strategic demand side response to wind power integration this paper explores the effects of allowing large price responsive consumers to provide reserves in a power system with significant penetration of wind energy a bilevel optimization model represents the utility maximization problem of a large consumer subject to a stochastic day ahead co optimization of energy and reserves that a system operator would solve to clear the market while considering wind power uncertainty an examination of the market outcomes from both an illustrative and a large scale study using this model allows analysis of a the effects of the type of behavior of the large consumer i e strategic vs competitive b limits on the amount of reserves it is allowed to provide and c variability and accuracy of characterization of wind power uncertainty

an epec approach to the yearly maintenance scheduling of generating units this paper considers the yearly maintenance scheduling of generating units within a market environment each producer schedules its units maintenance periods to maximize its revenue using a bilevel approach the upper level problem of this bilevel model seeks maximum revenue and contains unit scheduling constraints while the lower level problems represent the market clearing process under different operating conditions this single producer maintenance problem can be recast as a mathematical program with equilibrium constraints mpec since the mpecs of all producers have to be considered simultaneously and the market clearing process is common to all of them the proposed formulation for maintenance scheduling is an equilibrium problem with equilibrium constraints epec corresponding to a multiple leader common follower game the solution of this epec is a set of equilibria in which none of the producers is able to increase its revenue unilaterally by changing the maintenance periods of its generating units

an economic theory of self control the concept of self control is incorporated in a theory of individual intertemporal choice by modeling the individual as an organization the individual at a point in time is assumed to be both a farsighted planner and a myopic doer the resulting conflict is seen to be fundamentally similar to the agency conflict between the owners and managers of a firm both individuals and firms use the same techniques to mitigate the problems which the conflicts create this paper stresses the implications of this agency model and discusses as applications the effect of pensions on saving saving and the timing of income flows and individual discount rates

purchase bidding strategies of an energy coalition with demand response capabilities the implementation of demand response programs drp has gained interest as a means to alleviate energy consumption during peak hours two explanations account for the success of such programs which involve both utilities and electricity consumers with the latter often organized into coalitions the system operator meets its goal of reducing the load peak simultaneously electricity consumers achieve economic benefits when reducing consumption during peak hours in this paper a monte carlo based algorithm has been proposed for the formulation of multiple purchase offers in the day ahead energy market daem by coalitions in which consumers vary in their sensitivity to drp manifesting different responsiveness to hourly tariffs based on the hourly market clearing prices being able to monitor how coalition members use air conditioning in the presence of variable hourly energy tariffs the coordinator can then define a purchase bidding strategy depending on how price sensitive the coalition is simulation results show that the presence of a price sensitive demand leads not only to a subsequent reduction in energy prices during peak hours but also leads to a decrease in their inter hour volatility

coordinated price maker operation of large energy storage units in nodal energy markets in this paper a new optimization framework is proposed to coordinate the operation of large price maker and geographically dispersed energy storage battery systems in a nodal transmission constrained energy market the energy storage units are assumed to be investor owned and independently operated seeking to maximize their total profit various design factors are taken into consideration such as the location size efficiency and charge and discharge rates of the energy storage units as well as the joint impact of the energy storage operations on the locational marginal prices while the formulated optimization problem is originally nonlinear and hard to solve nonlinearities are tackled both in the objective function and in the constraints and the problem is transformed into a tractable mixed integer linear program for which the global optimal solutions are found for the charge and discharge schedules of each energy storage unit both deterministic and stochastic design scenarios are addressed various case studies are presented it is observed that transmission line congestion is often but not always desirable for the coordinated storage systems locational diversity practice of arbitrage robust design self scheduling versus economic bidding and the overall power system performance are also investigated

market share market value and innovation in a panel of british manufacturing firms this paper examines the empirical relationship between technological innovations market share and stock market value new developments in the estimation of dynamic count data models are used to control for unobserved firm specific heterogeneity we find a robust and positive effect of market share on observable headcounts of innovations and patents although increased product market competition in the industry tends to stimulate innovative activity furthermore the impact of innovation on market value is larger for firms with higher market shares we argue that our results are consistent with models where high market share firms have incentives to pre emptively innovate

