pressure groups and redistribution abstract the simple pressure group model of political redistribution can predict more with less restrictive assumptions instead of ready made pressure groups composed of individuals who vote their pocketbooks we posit heterogeneous agents each of whom decides which group to join and how much effort to expend on political activity our model then examines social affinity conditions that foster pressure group formation political sympathies based on social affinity imply testable effects of growth rate and income distribution on progressive transfers effects that prove substantial in pooled time series cross section regressions for 13 oecd countries 1960 1981

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

an interest group model of direct income redistribution an interest group model of the determinants of policies which directly re distribute income to low income persons is developed and tested the model assum es that altruistic taxpayers nonaltruistic taxpayers and needy beneficiaries f orm separate interest groups from which politicians seek support benefit levels depend on variables such as taxpayer income and the price of benefits but unlike median voter models the model also implies a role for interest group strengt h and competition between political parties the author uses latent variable met hods and data on the aid to families with dependent children program to demonstr ate empirical support forthe model copyright 1986 by mit 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

ex ante valuation of atmospheric visibility in a world incomplete markets for environmental goods ex ante planned expenditures rather than ex post realized outcomes explain the values which individuals attach to these goods we use the distance function to develop restrictions from a model of ex ante consumer behaviour involving these goods a contigent valuation approach is then employed to estimate policy relavant components of the ex ante economic values that recreationists attach to differing subjective probabilities of alternative atmospheric visibility levels at a wilderness location and at an urban location in oregon marginal valuations of probability changes are similar at the two sites marginal rates of time preference for resolving uncertainities vary between 10 and 50 and are inversely related to education existence value averages 10 of total value and evidence is mixed that site specific value act as surrogates for general environmental preferences

a positive theory of environmental quality regulation this paper demonstrates that environmental quality regulation may enhance producer wealth while simultaneously reducing an externality problem by restricting access to common property regulation not only corrects a resource misallocation but it creates a scarcity rent as well in the recent history of environmental quality the common access problem has been addressed by federal and state agencies through a standards based approach rather than through the enforcement of tradable property rights as a consequence rents from the right to use these assets have accrued to producers the data are convincing that there is a strong interplay between producers consumers and the victims of pollution each party has some influence on the outcome and one sided analysis neglects many important aspects of regulation environmental quality regulation is complicated but many of the observed perplexities are consistent with a rent seeking self interest theory of government 46 references 1 figure 7 tables

elasticities of demand for gasoline in canada and the united states abstract fluctuations in the world price of oil the concern with greenhouse gas emissions and the efforts to revive the 1997 kyoto protocol have resulted in renewed interest in the estimation of elasticities of demand for gasoline in this paper a complete system of demand equations is estimated including an equation for the demand for gasoline canadian family expenditure famex and united states consumer expenditure cex survey data are used household level data permits estimation of elasticities for various household groups also differences in demand responsiveness to own price and income changes are estimated for different regions in canada and the united states demand is found to be own price and income inelastic on the whole as reported in earlier studies there is also variation in these elasticities across regions of canada and the united states however larger differences are observed with respect to household size and housing tenure than to region of residence

the tax revolt and electoral competition this paper explores the effect of electoral competition onstate and local expenditures in the us during the politicalenvironment following the tax revolt of the late 1970s itutilizes a theoretical model in which both electoralcompetition and tax and expenditure limits impact spending empirical results indicate the tax revolt s primary impact wastransmitted through political candidate competition notthrough the adoption of tax or expenditure limitations as iscommonly believed however tax and expenditure limits doaffect public education expenditures

application of games with incomplete information for pricing electricity in deregulated power pools the authors present a game theory approach to the problem of pricing electricity in deregulated marketplaces they assume that an independent operator receives bids by pool participants and defines transactions among participants by looking for the minimum price that satisfies the demand in the pool the competition among pool participants is modeled as a noncooperative game with incomplete information they assume that each pool participant knows its own operation costs but does not know his opponents operation costs the game with incomplete information is transformed into a game with complete but imperfect information and solved using the nash equilibrium idea the approach presented in this paper is geared towards providing support for pricing electricity in deregulated pools

revenue adequate bidding strategies in competitive electricity markets energy trading in a competitive electricity market can be modeled as a two level optimization at the top level a centralized economic dispatch ced uses a priority list method to solve the fundamental problem of reliable market clearing with price discovery the lower level consists of a set of decentralized bidding db subproblems the db model uses a self unit scheduling simulator based on parametric dynamic programming to produce hourly bid curves for the central dispatch coordinator unit operating constraints and costs such as the unit minimum up and minimum down times ramp rates and the unit start up no load and sunk capital costs are internalized in the bid curves through the simulator a special algorithm is presented to solve the revenue adequacy problem for marginal units both ced and db models are based on the revenue maximization in contrast with the cost minimization criteria used in the conventional unit commitment uc the proposed method has been tested in a study case and some interesting results have been demonstrated

