost is minimized

the globalization of virtual water flows explaining trade patterns of a scarce resource abstract water availability is paramount for security and development yet many countries suffer from water scarcity virtual water trade or trade in water embedded agricultural commodities has been considered a means for countries to overcome water deficits provided they can import food rather than produce locally despite a rich literature research on the subject has not reached a consensus on whether virtual water trade is actually driven by relative water endowment differentials e g countries seeking to alleviate pressure on their own resources or by comparative advantage in water utilization e g countries using their most abundant and cheap factors of production understanding what drives virtual water trade would support water management policies in targeting the roots of water depletion excessive use due to lack of other available inputs and bad water management due to absence of water use regulation using panel data of bilateral virtual water trade flows from 1994 to 2007 applied to a gravity model we first demonstrate that arid countries do resort to trade as a means to alleviate water scarcity second we demonstrate that there is much inefficiency in water use in some countries where other agricultural inputs land labor are available and cheap given the increased urgency related to global water scarcity our results suggest how agricultural production and trade could help countries preserve and better use precious water resources

deregulation intensity of competition industry evolution and the productivity growth of u s commercial banks we study the influence of the evolution in intrastate and interstate deregulations on the total factor productivity growth of u s commercial banking during 1971 95 we consider statewide deregulations in intrastate branching intrastate multibank holding company mbhc interstate multibank holding company and interstate mbhc de novo branching regulations results indicate that 1 long standing banking restrictions negatively affected banks productivity growth and 2 relaxing restrictions on intrastate branching expansion had a positive long run influence upon banks productivity growth the effect of interstate mbhc deregulations is largely short run and it is negative in the long run for interstate mbhc de novo branching deregulations

optimization based bidding strategies in the deregulated market with the deregulation of electric power systems market participants are facing an important task of bidding energy to an independent system operator iso this paper presents a model and a method for optimization based bidding and self scheduling where a utility bids part of its energy and self schedules the rest as in new england the model considers iso bid selections and uncertain bidding information of other market participants with appropriately simplified bidding and iso models closed form iso solutions are first obtained these solutions are then plugged into the utility s bidding and self scheduling model which is solved by using lagrangian relaxation testing results show that the method effectively solves the problem with reasonable amount of cpu time

offer stack optimization in electricity pool markets we consider a generator making offers of energy into an electricity pool market for a given time period it must submit an offer stack consisting of a fixed number of quantities of energy and prices at which it wants these quantities dispatched we assume that the generator cannot offer enough power to substantially affect the market price so the optimal response would be to offer energy at marginal cost however the market rules do not permit an arbitrary function so the problem is to find an offer stack approximating marginal cost in a way that maximizes its profit we give optimality conditions for this problem and derive an optimization procedure based on dynamic programming this procedure is illustrated by applying it to several examples with different costs of production

auction design in day ahead electricity markets competition in day ahead electricity markets has been established through auctions where generators and loads bid prices and quantities different approaches have been discussed regarding the market auction design multi round auctions despite its implementation complexity allow market participants to adapt their successive bids to market prices considering their operational and economic constraints however most of the day ahead electricity market implementations use noniterative single round auctions this paper presents a market simulator to compare both auction models different auction alternatives such as the spanish single round auction that takes into account special conditions included in the generator bids and multi round auctions with different stopping rules are analyzed the results and acquired experience in the simulation of the spanish market started in january 1998 are presented hourly market prices average daily price price demand correlation and several economic efficiency indicators such as generator surplus consumer surplus and social welfare are compared to derive conclusions regarding the performance of the auction alternatives

a game theoretic model for generation expansion planning problem formulation and numerical comparisons this paper presents an application of noncooperative game theory to generation expansion planning gep in a competitive electricity industry the authors apply the cournot model of oligopoly behavior to formulate a gep model that may characterize expansion planning in a competitive regime particularly in pool dominated generation supply industries numerical experiments are conducted on a test system to analyze generation investment and market participation decisions of candidate expansion units that vary in costs and forced outage rates the numerical results point to 1 greater industry expansion and system reliability under cournot competition than under centralized expansion planning and 2 higher probabilistic measures of reliability from multi player expansion than from expansion by a traditional monopolist with an equivalent reserve margin requirement furthermore the authors summarize analytical results involving a simplified version of the gep game