reinventing public r d patent policy and the commercialization of national laboratory technologies when innovations are heterogeneous it may be advantageous to provide a variety of patents by trading off patent breadth for length it is possible that fees are not needed in the optimal policy we present two examples the first is a quality ladder model in which innovations benefit society directly as well as through their use as building blocks to future inventions and the rate of arrival for the future innovation is unobserved more fertile innovations get more breadth for a shorter time menus may also be useful in the case of horizontal product differentiation copyright 2001 by the rand corporation

incentives for managers and inequality among workers evidence from a firm level experiment we present evidence from a firm level experiment in which we engineered an exogenous change in managerial compensation from fixed wages to performance pay based on the average productivity of lower tier workers theory suggests that managerial incentives affect both the mean and dispersion of workers productivity through two channels first managers respond to incentives by targeting their efforts towards more able workers implying that both the mean and the dispersion increase second managers select out the least able workers implying that the mean increases but the dispersion may decrease in our field experiment we find that the introduction of managerial performance pay raises both the mean and dispersion of worker productivity analysis of individual level productivity data shows that managers target their effort towards high ability workers and the least able workers are less likely to be selected into employment these results highlight the interplay between the provision of managerial incentives and earnings inequality among lower tier workers

subjective performance measures in optimal incentive contracts objective measures of performance are seldom perfect in response incentive contracts often include important subjective components that mitigate incentive distortions caused by imperfect objective measures this paper explores the combined use of subjective and objective performance measures in respectively implicit and explicit incentive contracts naturally objective and subjective measures often are substitutes sometimes strikingly so we show that if objective measures are sufficiently close to perfect then no implicit contracts are feasible because the firm s fallback position after reneging on an implicit contract is too attractive we also show however that objective and subjective measures can reinforce each other if objective measures become more accurate then in some circumstances the optimal contract puts more weight on subjective measures because the improved objective measures increase the value of the ongoing relationship and so reduce the firm s incentive to renege we also analyze the use of subjective weights on objective performance measures and provide case study evidence consistent with our analyses

the drivers of efficient knowledge transfer performance evidence from british universities using data from the united kingdom this study explores the institutional and environmental factors that influence universities efficiency in knowledge transfer while studies of universities knowledge transfer performance have so far focused on patent commercialisation and research contracting with industry it is increasingly acknowledged that universities engage in a broader range of knowledge transfer activities including consulting public engagement and provision of knowledge intensive services when these are taken into account less research intensive universities and those with a greater share of staff in the arts and humanities improve their relative efficiency more specialised older and larger institutions are more efficient performers while research intensity is no longer a strong predictor of efficiency

price maker bidding in day ahead electricity market for a retailer with flexible demands this study develops a short term planning model to determine the bidding curves on a day ahead market for a price maker retailer with flexible power demand it concerns the interactions between the spot price and the flexible demand both conditional value at risk and volume deviation risk are taken into account a numerical study using the data from the nordic electricity market is performed to investigate the influence of risk factors on the retailer s profit risk levels average spot price and total consumption three types of price elasticity are compared to show that the retailer can benefit from the flexibility in demand side in some cases the flexibility also leads to lower spot prices so that the customers in real time price based demand response can face a lower electricity price for per unit power consumption

push or pull performance pay incentives and information we study a principal agent model wherein the agent is better informed of the prospects of the project and the project requires both an observable and unobservable input we show 1 performance pay may not be optimal even if output is the only informative signal of an essential input 2 total surplus tends to be higher if one input is unobservable than if both inputs are observable and 3 bunching may arise amongst low and intermediate types we explore the implications for push and pull programs used to encourage r d activity but our results have applications beyond this context