the effect of the expansion of the voting franchise on the size of government this paper examines the claim that expansion of the voting franchise has been an important factor in the growth of government state government spending and state and local spending are explained using a panel of 46 states for 1950 88 elimination of poll taxes and literacy tests led to higher turnout particularly among the poor and a poorer pivotal voter as predicted we find that these changes a fall in the income of voters relative to state income and the ouster of republicans from state government led to a sharp rise in welfare spending but no change in other spending

stochastic joint optimization of wind generation and pumped storage units in an electricity market one of the main characteristics of wind power is the inherent variability and unpredictability of the generation source even in the short term to cope with this drawback hydro pumped storage units have been proposed in the literature as a good complement to wind generation due to their ability to manage positive and negative energy imbalances over time this paper investigates the combined optimization of a wind farm and a pumped storage facility from the point of view of a generation company in a market environment the optimization model is formulated as a two stage stochastic programming problem with two random parameters market prices and wind generation the optimal bids for the day ahead spot market are the ldquohere and nowrdquo decisions while the optimal operation of the facilities are the recourse variables a joint configuration is modeled and compared with an uncoordinated operation a realistic example case is presented where the developed models are tested with satisfactory results

impacts of network constraints on electricity market equilibrium nash equilibrium is usually used as the solution of generator s strategic bidding in electricity markets the available literature has shown by simulation that multiple market equilibria or no pure equilibrium may be induced after the inclusion of network constraints transmission constraints this paper presents a systematical analysis for the impacts of network constraints on the market equilibrium in oligopolistic electricity markets in our modeling the independent system operator iso dispatches generation and determines nodal prices via solving an optimal power flow opf and the individual generator optimizes its submitted supply function with nash supply function equilibrium sfe strategy after taking into account iso s decision making process on dispatched generations and nodal prices the conditions for the existence of equilibrium are given and it is shown that there may be multiple equilibria or no pure nash equilibrium the equilibrium if it exists will be at a point where generators pay no congestion charge

comprehensive bidding strategies with genetic programming finite state automata this research is an extension of the authors previous work in double auctions aimed at developing bidding strategies for electric utilities which trade electricity competitively the improvements detailed in this paper come from using data structures which combine genetic programming and finite state automata termed gp automata the strategies developed by the method described here are adaptive reacting to inputs whereas the previously developed strategies were only suitable in the particular scenario for which they had been designed the strategies encoded in the gp automata are tested in an auction simulator the simulator pits them against other distribution companies distcos and generation companies gencos buying and selling power via double auctions implemented in regional commodity exchanges the gp automata are evolved with a genetic algorithm so that they possess certain characteristics in addition to designing successful bidding strategies whose usage would result in higher profits the resulting strategies can also be designed to imitate certain types of trading behaviors the resulting strategies can be implemented directly in online trading or can be used as realistic competitors in an off line trading simulator

price taker offering strategy in electricity pay as bid markets the recent increase in the deployment of renewable energy sources may affect the offering strategy of conventional producers mainly in the balancing market the topics of optimal offering strategy and self scheduling of thermal units have been extensively addressed in the literature the feasible operating region of such units can be modeled using a mixed integer linear programming approach and the trading problem as a linear programming problem however the existing models mostly assume a uniform pricing scheme in all market stages while several european balancing markets e g in germany and italy are settled under a pay as bid pricing scheme the existing tools for solving the trading problem in pay as bid electricity markets rely on nonlinear optimization models which combined with the unit commitment constraints result in a mixed integer nonlinear programming problem in contrast we provide a linear formulation for that trading problem then we extend the proposed approach by formulating a two stage stochastic problem for optimal offering in a two settlement electricity market with a pay as bid pricing scheme at the balancing stage the resulting model is mixed integer and linear the proposed model is tested on a realistic case study against a sequential offering approach showing the capability of increasing profits in expectation

genetic algorithm evolution of utility bidding strategies for the competitive marketplace this paper describes an environment in which distribution companies discos and generation companies gencos buy and sell power via double auctions implemented in a regional commodity exchange the electric utilities profits depend on the implementation of a successful bidding strategy in this research a genetic algorithm evolves bidding strategies as gencos and discos trade power a framework in which bidding strategies may be tested and modified is presented this simulated electric commodity exchange can be used offline to predict whether bid strategies will be profitable and successful it can also be used to experimentally verify how bidding behavior affects the competitive electric marketplace