market offering strategies for hydroelectric generators this paper considers the problem of offering electricity produced by a series of hydroelectric reservoirs to a pool type central market the market model is a simplified version of the new zealand wholesale electricity market with prices modelled by a first order markov process the demand for electricity is not explicitly modelled the hydroelectric generator is assumed to be unable to influence market prices i e to be a price taker we discuss the resulting stochastic dynamic program methods for its solution and the explicit optimal offer curves that it produces it is shown that the utility function is monotone increasing with respect to both reservoir level and current price however the optimal offer curves need not be monotone this is shown by example numerical results are provided

linear complementarity models of nash cournot competition in bilateral and poolco power markets two cournot models of imperfect competition among electricity producers are formulated as mixed linear complementarity problems lcps and a simple example is presented to illustrate their application the two models simulate bilateral markets the models include a congestion pricing scheme for transmission but other transmission pricing approaches can also be represented in this framework the two models differ from each other in that one has no arbitrage between nodes of the network while in the other model arbitragers erase any noncost based differences in price the latter bilateral model turns out to be equivalent to a cournot model of a poolco the models differ from other cournot market models in that they include both of kirchhoff s laws via a dc approximation can include arbitragers possess unique solutions and are readily solved by efficient lcp algorithms the key assumption that permits their formulation as lcps is that each producer naively assumes that its output will not affect transmission prices

a gravity model of virtual water trade this work investigates the determinants of virtual water trade vwt ows by means of an estimated gravity model of trade applied to the virtual water embodied in the agricultural goods exchanged across countries in line with the recent literature on the gravity model the paper presents a battery of estimation methods cross section and panel ols and pseudo maximum likelihood with and without two way xed eects the analysis shows that bilateral vwt ows are aected by the classical determinants of trade but also by national water endowments as well as by the level of pressure on water resources these general ndings are robust even though some variation can be observed across the estimation methods and in particular when smaller sub samples of countries such as continents and regional groups are considered this contributes to account for the mixed evidence in the literature on the importance of water endowments for the vwt ows

a simulation model for a competitive generation market the simulation of a wholesale electricity market should go beyond a simple optimization based on the operating costs of the generating units a model of a competitive electricity market must consider the market structure the strategy of the market participants and any other factor that lead to prices different from costs this paper presents cosmee a model of a wholesale electricity market based on simple bids that estimates expected bid prices and quantities system hourly prices and generation schedules taking into account the bidding strategies of generators and the structure of the market the model reflects the profit maximizing behavior of the market agents subject to different types of constraints cosmee has been used to simulate a real wholesale market

the benefits and costs of geographic diversification in banking we estimate the benefits of geographic diversification within states and across states for bank risk and return for all u s bank holding companies over 1994 to 2008 and assess whether such benefits depend on bank size for small banks only intrastate diversification increases risk adjusted returns and reduces default risk while for very large institutions only interstate expansions are beneficial but only in terms of default risk in all cases the relationship ishump shaped indicating that at some point the possible agency costs associated with banks getting wider and more geographically diversified outweigh the benefits our results indicate that small banks and very large banks could still benefit from further geographic diversification email addresses celine meslier unilim fr celine meslier don morgan ny frb org donald p morgan katherine samolyk cfpb gov katherine samolyk tarazi unilim fr amine tarazi the views herein do not necessarily reflect those of the federal reserve system 2

openness central bank independence and the sacrifice ratio traditional explanations of the negative correlation between openness and inflation presume that an inverse relationship between the degree of openness and the sacrifice ratio reduces the inflation bias of descretionary monetary policy temple 2002 concludes however that such a relationship fails to emerge in cross country data our analysis of the same cross country data considered by temple indicates that once the degree of central bank independence and its interaction with greater openness and the sacrifice ratio in addition increased openness lessens the positive effect of central bank independence on the sacrifice ratio

discussion of a simulation model for a competitive generation market two sets of authors discuss the paper a simulation model for a competitive generation market see ibid vol 15 no 1 p 250 6 2000 requesting comments and clarification on the proposed simulation tool for mainland spain s competitive electricity market the original authors responses to these discussions are also included

back to the future rethinking auctions for renewable electricity support abstract the effectiveness and cost effectiveness of two main types of instruments feed in tariffs and quotas with tradable green certificates have usually been compared in the literature on renewable electricity promotion due to negative past experiences with a third instrument auctions this instrument has been broadly dismissed in academics and until recently also in policy practice however and based on an in depth review of experiences with auction schemes for renewable electricity around the world this paper argues that some of the problems with auctions in the past can be mitigated with the appropriate design elements and that indeed auctions can play an important role in the future implementation of renewable electricity support instruments around the world the paper provides a proposal for the coherent integration of several design elements