scenario reduction for futures market trading in electricity markets to make informed decisions in futures markets of electric energy stochastic programming models are commonly used such models treat stochastic processes via a set of scenarios which are plausible realizations throughout the decision making horizon of the stochastic processes the number of scenarios needed to accurately represent the uncertainty involved is generally large which may render the associated stochastic programming problem intractable hence scenario reduction techniques are needed to trim down the number of scenarios while keeping most of the stochastic information embedded in such scenarios this paper proposes a novel scenario reduction procedure that advantageously compares with existing ones for electricity market problems tackled via two stage stochastic programming

the power of incentives variable pay is usually defined as pay that is tied to some measure of worker output the most typical form of variable pay historically was the piece rate which was more prevalent during the early part of the 20th century than it is at the beginning of the 21st there is a resurgence in variable pay particularly as it relates to executives whose pay is tied to output through some mechanism like stock options or bonuses that depend on individual or firm performance why use variable pay the typical reaction is that variable pay provides incentives to put forth effort although true discrete pay schemes also generate incentives much of the confusion in the literature results from the use of the terms high powered and low powered incentives which connote difference in ability to elicit worker effort it is more informative to make distinctions between discrete and continuous pay and between inputbased and output based pay 2 pay structures can be summarized by the following equation

are researchers deliberately bypassing the technology transfer office an analysis of tto awareness most universities committed to the commercialization of academic research have established technology transfer offices ttos nonetheless many researchers bypass these ttos and take their inventions directly to the marketplace while tto bypassing has typically been portrayed as deliberate and undesirable behavior we argue that it could be unintentional as many researchers may simply be unaware of the tto s existence taking an information processing perspective and using data on 3250 researchers in 24 european universities we examine researcher attributes associated with tto awareness our evidence confirms that only a minority of researchers are aware of the existence of a tto at their university tto awareness is greater among researchers who possess experience as entrepreneurs closed many research and consulting contracts with industry partners conduct research in medicine engineering or life sciences or occupy postdoctoral positions policy implications of these findings are discussed

a stochastic two settlement equilibrium model for electricity markets with wind generation incentives to encourage the uptake of renewable energy generation have fostered wind energy in many power systems these incentives usually take the form of market instruments e g feed in tariff or premium that are not directly amenable to optimization representations of the market in this paper we propose an equilibrium model of the short term market to address the impact of wind operation under different structural assumptions the model is formulated for several price taking risk averse firms in competition it accounts for wind generation uncertainty and embeds a representation of the day ahead and balancing mechanisms the consumer is modeled by a linear inverse demand function we focus on feed in premium as the incentive to wind as this is the instrument most favored today in european discussions the model is formulated as a stochastic equilibrium problem where the karush kuhn tucker kkt conditions from the optimization problem of each firm are simultaneously solved together with market clearing conditions on energy capacity for reserve and energy for reserve the problem for each firm consists of a two stage stochastic optimization problem with a recourse function based on the conditional value at risk cvar as a risk measure due to price taking assumptions the model is a single stage complementarity problem it is implemented and solved using the software gams an example based on a stylized simplification of the spanish power market and motivated by the impact of wind penetration on the revenue of conventional plants is used to illustrate the proposed approach

public service motivation as an argument for government provision a public service motivation psm inclines employees to provide effort out of concern for the impact of that effort on a valued social service though deemed to be important in the literature on public administration this motivation has not been formally considered by economists when a psm exists this paper establishes conditions under which government bureaucracy can better obtain psm motivated effort from employees than a standard profit maximizing firm the model also provides an efficiency rationale for low powered incentives in both bureaucracies and other organizations producing social services 2000 elsevier science s a all rights reserved

a bilevel approach to transmission expansion planning within a market environment we present a bilevel model for transmission expansion planning within a market environment where producers and consumers trade freely electric energy through a pool the target of the transmission planner modeled through the upper level problem is to minimize network investment cost while facilitating energy trading this upper level problem is constrained by a collection of lower level market clearing problems representing pool trading and whose individual objective functions correspond to social welfare using the duality theory the proposed bilevel model is recast as a mixed integer linear programming problem which is solvable using branch and cut solvers detailed results from an illustrative example and a case study are presented and discussed finally some relevant conclusions are drawn