does ecological economics have a future contradiction and reinvention in the age of climate change abstract this paper addresses the role of neoclassical methodologies in ecological economics and the contradictions these methodologies pose to the field s critical founding principles we first consider robert costanza s treatment of nicholas stern s global deal and then survey climate change related articles published in this journal over the past five years this survey reveals how mainstream neoclassical methodologies dominate discourse and do so by marginalizing more critical political economy analyses this situation imperils the field s founding vision of a no growth steady state it also fails to address the related growth dynamics of capitalism without such a critical treatment the field s formal embrace of methodological pluralism actually entails an ideological empiricism that renders ecological economics theoretically incoherent this situation undermines the field s historical promise as an alternative economic paradigm ecological economics now faces a problematic future its survival in a form faithful to its founding vision will require an explicit choice to address its internal contradictions and reinvent itself in ways relevant to our contemporary context without such a choice ecological economics will likely succumb to an implicit acceptance of the hegemony of mainstream economic methodologies and their pro growth imperatives

welfare generosity the importance of administrative efficiency community values and genuine benevolence using 1988 1991 state level data a public expenditure model is estimated for benefits paid through the aid to families with dependent children afdc programme the paper investigates whether differences in programme efficiency community attitudes perceptions of the effects of afdc on recipient behaviour and tastes for redistribution explain the variation in public support for welfare across states

can carbon tax eat opec s rents abstract we consider the optimal emission tax for a stock pollutant when the pollutant flow is also regulated by a resource exporting cartel we consolidate clarify and generalize a set of previous results to obtain clear isolation of the pigouvian and trade policy components of the tax because of the trade policy component the tax can shift more rents from the cartel than the pollution causes damage related costs this leads to the possibility that the pollution problem accompanied by the coordination of taxation can bring about net benefits at the expense of the cartel

nonmonotonic demand for income redistribution benefits the case of afdc two different motives are often advanced to explain taxpayer nonrecipient support for income redistribution programs the first motive is the result of interdependent utilities between nonrecipients and the recipients of redistribution program benefits the source of this interdependence could be taxpayer altruism alternatively redistribution might be seen as one way to alleviate the potential for crime or social unrest recent theoretical analyses have suggested a second motiveincome redistribution programs act as protection against the possibility of unforseen loss in personal income 5 6 21 32 researchers using panel data find widespread random and temporary movements in individual income poverty and welfare program use that would seem to suggest a potentially significant insurance demand for redistribution programs 2 the results from one study for example indicate that while four to five percent of the total u s population could be classified as persistent recipients of welfare program benefits between 1969 and 1978 receiving program benefits in at least five of those years over one quarter of the u s population participated in welfare programs at least once over this same ten year period 9 74 in the past researchers estimating nonrecipient support for income transfer programs have considered only one of these two motives while ignoring the other 3 this paper extends the examination of the demand for income redistribution by integrating the public good and social insurance demand motives into one model the first part of the paper sets up the individual s decision model for income redistribution one consequence of interacting the public good and social insurance motives into one model is that support for higher benefit payments is expected to come from the tails of the income distribution low income individuals both recipients and nonrecipients benefit directly from the reduced risk of income randomness while high income

estimates from a consumer demand system implications for the incidence of environmental taxes abstract most studies suggest that environmental taxes are regressive making them less attractive policy options we consider the distributional effects of a gasoline tax increase using four incidence measures and under three scenarios for gas tax revenue use to incorporate behavioral responses we use consumer expenditure survey data to estimate a consumer demand system that includes gasoline other goods and leisure our estimates confirm that when revenues are not recycled a gasoline tax is regressive use of incidence measures that ignore demand responses however will substantially overstate this regressivity in contrast the differences between the equivalent variation and easier to implement consumer surplus measures are relatively small in addition our results suggest that using the additional gas tax revenue to fund labor tax cuts makes the policy substantially less regressive while using the revenue to fund lump sum transfers actually makes it progressive

the demand for welfare generosity this paper estimates economic models of the determinants of state benefit levels in the aid to families with dependent children afdc program using 1969 1992 data these models have been extensively researched however the existing literature has produced an unacceptably wide range of estimates using alternative econometric procedures this paper systematically examines both the specification assumptions underlying previous analyses as well as several additional specification issues it is therefore able to replicate and reconcile estimates from previous studies and to provide updated consensus estimates of the demand for welfare generosity it finds that changes in the average level of income within states have small but statistically significant positive effects on benefits with the confidence bounds on the elasticity extending from 0 11 to 0 82 changes in the effective price of redistribution are found to have at most weak negative effects with elasticities in the range of 0 14 to 0 02 these results are used to evaluate the effects of block grant provisions in the recently enacted welfare reform legislation