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

numerical solutions to nash cournot equilibria in coupled constraint electricity markets a numerical method based on a relaxation algorithm and the nikaido isoda function is presented for the calculation of nash cournot equilibria in electricity markets nash equilibrium is attained through a relaxation procedure applied to an objective function the nikaido isoda function which is derived from the existing profit maximization functions calculated by the generating companies we also show how to use the relaxation algorithm to compute and enforce a coupled constraint equilibrium which occurs if regulatory generation and distribution and more restrictions are placed on the companies and entire markets moreover we use the relaxation algorithm to compute players payoffs under several player configurations this is needed for the solution of our game under cooperative game theory concepts such as the bilateral shapley value and the kernel we show that the existence of both depends critically on demand price elasticity the numerical method converges to a unique solution under rather specific but plausible concavity conditions a case study from the ieee 30 bus system and a three bus bilateral market example with a dc model of the transmission line constraints are presented and discussed

the competitive dynamics of geographic deregulation in banking implications for productive efficiency deregulation of geographic restrictions in banking over the past 20 years has intensified both potential and actual competition in the industry the accumulating empirical evidence suggests that potential efficiency gains associated with consolidating banks are often not realized we evaluate the impact of this increased competition on the productive efficiency of nonmerging banks confronted with new entry in their local markets and find that the incumbent banks respond by improving cost efficiency thus studies evaluating the impact of bank mergers on the efficiency of the combining parties alone may be overlooking the most significant welfare enhancing aspect of merger activity

strategic bidding of a hydropower producer under uncertainty modified benders approach this paper proposes a stochastic bilevel program for strategic bidding of a hydropower producer the price quantity and ramp rate bids are considered the uncertainty of wind power generation variation of inflows for the hydropower producer and demand variability are modeled through the moment matching scenario generation technique using discretization the stochastic bilevel program is reformulated as a stochastic mixed integer linear program milp with disjunctive constraints we propose a modified benders decomposition algorithm mbda which fully exploits the disjunctive structure of reformatted milp model more importantly the mbda does not require optimal tuning of disjunctive parameters and it can be efficiently parallelized through an illustrative 5 node example we identify possible strategies specific to a hydropower producer for maximizing profit which in turn leads to market insights we also use the ieee 24 node 118 node and 300 node case studies to show how our parallelized mbda outperforms the standard benders decomposition algorithm the parallelized mbda is also compared to the state of the art cplex solver

refuting two claims about virtual water trade abstract using the heckscher ohlin trade model i refute two prominent but incorrect claims on virtual water trade these claims are that virtual water trade i levels uneven water distribution and ii reduces the potential for water conflict both claims are based on an incorrect understanding of comparative advantage in the production of water intensive goods the results show that both claims only hold under certain conditions but do not necessarily follow from the heckscher ohlin trade model

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

enjoying the quiet life under deregulation evidence from adjusted lerner indices for u s banks abstract the quiet life hypothesis posits that firms with market power incur inefficiencies rather than reap monopolistic rents we propose a simple adjustment to lerner indices to account for the possibility of forgone rents to test this hypothesis for a large sample of u s commercial banks we find that adjusted lerner indices are significantly larger than conventional lerner indices and trending upward over time instrumental variable regressions reject the quiet life hypothesis for cost inefficiencies however lerner indices adjusted for profit inefficiencies reveal a quiet life among u s banks

are mergers beneficial to consumers evidence from the market for bank deposits the general conclusion of the empirical literature is that in market consolidation generates adverse price changes harming consumers previous studies however look only at the short run pricing impact of consolidation ignoring effects that take longer to materialize using a database that includes detailed information on the deposit rates of individual banks in local markets for different categories of depositors we investigate the long run price effects of mergers we find strong evidence that although consolidation does generate adverse price changes these are temporary in the long run efficiency gains dominate over the market power effect leading to more favorable prices for consumers jel g21 g34 l1