why do poor people co hold debt and liquid savings i examine the use of flexible savings and loan accounts offered by safesave a microfinance institution serving poor slum dwellers in dhaka bangladesh i find that 59 per cent of the clients co ho

the impact of pressure on performance evidence from the pga tour abstract do large rewards lead to psychological pressure causing underperformance previous studies have tested this choking phenomenon using the world of sports but such studies often lack an explicit link between performance and reward this study utilizes a large pga tour dataset to more directly analyze the effect of pressure on individual performance by calculating the potential change in earnings from making or missing a putt on the final hole of a tournament we find that as the amount of money riding on a shot increases the likelihood that shot is made is significantly reduced

financial literacy and consumer credit portfolios we use survey data from a sample of uk households to analyse the relation ship between financialliteracy and consumer credit portfolios we show that individ uals who borrow on consumer credit exhibit worse financial literacy than those who do not borrowers with poor financialliteracy hold higher shares of high cost credit such as home collected credit mail order catalogue debt and payday loans than those with higher literacy we also show that individuals with poor financialliteracy are more likely to lack confidence when interpreting credit terms and to exhibit confusion over financialconcepts they are also less likely to engage in behaviour which might help them to improve their awareness of the credit market

a model of money and credit with application to the credit card debt puzzle many individuals simultaneously have significant credit card debt and money in the bank the credit card debt puzzle is given high interest rates on credit cards and low rates on bank accounts why not pay down the debt while economists have gone to elaborate lengths to explain this observation we argue it is a special case of the rate of return dominance puzzle from monetary economics we analyze the issue by extending standard monetary theory to incorporate consumer debt this seems interesting in its own right since developing models where money and credit coexist is a long standing challenge and it helps put into context recent discussions of consumer debt

university knowledge transfer private ownership incentives and local development objectives abstract we study the impact of private ownership incentive pay and local development objectives on university licensing performance we develop and test a simple contracting model of technology licensing offices using new survey information together with panel data on u s universities for 1995 99 we find that private universities are much more likely to adopt incentive pay than public ones but that ownership does not affect licensing performance conditional on the use of incentive pay adopting incentive pay is associated with about 30 40 percent more income per license universities with strong local development objectives generate about 30 percent less income per license but are more likely to license to local in state start up companies in addition we show that government constraints on university licensing activity are costly in terms of forgone license income and the creation of start up companies these results are robust to controls for observed and unobserved heterogeneity

a single settlement energy only electric power market for unpredictable and intermittent participants we discuss a stochastic programming based method for scheduling electric power generation subject to uncertainty such uncertainty may arise from either imperfect forecasting or moment to moment fluctuations and on either the supply or the demand side the method gives a system of locational marginal prices that reflect the uncertainty and these may be used in a market settlement scheme in which payment is for energy only we show that this scheme is revenue adequate in expectation

measuring self control problems we develop a survey instrument to measure self control problems in a sample of highly educated adults this measure relates in the manner that theory predicts to liquid wealth accumulation and personality measures yet while self control problems are typically seen as resulting in overconsumption and low wealth we identify a significant group who underconsume and thereby accumulate high levels of wealth in addition self control problems are smaller in scale for older than for younger respondents those who put money aside in retirement accounts may be delaying access to a point at which self control problems are no longer important jel d12 d14

a dual self model of impulse control we propose that a simple dual self model gives a unified explanation for several empirical regularities including the apparent time inconsistency that has motivated models of quasi hyperbolic discounting and rabin s paradox of risk aversion in the large and small the model also implies that self control costs imply excess delay as in the o donoghue and rabin models of quasi hyperbolic utility and it explains experimental evidence that increased cognitive load makes temptations harder to resist the base version of our model is consistent with the gul pesendorfer axioms but we argue that these axioms must be relaxed to account for the effect of cognitive load

regional co evolution of firm population innovation and public research evidence from the west german laser industry abstract we trace the co evolution of regional firm population sizes private sector patenting and public research in german laser research and manufacturing for over 40 years from the emergence of the industry to the mid 2000s qualitative as well as quantitative evidence suggests a co evolutionary process of mutual interdependence rather than a unidirectional effect of public research on private sector activities

