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

price discrimination through offers to match price in this paper a firm discriminates between two classes of customer who have a different cost of information by coupling a list price with an offer to match the pr ice of any other shop if the list price elsewhere is lower the firm will be successful in discrimination the list price of each firm is increasing in the number of sellers and the total sales are decreasi ng in the number of sellers furthermore if sellers coordinate they discriminate more efficaciously and increase their profits by increa sing their total sales copyright 1987 by the university of chicago

input demand under yield and revenue insurance previous studies disagree on the effects of insurance on fertilizer application rates the effect of increased fertilizer on the probability of low yields primarily determines whether fertilizer and insurance are substitutes or complements we estimate conditional distributions of corn yields to determine if the technical relationship between yields and fertilizer supports the hypothesis that insurance increases optimal application rates our results indicate no support for this hypothesis at all nitrogen fertilizer rates and reasonable levels of risk aversion nitrogen fertilizer and insurance are substitutes suggesting that those who purchase insurance are likely to decrease nitrogen fertilizer applications

guaranteed lowest prices do they facilitate collusion abstract the effects of a policy guaranteeing lowest price are analyzed in a two stage game where firms first decide whether to adopt such a policy and then choose prices symmetric and asymmetric games are solved to examine the extent to which prices can rise to collusive levels

price matching policy and the principle of minimum differentiation this paper shows that if duopolists are allowed to choose their product locations a price matching policy and their prices sequentially and independently both tacit collusion and minimum differentiation occur copyright 1995 by blackwell publishing ltd

on competing mechanisms under exclusive competition abstract we study games in which several principals design mechanisms in the presence of privately informed agents competition is exclusive each type of each agent can participate with at most one principal and meaningfully communicate only with him exclusive competition is at the center stage of recent analyses of markets with private information economic models of exclusive competition restrict principals to use standard direct mechanisms which induce truthful revelation of agents exogenous private information this paper investigates the rationale for this restriction we provide two results first we construct an economic example showing that direct mechanisms fail to completely characterize equilibrium outcomes even if we restrict to pure strategy equilibria second we show that truth telling strongly robust equilibrium outcomes survive against principals unilateral deviations toward arbitrary mechanisms

input use decisions with greater information on crop conditions implications for insurance moral hazard and the environment emerging precision agriculture technologies allow farms to make input decisions with greater information on crop conditions this greater information occurs by providing improved predictions of crop yields using remote sensing and crop simulation models and by allowing farms to apply inputs within the growing season when some crop conditions are already realized we use a stylized model with uncertainty in yield and price to examine how greater information on crop conditions i e a forecast affects input use for insured and uninsured farms we show that moral hazard decreases farms apply more inputs as the forecast accuracy improves when the forecast indicates good yields and vice versa when the forecast indicates bad yields in the long run moral hazard decreases in response to an improvement in forecast accuracy even though moral hazard decreases in the long run indemnity payments are likely to increase in the long run driven by the increase in moral hazard when the forecast indicates bad crop conditions we use the results of our model to discuss the potential impact of different technologies and types of inputs on the federal crop insurance program and the environment

a multiple objective decision support model for the selection of remote load control strategies utilities frequently use remote load control as an effective means to achieve suitable network operational conditions this procedure usually designated load management lm is a part of the resources considered under the general designation of demand side management dsm however the use of lm in electric distribution network management is a problem that involves different conflicting aspects such as reducing peak demand maximizing utility profits and minimizing discomfort caused to consumers hence the problem is multiobjective in nature economical technical and quality of service aspects must all be explicitly accounted for in mathematical models this paper presents a multiobjective decision support model which allows the consideration of the main concerns that have an important role in lm minimize peak demand as perceived by the distribution network dispatch center maximize utility profit corresponding to the energy services delivered by the controlled loads maximize quality of service in the context of lm

on the role of information in decision making the case of sorghum yield in burkina faso this paper investigates the role of temporal uncertainty and information issues in economic decisions it shows that the nature of the economic environment e g the production technology can influence the valuation of information which in turn affects the choice functions this is illustrated by an empirical application to sorghum yield response analysis in burkina faso the paper stresses the importance of technology and information valuation in risk behaviour

contractible contracts in common agency problems this article analyses contractual situations between many principals and many agents the agents have private information and the principals take actions principals have the ability to contract not only on the reports of the agents but also on the contracts offered by other principals contracts are required to be representable in a formal language the main result of the article is a characterization of the allocations that can be implemented as equilibria in our contracting game we then restrict attention to exclusive contracting environments in which the agent may select the contract of at most one principal in this setting our characterization result implies that principals can collude to implement the monopolist outcome finally in general equilibrium contracts turn out to be incomplete that is a contract will restrict the action space of a principal but will not necessarily determine a single action