water scarcity and food import a case study for southern mediterranean countries abstract taking six southern mediterranean countries as a case study this paper addresses the water food challenges facing water scarce countries and the implications for the world food economy by accounting the volume of virtual water embedded in food imports into the countries concerned a close relationship between water endowment and food import dependence is elaborated a projection of the cereal demand suggests an increment of 40 60 percentage points in these countries by 2020 above their 1998 99 levels raising the aggregate volume of cereal imports to around 40 million tons the analysis also finds that the trend of shifting from staple grain crops to higher value cash crops was weak during the past two decades a deteriorating trade deficit for both cereal and noncereal agricultural products was evident in almost all the countries suggesting a rigid and persistent constraint of water scarcity on overall agricultural development the results of this case study highlight two important points a food imports are imperative for compensating water resource deficiency b water scarcity related food imports will continue to expand and impose increasing impacts on the global food economy

estimating deficit probabilities with price responsive demand in contract based electricity markets studies that estimate deficit probabilities in hydrothermal systems have generally ignored the response of demand to changing prices in the belief that such response is largely irrelevant we show that ignoring the response of demand to prices can lead to substantial over or under estimation of the probability of an energy deficit to make our point we present an estimation of deficit probabilities in chile s central interconnected system between 2006 and 2010 this period is characterized by tight supply fast consumption growth and rising electricity prices when the response of demand to rising prices is acknowledged forecasted deficit probabilities and marginal costs are shown to be substantially lower

multi criteria modelling of irrigation water market at basin level a spanish case study abstract this paper develops a multi criteria methodology to simulate irrigation water markets at basin level for this purpose it is assumed that irrigators try to optimise personal multi attribute utility functions via their productive decision making process crop mix subject to a set of constraints based upon the structural features of their farms in this sense farmers with homogeneous behaviour regarding water use have been grouped such groups being established as types to be considered in the whole water market simulation model this model calculates the market equilibrium through a solution that maximises aggregate welfare which is quantified as the sum of the multi attribute utilities reached by each of the participating agents this methodology has been empirically applied for the duero basin northern spain finding that the implementation of this economic institution would increase economic efficiency and agricultural labour demand particularly during droughts

economies of scale technical change and persistent and time varying cost efficiency in indian banking do ownership regulation and heterogeneity matter abstract banks with different ownership types adjust differently to changes in regulatory environments although this topic has been widely studied all the previous studies fail to control for bank heterogeneity bank specific effects in estimating cost structure and efficiency we propose a model where we control for bank heterogeneity and introduce persistent and time varying inefficiency additionally we incorporate determinants of both persistent and time varying inefficiency as well as production risks furthermore our model allows estimation of different technologies for different ownership types jointly we use this model to analyze the effect of regulation in indian banking we find that private banks have not exhausted their economies of scale foreign banks are operating under diseconomies of scale especially after the reforms and scale economies of state owned banks are unaffected by regulation banks of all ownership types have enjoyed technical progress however foreign banks have benefited the most followed by state owned banks only state banks were able to improve their cost efficiency while private banks and especially foreign banks were lagging behind their cost frontiers

a scenario simulation approach for market power analysis in hydrothermal systems this paper focuses on markets based on physical bilateral contracts combined with a power exchange px the main feature to be analyzed is the behavior of the hydrothermal system where one or more companies have a big reservoir with capacity for inter annual regulation in this work inter annual regulation means the ability of a reservoir to allocate water from consecutive years the use of the reservoirs in a context of a power exchange market with competition is the main objective of this study results on the chilean central interconnected system using stochastic dynamic programming are presented and discussed

spot water markets and risk in water supply water availability patterns in semiarid regions are typically extremely variable even in basins with a highly developed infrastructure users are subject to unreliable water supplies incurring substantial economic losses during periods of scarcity more flexible instruments such as voluntary exchanges of water among users can help users to reduce risk exposure this article looks at the effects of spot water markets on the economic risk caused by water availability variations our theoretical and empirical risk analyses are based on the random profits of water users profit probability density functions are formally and graphically characterized for both water sellers and buyers under several possible market outcomes we conclude from this analysis that where water supply is stochastic water markets unambiguously reduce both parties risk exposure the empirical study is conducted on an irrigation district in the guadalquivir valley southern spain where there is a high probability of periods of extreme water scarcity water demand functions for the district representative irrigators and a spatial equilibrium model are used to simulate market exchanges and equilibrium this programming model is combined with statistical simulation techniques we show that the profit probability distribution of a representative irrigator is modified if water exchanges are authorized leading to risk reductions results also indicate that if the market were extended to several districts and users that are subject to varying hydrological risk exposure extremely low profit events would be less likely to occur in sum we show that exchanging water in annual spot markets can reduce farmers economic vulnerability caused by water supply variability across irrigation seasons these results support the water policy reform carried out in spain in 1999 to allow for voluntary water exchanges among right holders