salaries and piece rates compensation can take many forms remuneration can come as pecuniary payments as fringes such as health and pension benefits or as a nonpecuniary reward such as plush office furniture that costs the firm less than it benefits the worker a significant literature has examined the trade offs between pecuniary and nonpecuniary compensation the modern work having been pioneered by rosen 1974 more recently another body of literature has examined the selection of method of total compensation ignoring the distinction between pecuniary and nonpecuniary payment this work has focused on risk and incentive factors it has resulted in comparisons of compensation based on absolute output levels to that based on relative performance it has also led to explorations of the relation of compensation to experience over the work life 2 little attention has been paid to what may be among the most important and obvious distinction in methods of compensation namely the choice between a fixed salary for some period of time that is paying on the basis of input and some workers receive compensation that is specified in advance and not directly contingent on performance instead it depends on an input measure such as hours worked for others compensation is directly related to output this essay is an attempt to predict a firm s choice of compensation method piece rates are defined more rigorously among the more important factors discussed are worker heterogeneity incentives sorting considerations monitoring costs and asymmetric information one result is that salary workers tend to be of lower quality and more homogeneous than are their piece rate counterparts numerous additional results are provided helpful comments by victoria lazear and yoram weiss are gratefully acknowledged support was provided by the department of labor and the national science foundation 1 see lazear and rosen 1981 stiglitz 1981 holmstrom 1982 green and stokey 1983 2 see lazear 1979 1981 and harris and holmstrom in press

the tenuous trade off between risk and incentives empirical work testing for a negative trade off between risk and incentives has not had much success the data suggest a positive relationship between measures of uncertainty and incentives rather than the posited negative trade off i argue that the existing literature fails to account for an important effect of uncertainty on incentives through the allocation of responsibility to employees when workers operate in certain settings firms are content to assign tasks to workers and monitor their inputs by contrast when the situation is more uncertain they delegate responsibility to workers but to constrain their discretion base compensation on observed output

pricing energy and reserves using stochastic optimization in an alternative electricity market this paper presents a stochastic linear programming model that can be used for pricing in electrical energy and reserve markets it addresses capacity energy and reserve dispatch problems that may arise from n 1 contingency scenarios possible market solutions focusing on generator compensation using real time day ahead and hybrid schemes are enumerated along with opportunities for consumer pricing and transmission costing this model is illustrated on a 6 bus test system as well as a larger 66 bus system representing the ontario network a key difference among schemes is the degree of risk to the generators measured by variance in profit

pricing electricity in pools with wind producers this paper considers an electricity pool that includes a significant number of wind producers and is cleared through a network constrained auction one day in advance and on an hourly basis the hourly auction is formulated as a two stage stochastic programming problem where the first stage represents the clearing of the market and the second stage models the system operation under a number of plausible wind production realizations this formulation co optimizes energy and reserve and allows deriving both pool energy prices and balancing energy prices these prices result in both cost recovery for producers and revenue reconciliation a case study of realistic size is used to illustrate the functioning of the proposed pricing scheme

do liquidity constraints and interest rates matter for consumer behavior evidence from credit card data this paper utilizes a unique new dataset of credit card accounts to analyze how people respond to changes in credit supply the data consist of a panel of thousands of individual credit card accounts from several different card issuers with associated credit bureau data we estimate both marginal propensities to consume mpcs out of liquidity and interest rate elasticities we also evaluate the ability of different models of consumption to rationalize our results distinguishing the permanent income hypothesis pih liquidity constraints precautionary saving and behavioral models we find that increases in credit limits generate an immediate and significant rise in debt counter to the pih the average mpc out of liquidity ddebt dlimit ranges between 10 14 the mpc is much larger for people starting near their limits consistent with binding liquidity constraints however the mpc is significant even for people starting well below their limit we show this response is consistent with buffer stock models of precautionary saving nonetheless there are other results that conventional models cannot easily explain e g why so many people are borrowing on their credit cards and simultaneously holding low yielding assets unlike most other studies we also find strong effects from changes in account specific interest rates the long run elasticity of debt to the interest rate is approximately 1 3 less than half of this elasticity represents balance shifting across cards with most reflecting net changes in total borrowing the elasticity is larger for decreases in interest rates than for increases which can explain the widespread use of temporary promotional rates the elasticity is smaller for people starting near their credit limits again consistent with liquidity constraints