on the incidence and variety of low price guarantees abstract this paper provides evidence of the incidence and variety of low price guarantees promises to match or beat a rival s price using data obtained from newspaper advertisements in 37 metropolitan areas in the united states we have a total of 515 low price guarantees in our sample we document their features and we infer firms motives and effects from these features the evidence suggests that the majority of low price guarantees are not consistent with their use as a facilitating device because they tend to apply only to rival firms advertised prices or they are associated with high hassle costs the evidence also suggests that price beating and price matching guarantees differ significantly in their features the former are associated with higher hassle costs apply disproportionately to rival firms advertised prices and are more likely to allow postsale search than are price matching guarantees

how low is a guaranteed lowest price a game based on the bertrand duopoly model is constructed to study the effects of price guarantee policies before it chooses a list price a firm can make a binding commitment to match or beat its competitor s price the effectiveness of these price guarantee policies in facilitating price collusion depends on the solution concept used furthermore there exists an equilibrium in which neither firm offers any price guarantees and each firm sets price equal to marginal cost

information and the concept of option value this paper examines the arrow fisher henry concept of option value and analyzes its properties including its relationship to the value of information and the effects of increasing uncertainty about the future consequences of irreversible development it is shown that this option value is distinct from but bounded by the value of information in the overall decision problem also it is distinct from a concept of option value that appears in b s bernanke quart j econom 98 85 106 1983 however when there is a continuum of development levels rather than a binary choice between full development and no development some of these conclusions need to be modified

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

the revelation and delegation principles in common agency games in the context of common agency adverse selection games we illustrate that the revelation principle cannot be applied to study equilibria of the multi principal games we then demonstrate that an extension of the taxation principle what we term the delegation principle can be used to characterize the set of all common agency equilibria this abstract was borrowed from another version of this item

non exclusive competition in the market for lemons in order to check the impact of the exclusivity regime on equilibrium allocations we set up a simple akerlof like model in which buyers may use arbitrary taris under exclusivity we obtain the zero profit separating riley rothschilds stiglitz allocation under non exclusivity there is also a unique equilibrium allocation that involves a unique price as in akerlof 1970 these results can be applied to insurance in the dual model in yaari 1987 and have consequences for empirical tests of the existence of asymmetric information

arima models to predict next day electricity prices price forecasting is becoming increasingly relevant to producers and consumers in the new competitive electric power markets both for spot markets and long term contracts price forecasts are necessary to develop bidding strategies or negotiation skills in order to maximize benefit this paper provides a method to predict next day electricity prices based on the arima methodology arima techniques are used to analyze time series and in the past have been mainly used for load forecasting due to their accuracy and mathematical soundness a detailed explanation of the aforementioned arima models and results from mainland spain and californian markets are presented

on the use of low price guarantees to discourage price cutting abstract this paper formulates a novel test to assess whether and to what extent firms might be using low price guarantees to discourage their rivals from cutting prices the test is based on a comparison of paired observations of advertised prices that are set by competing firms at the same point in time on similar items where one price is set by a firm that has a low price guarantee and the other by a firm that does not have a low price guarantee using data on retail tire prices we find that the majority of paired observations involving firms that have price matching guarantees are consistent with what one would expect if firms were using them to discourage price cutting whereas the majority of paired observations involving firms that have price beating guarantees are not this suggests that price matching and price beating guarantees may be serving different purposes the evidence also suggests that guarantees that apply to advertised prices only may be serving different purposes than guarantees that apply to both advertised and selling prices

a model of duopoly and meeting or beating competition this paper analyzes the use of meeting and beating competition clauses in duopoly markets a differentiated products price setting model is considered in which firms have the option of precommitting themselves to contracts which bind their own price to be some prespecified function of their competitor s price the analysis establishes conditions under which these contracts facilitate oligopoly coordination under which they result in price discrimination and under which they can actually be procompetitive

the value of genetic information in the life insurance market abstract this paper analyzes the effects of additional information in a life insurance market under adverse selection individuals have an incentive to acquire information about their risk type if their informational status cannot be observed by insurers in aggregate however the existence of a testing opportunity has an effect on the equilibrium premium we describe the conditions under which from an ex ante standpoint all individuals gain all lose or in which some gain and some lose from the existence of the test

the value of weather information in market equilibrium increased accuracy of weather forecasts does not necessarily increase commodity supply or farmer welfare this study presents a stylized model of competitive production with rational expectations and demonstrates that improved weather information harms farmers facing an inelastic demand contrary to the conclusions of previous studies the decline in farmer welfare does not require an expansion in expected supply better weather information may signal farmers to produce less on average under an inelastic demand a supply decrease occurs when increases in the physical productivity of applied inputs are dominated by adverse price consequences