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

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

china and trans pacific partnership agreement countries estimation of the virtual water trade of agricultural products abstract the trans pacific partnership agreement tppa is one of the most important multilateral free trade and investment agreements in recent years although as a major economic power in the asia pacific region china has yet to join the tppa existing research on china and tppa countries has mainly been conducted from political and economic perspectives this paper first reports the relationship between china and tppa countries from the perspective of virtual water trade of agricultural products and completes a diachronic analysis from 2001 to 2014 the results indicate that china was in virtual water trade surplus with tppa countries for agricultural products and that the surplus had an expansion trend the exported virtual water totalled 7 47 billion m 3 y whereas 63 45 billion m 3 y was embedded in imported products malaysia was the biggest virtual water surplus partner of china and japan was the biggest virtual water deficit partner additionally the proportion of the grey water footprint of agricultural products that china exported to tppa countries was about five times higher than that imported from tppa countries it reflected the difference of agricultural science and technology moreover the products structure of china s virtual water trade was not reasonable and was excessively focused on several products finally with respect to environmental and water allocation ethics tppa countries were classified into four types in terms of net import and water abundance mutual benefit countries australia canada new zealand the united states malaysia and chile unilateral benefit countries peru and brunei supported countries japan and singapore and double pressure countries mexico and vietnam with respect to the virtual water trade of agricultural products there is a close relationship between china and tppa countries the virtual water trade promotes the sustainability of water resources and the findings are conducive to the adjustment of trade structure to achieve optimal state of ecology economy and politics

multicommodity spatial cournot model for generator bidding analysis conventional behavioral models such as cournot to analyze generator behavior do not reflect many of the complexities of advanced electricity markets dispatch and pricing in a number of advanced pool based electricity markets worldwide explicitly recognize the co optimization of ancillary services as well as transmission constraints this paper discusses the development of and experiments with a multimarket cournot model that deals with co optimization of multiple commodities namely energy and various classes of ancillary services and deals with transmission constraints that separate these commodity markets spatially we also discuss the multimarket extension of the cournot model to deal with bilateral contracts for energy a nonlinear programming formulation of the proposed model and the analysis of nodal prices are presented followed by a detailed set of experiments using a simple three node system the model is expected to add to understanding of complex interactions between energy and ancillary services markets and further the impact transmission capacity limits may have on exercise of market power of each of these markets

discussion of hydrothermal market simulator using game theory assessment of market power the game theoretic model of cournot competition among owners of both thermal generation and reservoir constrained hydro facilities in an electricity market is similar to the papers of scott and read 1 and bushnell 2 the work here 3 offers a slightly different solution approach and an interesting application to data representing the circumstances in the chilean market a comparison of the results of these other markets new zealand and western u s respectively would be useful to understand the implications of small modeling differences in particular the bushnell model exploits a formulation as a linear complementarity problem which provides well known numerical procedures and a framework for analyzing the uniqueness of solutions villar and rudnick here motivate the contrast with chile s existing cost based pool by considering the example of the california market design of 1998 to 2000 however the california model includes much more and much that is not relevant to the analysis here given the problems of the california design it might be tempting to dismiss this paper but this would be a mistake the model analyzed here would be applicable for the market design in chile with only the move to a bid based rather than an audited cost based coordinated spot market the paper simplifies the analytical problem in two prominent features first the model assumes away the effects of transmission networks and the associated transmission constraints second the model employs the cournot assumption although the authors assert that something like the supply function equilibrium model would be closer to the observed behavior in the from of bid functions hence the role of the analysis is topro vide insight in tothe nature o f the strategic interactions rather than provide conclusive estimates of the magnitude of the exercise of market power hence the real value is in the authors interpretations and explanations of the results the analysis of physical and financial contracts and their effects on market power is a familiar result both types of contracts reduce the incentive toexercise seller s market po wer in the spo t market a novel result here about the greater volatility of the financial contracts flows from a particular modeling assumption in this model there is exact performance on physical contracts and therefore no effects of a failure to perform on a contract in reality of course failure to perform is normal through over or underdelivery to some degree depending on the balancing rules and payments this could eliminate any analytical difference between the contract types