the firm as the locus of social comparisons standard promotion practices versus up or out we suggest a parsimonious dynamic agency model in which workers have status concerns a firm is a promotion hierarchy in which a worker s status depends on past performance we investigate the optimality of two types of promotion hierarchies i standard promotion practices where agents have a job guarantee and ii up or out in which agents are fired when unsuccessful we show that up or out is optimal if success is difficult to achieve when success is less hard to achieve standard promotion practices are optimal provided the payoffs associated with success are moderate otherwise up or out is again optimal

the red and the black mental accounting of savings and debt in the standard economic account of consumer behavior the cost of a purchase takes the form of a reduction in future utility when expenditures that otherwise could have been made are forgone the reality of consumer hedonics is different when people make purchases they often experience an immediate pain of paying which can undermine the pleasure derived from consumption the ticking of the taxi meter for example reduces one s pleasure from the ride we propose a double entry mental accounting theory that describes the nature of these reciprocal interactions between the pleasure of consumption and the pain of paying and draws out their implications for consumer behavior and hedonics a central assumption of the model which we call prospective accounting is that consumption that has already been paid for can be enjoyed as if it were free and that the pain associated with payments made prior to consumption but not after is buffered by thoughts of the benefits that the payments will finance another important concept is coupling which refers to the degree to which consumption calls to mind thoughts of payment and vice versa some financing methods such as credit cards tend to weaken coupling whereas others such as cash payment produce tight coupling our model makes a variety of predictions that are at variance with economic formulations contrary to the standard prediction that people will finance purchases to minimize the present value of payments our model predicts strong debt aversion that they should prefer to prepay for consumption or to get paid for work after it is performed such pay before sequences confer hedonic benefits because consumption can be enjoyed without thinking about the need to pay for it in the future likewise when paying beforehand the pain of paying is mitigated by thoughts of future consumption benefits contrary to the economic prediction that consumers should prefer to pay at the margin for what they consume our model predicts that consumers will find it less painful to pay for and hence will prefer flat rate pricing schemes such as unlimited internet access at a fixed monthly price even if it involves paying more for the same usage other predictions concern spending patterns with cash charge or credit cards and preferences for the earmarking of purchases we test these predictions in a series of surveys and in a conjoint like analysis that pitted our double entry mental accounting model against a standard discounting formulation and another benchmark that did not incorporate hedonic interactions between consumption and payments our model provides a better fit of the data for 60 of the subjects the discounting formulation provides a better fit for only 29 of the subjects even when allowing for positive and negative discount rates the pain of paying we argue plays an important role in consumer self regulation but is hedonically costly from a hedonic perspective the ideal situation is one in which payments are tightly coupled to consumption so that paying evokes thoughts about the benefits being financed but consumption is decoupled from payments so that consumption does not evoke thoughts about payment from an efficiency perspective however it is important for consumers to be aware of what they are paying for consumption this creates a tension between hedonic efficiency and what we call decision efficiency various institutional arrangements such as financing of public parks through taxes or usage fees play into this tradeoff a producer developing a pricing structure for their product or service should be aware of these two conflicting objectives and should try to devise a structure that reconciles them

competition and incentives with motivated agents a unifying theme in the literature on organizations such as public bureaucracies and private nonprofits is the importance of mission as opposed to profit as an organizational goal such mission oriented organizations are frequently staffed by motivated agents who subscribe to the mission this paper studies incentives in such contexts and emphasizes the role of matching the mission preferences of principals and agents in increasing organizational efficiency matching economizes on the need for high powered incentives it can also however entrench bureaucratic conservatism and resistance to innovations the framework developed in this paper is applied to school competition incentives in the public sector and in private nonprofits and the interdependence of incentives and productivity between the private for profit sector and the mission oriented sector through occupational choice jel d23 d73 h41 l31 the late twentieth century witnessed a historic high in the march of market capitalism with unbridled optimism in the role of the profit motive in promoting welfare in the production of private goods moreover this generated a broad consensus on the optimal organization of private good production through privately owned competitive firms when it comes to the provision of collective goods no such consensus has emerged debates about the relative merits of public and private provision still dominate this paper suggests a contracting approach to the provision of collective goods it focuses on two key issues how to structure incentives and the role of competition between providers at its heart is the idea that organizations that provide collective goods cohere around a mission 2 thus production of collective goods can be viewed as mission oriented

technology transfer offices and commercialization of university intellectual property performance and policy implications the recent increase in the rate of commercialization of intellectual property at us and european universities has important performance and policy implications we review recent studies of the antecedents and consequences of these activities and then draw some lessons learned for policy makers a key conclusion is that universities and regions must formulate and implement coherent and feasible technology transfer commercialization strategies

self control financial literacy the co holding puzzle we use uk survey data to analyze the puzzling co existence of high cost revolving consumer credit alongside low yield liquid savings in household balance sheets which we name the co holding puzzle approximately 12 of households in our sample co hold on average 3800 of revolving consumer credit on which they incur interest charges even though they could immediately pay down all this debt using their liquid assets co holders are typically more financially literate with above average income and education in most estimates co holding is also associated with impulsive spending behavior on the part of the household our results provide empirical support to theoretical models in which households co hold as a means of managing self control problems

purchase allocation and demand bidding in electric power markets the purchase allocation problem is one of the most important problems faced by an electric energy service provider under new market environments the optimal purchase allocation problem for dual electric power markets and demand bid generation are discussed in this paper the price volatility is explicitly considered in purchase allocation problems and the sequential nature is modeled by conditional stochastic characteristics an analytical solution for the optimal allocation is derived with given demand and statistical characteristics of the market prices the method for generating demand bids for purchaser based on market allocation and price forecasting is then developed the numerical simulations for market allocation and bid generation are demonstrated based on the actual data of the u s california power market

wealth accumulation and the propensity to plan why do similar households end up with very different levels of wealth we show that differences in the attitudes and skills with which they approach e nancial planning are a signie cant factor we use new and unique survey data to assess these differences and to measure each household s propensity to plan we show that those with a higher such propensity spend more time developing e nancial plans and that this shift in planning is associated with increased wealth these e ndings are consistent with broad psychological evidence concerning the benee cial impacts of planning on goal pursuit those with a high propensity to plan may be better able to control their spending and thereby achieve their goal of wealth accumulation we e nd direct evidence supporting this effortful self control channel in the very strong relationship we uncover between the propensity to plan and budgeting behavior

strategic generation investment using a complementarity approach this paper provides a methodology to assist a strategic producer in making informed decisions on generation investment a single target year is considered with demand variations modeled through blocks the strategic behavior of the producer is represented through a bilevel model the upper level considers both investment decisions and strategic production actions and the lower level corresponds to market clearing prices are obtained as dual variables of power balance equations rival uncertainties on offering and investment are characterized through scenarios the resulting model is a large scale mixed integer lp problem solvable using currently available branch and cut techniques results pertaining to an illustrative example and a case study are reported and discussed

governance and contract choice theory and evidence from groundwater irrigation markets abstract this paper examines the role governance institutions play in the adoption of contracts we develop a simple model of the contracting relationship in a setting where unverifiable outcomes exist and use it to interpret data on groundwater irrigation contracts in bangladesh a distinguishing feature of this market is the variety of village level institutions which impose different degrees of punishment for contract violation consistent with the model we find households adopt contracts that rely on unverifiable outcomes which are not formally contractible when punishment for contract violation is weak conversely households adopt contracts that rely on formally contractible and verifiable outcomes when punishment is severe this evidence is consistent with contract terms being chosen optimally given what is or is not formally contractible