an empirical study of applied game theory transmission constrained cournot behavior restructured energy markets present opportunities for the exercise of market power meaning market players can potentially maintain prices in excess of competitive prices in this paper we investigate cournot equilibrium in a simple example network we analyze three market players in a transmission constrained system and consider nonconstant marginal cost several scenarios are evaluated that show a pure strategy equilibrium can break down even when a transmission constraint exceeds the value of the unconstrained cournot equilibrium line flow

optimal bidding strategies for hydro electric producers a literature survey in a competitive environment with bid based markets power generation companies desire to develop bidding strategies that maximize their revenue in this paper we ask what approaches and methodologies have been used to model the bidding problem for hydro electric producers we present the problem s developments over time and through reviewing different variants of the problem progressively build to the case in which the agent is a price maker hydro electric producer in each variant of the bidding problem we examine how the approaches used to solve it may or may not be applicable to other variants last for the price maker hydro electric producer s bidding problem we recognize the most recent developments and illuminate a path for future efforts

bank consolidation and the dynamics of consumer loan interest rates this paper analyzes interest rates quoted by individual banks for personal and automobile loans in 10 cities personal loan rates are higher in concentrated markets and banks involved in mergers reduce personal rates relative to their competitors prior to the merger s completion this is consistent with mergers changing the size structure of personal loan markets and merger participants desire to gain regulatory approval auto rates are unaffected by local concentration and mergers suggesting that their market is nationwide rates for both loan types respond asymmetrically to changes in treasury rates being more sensitive to a rise than a fall

do mergers improve the x efficiency and scale efficiency of u s banks evidence from the 1980s a central issue currently debated among bank analysts and economists is whether mergers enhance the efficiency of surviving banks this paper investigates the postmerger performance of acquiring banks that participated in a merger during the period 1980 90 the evidence suggests that acquirers failed to improve x efficiency after the merger acquiring banks however experienced moderate gains in scale efficiency relative to a control sample the second part of the paper uses regression analysis to identify factors influencing the performance of merging banks the regression results suggest that improvements in postmerger performance depend on the ability of the bank to strengthen asset quality the author finds no evidence to support the theory that in market mergers lead to significant improvements in efficiency copyright 1997 by ohio state university press

optimal integrated generation bidding and scheduling with risk management under a deregulated daily power market in the deregulated power industry a generation company genco sells energy and ancillary services primarily through bidding at a daily market developing effective strategies to optimize hourly bid curves for a hydrothermal power system to maximize profits becomes one of the most important tasks of a genco this paper presents a unified framework for optimizing energy and reserve bidding strategies under a deregulated market in view of high volatilities of market clearing prices mcp the hourly mcps and reserve prices are modeled as discrete random variables whose probability mass functions are predicted with a classification based neural network approach the mean variance method is applied to manage bidding risks where a risk penalty term related to mcp and reserve price variances is added to the objective function to avoid buying too much power from the market at high prices a genco may also require covering at least a certain percentage of its own customer load this self scheduling requirement is modeled similar to the system demand in traditional unit commitment problems the formulation is a stochastic mixed integer optimization with a separable structure an optimization based algorithm combining lagrangian relaxation and stochastic dynamic programming is presented to optimize bids for both energy and reserve markets numerical testing based on an 11 unit system in new england market shows that the method can significantly reduce profit variances and thus reduce bidding risks near optimal energy and reserve bid curves are obtained in 4 5 minutes on a 600 hz pentium iii pc efficient for daily use