multi area unit scheduling and reserve allocation under wind power uncertainty this paper proposes a decentralized methodology to optimally schedule generating units while simultaneously determining the geographical allocation of the required reserve we consider an interconnected multi area power system with cross border trading in the presence of wind power uncertainty the multi area market clearing model is represented as a two stage stochastic programming model the proposed decentralized procedure relies on an augmented lagrangian algorithm that requires no central operator intervention but just moderate interchanges of information among neighboring regions the methodology proposed is illustrated using an example and a realistic case study

the trade off between supervision cost and performance based pay does gender matter the study adds to the literature by providing new empirical evidence consistent with efficiency wage theory and by providing estimates of the average cost of supervising a worker by industry this research uses the 1996 wave of the nlsy and incorporates estimates of supervision cost computed from industry classifications we further detect presence of no gender differences neither in risk averseness nor in productivity gains associated with cost of supervision and performance based pay while the findings imply that employers should consider the incentive effects of supervision and performance based pay when constructing pay schemes there is no need for employers to devote resources to constructing gender specific payment mechanisms our evidence suggests that profit maximizing firms should treat males and females equally and develop gender neutral pay schemes

economic and environmental implications of different approaches to hedge against wind production uncertainty in two settlement electricity markets a pjm case study abstract this paper examines the economic and environmental outcomes of four two settlement electricity market clearing designs the first design corresponds to a deterministic market clearing dmc similar to the mechanism currently used in organized wholesale electricity markets in the united states the other three designs account for the day ahead da wind power production uncertainty into the da market mechanisms either implicitly or explicitly an augmented deterministic market clearing admc design introduces da ramp capability products these products ensure adequate and ramp feasible electricity generation capacity commitments in the da stage to cope with the real time realization of wind power generation a hybrid deterministic market clearing hdmc design augments admc by explicitly integrating a characterization of wind power production uncertainty into the residual unit commitment ruc process which is run after the da market is closed using stochastic programming the last design referred to as stochastic market clearing smc uses stochastic optimization to explicitly account for wind power production uncertainty in the da market clearing mechanisms i e da unit commitment and economic dispatch the four market clearing designs are assessed by simulating the electricity market operations of a test system and comparing their results in terms of operating costs prices costs and revenues of different types of producers consumer s payments integration of wind power and air emissions the test system has 12 of the capacity of pjm s fossil fired power generation fleet and uses data on coincident demand and wind power production from the bonneville power administration bpa system during years 2010 2014 the simulations are performed hourly for a whole year results show that smc is superior as its costs reductions are more than two times the improvements attained by admc and hdmc also smc results in electricity prices that are better aligned with operation costs cuts the spread between the day ahead and real time prices by 40 reduces out of market short term revenue sufficiency payments by 58 reduces co2 emissions by 3 52 and decreases power plants cycling hdmc is a distant second best market design relative to dmc it achieves a reduction in total costs that is less than half the reduction achieved by smc a reduction in out of market payments that is 80 of the reduction attained by smc and an increase in wind power integration that is

exploiting naivete about self control in the credit market we develop a model of the credit market where competitive lenders oer long term contracts specifying a non linear schedule of possible repayment schedules to borrowers who may dier both in their taste for immediate gratication and their prior beliefs about that taste the equilibrium contract to a borrower with given beliefs is discontinuous it features an advantageous option involving fast repayment and a penalty for deviating and repaying later these predictions seem to resemble some salient features of many credit card and mortgage contracts for fully sophisticated borrowers the discontinuity acts as a commitment device and yields fast repayment but all other borrowers even those with an arbitrarily small amount of naivete end up delaying repayment despite the penalty and receive little benet from commitment furthermore because they believe they will repay early they underestimate the cost of credit and hence borrow too much non sophisticated borrowers cross subsidize sophisticated borrowers while sophisticated borrowers discipline rms by preventing very exploitative contracts we identify natural conditions under which the above results obtain even if