a dynamic analysis of a demand curve based capacity market proposal the pjm reliability pricing model because of high generation adequacy standards in the power industry some peaking capacity operates for a limited time during the year and may not receive sufficient energy revenues to meet its fixed costs this is particularly true when energy prices are capped in order to mitigate market power the northeastern u s independent system operators isos have responded to this issue by establishing capacity obligations for loads and markets for installed capacity thus providing a capacity revenue stream to generators the installed capacity icap markets in the northeastern u s markets are a response to this need for additional incentives to construct generation the federal energy regulatory commission ferc has accepted the pjm interconnection s pjm proposal to replace the present fixed icap requirement that is placed upon load serving entities lses with a demand curve based system in which the iso would be responsible for acquiring residual capacity on behalf of lses the demand curve approach pays more when reserve margins are smaller and provides a reduced incentive for investment when installed reserves are above the target another goal is to make revenues more predictable for generators making investment less costly and ultimately lowering prices for consumers a dynamic representative agent model is presented for projecting effects upon reserve margins generator profitability and consumer costs and is applied to alternative demand curves proposed for the pjm market the consumer costs resulting from a sloped demand curve are robustly lower compared to the present fixed requirement under a wide range of assumptions concerning behavior of generation owners including risk attitudes bidding behavior and willingness to build capacity as a function of forecast profit the cost savings arise from lower capital costs to generators due to reduced risk and risk premiums also average installed capacity is less for the same level of reliability because of reduced fluctuations in installed reserves

closure on hydrothermal market simulator using game theory assessment of market power equilibrium been reached in all iterations if multiple nash equilibria has been observed how was selected equilibrium position to provide the results etc in closing coordination problems can also take place in hydrothermal systems with bid based dispatch especially when two or more utilities share hydroplants in the same river cascade even though it was not the objective of the present work to address such issues it would be of greater value if the authors could provide their views about this aspect and how would it affect the market power analysis the authors are to be commended once again for their valuable work considering the important question of whether dispatchable hydro enjoys advantages in a power market run on bid based scheduling which is very important in a number of key power markets the issue is important because hydro is much more adaptable in near real time than traditional thermal plants and thus tends to enjoy an important position in many power markets i strongly encourage the authors to move forward to add the stochastic dimension to the model that will enhance its future developments

do substantial horizontal mergers generate significant price effects evidence from the banking industry this study examines the price effects of recent us bank mergers that substantially increased local market concentration using the deposit interest rates that banks offer their customers as our price measure we find that over the 1991 94 time period deposit rates offered by participants in substantial horizontal mergers and their local market rivals declined by a greater percentage than did deposit rates offered by banks not operating in markets in which such mergers took place we interpret our results as evidence that these mergers led to increased market power

hydrothermal market simulator using game theory assessment of market power the aim of this work is to build a model able to simulate a hydrothermal electric power market based on simple bids to a power exchange the model studies the behavior of different market agents in a short term horizon and delivers information about spot prices use of water and other relevant variables initially a thermoelectric market is simulated through a static model based on cournot concepts the addition of hydroelectric power stations and time dependencies is made later using a dynamic programming algorithm to build a dynamic model in each stage and state of the dynamic programming a nash cournot equilibrium is determined to assess the behavior of the thermoelectric power stations static model different strategies that firms can follow and the consequences of each one of them are analyzed market power mitigation effects of physical and financial bilateral contracts are also investigated a case study with data on the chilean power system is presented and analyzed

market competition and corporate performance empirical evidence from china listed banks with financial monopoly aspect theorists and policy experts generally believe that the higher degrees of financial monopoly and lower degrees of market competition can result in the higher performance level of companies especial

why do banks merge the banking industry is consolidating at an accelerating pace yet no conclusive results have emerged on the benefits of mergers and acquisitions in order to investigate the motives and results of each type of deal we consider separately acquisitions that is the purchase of the majority of voting shares and mergers using italian data mergers seek to improve income from services but the increase is offset by higher staff costs return on equity improves because of a decrease in capital acquisitions aim to restructure the loan portfolio of the acquired bank improved lending policies result in higher profits

valuing the impact of trade on local blue water international trade of agricultural goods impacts local water scarcity by quantifying the effect of trade on crop production on grid cell level and combining it with cell and crop specific virtual water contents we are able to determine green and blue water consumption and savings connecting the information on trade related blue water usage to water shadow prices gives us the possibility to value the impact of international food crop trade on local blue water resources to determine the trade related value of the blue water usage we employ two models first an economic land and water use model simulating agricultural trade production and water shadow prices and second a global vegetation and agricultural model modeling the blue and green virtual water content of the traded crops our study found that globally the international trade of food crops saves blue water worth 2 4 billion us this net saving occurs despite the fact that europe exports virtual blue water in food crops worth 3 1 billion us countries in the middle east and south asia profit from trade by importing water intensive crops countries in southern europe on the other hand export water intensive agricultural goods from water scarce sites deteriorating local water scarcity

modeling market power by natural gas producers and its impact on the power system strategic behavior by natural gas producers may influence the operation as well as the development of an electricity system within this paper a computational game theoretic investment model is presented which allows assessing market power by natural gas producers and its effects on the electricity market under consideration of emission markets the model is formulated as a mixed complementarity problem it uses typical time segments to represent both seasonal load fluctuations on the natural gas market and load fluctuations within a day on the electricity market investment is possible in natural gas production and lng infrastructure as well as power plants a test case is presented covering three regions and simultaneously optimizing power plant dispatch and utilization of transmission lines on the power market as well as supply transport and storage on the natural gas market we compute prices production volumes and power plant utilization for two different market power specifications to show the impact of oligopolistic market behavior

forecasting next day electricity prices by time series models in the framework of competitive electricity markets power producers and consumers need accurate price forecasting tools price forecasts embody crucial information for producers and consumers when planning bidding strategies in order to maximize their benefits and utilities respectively this paper provides two highly accurate yet efficient price forecasting tools based on time series analysis dynamic regression and transfer function models these techniques are explained and checked against each other results and discussions from real world case studies based on the electricity markets of mainland spain and california are presented

efficient determination of cournot equilibria in electricity markets this paper analyzes the deregulated electricity market using game theory and investigates the properties of cournot equilibrium points a new algorithm for the calculation of the cournot equilibrium of an electricity market in the absence of transmission constraints is presented the algorithm is based on the transformation of the cournot game into a three level decision making scheme with economic signal exchange the algorithm is tested on a hypothetical market in order to demonstrate the effects of market concentration and demand elasticity case studies indicate that the algorithm is very efficient computationally and therefore suitable for use with multi period production scheduling models for the electricity market

entry into the electricity market uncertainty competition and mothballing options the present paper analyzes the entry strategies into the electricity market of two firms that have power plants under price uncertainty and competition we consider the symmetric and asymmetric two firms which have either a thermal power plant or a nuclear power plant the differences between the thermal power plant and the nuclear power plant such as the cost structure and operational flexibility are modeled the threshold values of market entry are calculated for each firm with either the thermal power plant or the nuclear power plant as the leader or the follower we show the dependence of cost structures on entry thresholds of the leader and the follower into the electricity market for various market and cost conditions the diagrams of the leader are also shown

bank concentration and retail interest rates abstract the recent wave of mergers in the euro area raises the question whether the increase in concentration has offset the increase in competition in european banking through deregulation we test this question by estimating a simple cournot model of bank pricing we construct country and product specific measures of bank concentration and find that for loans and demand deposits increasing concentration may have resulted in less competitive pricing by banks whereas for savings and time deposits the model is rejected suggesting increases in contestability and or efficiency in these markets finally the paper discusses some implications for tests of the effect of concentration on monetary policy transmission

nash cournot equilibria in hydrothermal electricity markets a method is presented that allows finding the market clearance prices within a hydrothermal power exchange market that incorporates network constraints an analysis is made of the degree of market power exerted by the various agents the nash cournot equilibrium solution of the market is achieved using the nikaido isoda function which is derived from the profit maximization functions calculated by the generating companies both thermal hydro generation and network constraints are considered in the model with coupling constraints of the hydro units also taken into account the model is applied to the main chilean interconnected power system whose abundant hydro production and existing network bottlenecks make it a valuable suitable case for study the results for pool based and bilateral contract markets highlight the strength of the method and show the contribution of the transmission system and hydro constraints

market power assessment and mitigation in hydrothermal systems the objective of this paper is to investigate market power issues in bid based hydrothermal scheduling initially market power is simulated with a single stage nash cournot equilibrium model market power assessment for multiple stages is then carried through a stochastic dynamic programming scheme the decision in each stage and state is the equilibrium of a multi agent game thereafter mitigation measures specially bilateral contracts are investigated case studies with data taken from the brazilian system are presented and discussed

the price concentration relationship in banking the commonly observed positive correlation between market concentration and profitability may be explained by noncompetitive pricing behavior as argued by the structure performance hypothesis or by the greater efficiency of firms with dominant market shares as argued by the efficient structure hypothesis by examining the price concentration relationship instead of the profit concentration relationship this paper tests the structure performance hypothesis in a manner that excludes the efficient structure hypothesis as an alternative explanation of the results the results strongly support the structure performance hypothesis and are robust with respect to model specification measurement of concentration and econometric technique copyright 1989 by mit press