generator bidding in oligopolistic electricity markets using optimal control fundamentals and application in this paper optimal control is applied to study generator bidding in an oligopolistic electricity market the repeated bidding process in hourly based real time electricity markets is modeled as a dynamic feedback system an optimal control problem is then formulated to explore individual generator s long term multiperiod optimization behavior particularly in our formulation the periodic property of the system demand is considered several lemmas are included for concerning system stability based on the necessary conditions for optimality from the pontryagin maximum principle a sweeping method is proposed and an optimal state feedback control rule is then obtained via backward induction numerical results suggest that the generator who unilaterally applies optimal control for generation decisions will obtain more profits a sensitivity analysis is also performed identifying these market factors that affect the performance of optimal control

long run gasoline demand for passenger cars the role of income distribution it is commonly agreed that the level of income and prices are crucial determinants of the consumption of motor gasoline the respective long run price and income elasticities are regularly calculated using cross sectional models despite the acknowledgement of the role of income distribution it plays no role in intercountry cross sectional models this is due to a lack of appropriate data this paper shows that the omission of distributional characteristics provides misleading elasticities using available distributional measures this paper is referring to an income threshold which is crucial to the acquisition of an automobile it is shown that on the one hand in poor countries an unequal income distribution is needed to enable at least some people to buy automobiles on the other hand in wealthy countries an unequal income distribution would exclude some people from acquiring automobiles hence depending on the income level inequality has a diverging impact on the ability to buy durable goods the second part of this paper develops a pooled 90 country model to examine this approach empirically it could be shown that distribution variables are highly significant to explain the demand for automobiles and motor gasoline moreover the consideration of the distribution of income leads to a considerable decrease in income elasticity values this is mainly due to the positive correlation between income level and income equality within the sample

state and local impacts of a revenue neutral shift from a uniform property to a land value tax results of a simulation study this paper reports on the results of simulating a revenue neutral shift from a statewide uniform property tax to a land value tax the statewide economic impacts of such a tax reform are projected to be generally positive and also persistent in a state like new hampshire however substantial variations in those impacts among the state s counties could be expected to occur

weekly self scheduling forward contracting and pool involvement for an electricity producer an adaptive robust optimization approach abstract this paper addresses the optimization under uncertainty of the self scheduling forward contracting and pool involvement of an electricity producer operating a mixed power generation station which combines thermal hydro and wind sources and uses a two stage adaptive robust optimization approach in this problem the wind power production and the electricity pool price are considered to be uncertain and are described by uncertainty convex sets to solve this problem two variants of a constraint generation algorithm are proposed and their application and characteristics discussed both algorithms are used to solve two case studies based on two producers each operating equivalent generation units differing only in the thermal units characteristics their market strategies are investigated for three different scenarios corresponding to as many instances of electricity price forecasts the effect of the producers approach whether conservative or more risk prone is also investigated by solving each instance for multiple values of the so called budget parameter it was possible to conclude that this parameter influences markedly the producers strategy in terms of scheduling profit forward contracting and pool involvement these findings are presented and analyzed in detail and an attempted rationale is proposed to explain the less intuitive outcomes regarding the computational results these show that for some instances the two variants of the algorithms have a similar performance while for a particular subset of them one variant has a clear superiority

bidding in sequential electricity markets the nordic case abstract for electricity market participants trading in sequential markets with differences in price levels and risk exposure it is relevant to analyze the potential of coordinated bidding we consider a nordic power producer who engages in the day ahead spot market and the hour ahead balancing market in both markets clearing prices and dispatched volumes are unknown at the time of bidding however in the balancing market the market participant faces an additional risk of not being dispatched taking into account the sequential clearing of these markets and the gradual realization of market prices we formulate the bidding problem as a multi stage stochastic program we investigate whether higher risk exposure may cause hesitation to bid into the balancing market furthermore we quantify the gain from coordinated bidding and by deriving bounds on this gain assess the performance of alternative bidding strategies used in practice

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

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

the cost of reducing gasoline consumption high nominal gas prices new awareness of threats to national security and growing concern about global warming have reignited discussion of ways to reduce gasoline consumption in the united states debate centers on changing two policies already in place the federal gas tax and corporate average fuel economy cafe standards two influential recent reports find that increasing the gas tax would attain a given reduction in gas consumption at lower cost than would tightening cafe standards national research council 2002 congressional budget office 2003 the gas tax has this advantage because it encourages not just increases in fuel efficiency but also reductions in miles driven in contrast cafe standards actually encourage more driving because increases in fuel efficiency reduce the cost of gas per mile driven we also compare the costs of the gas tax and cafe standard but take into account interactions with preexisting tax distortions many papers examine the effects of these tax interactions in other contexts but to our knowledge none of them considers the cafe standard see e g lars bovenberg and ruud de mooij 1994 ian parry 1995 lawrence goulder 1995 bovenberg and goulder 1996 parry et al 1999 don fullerton and gilbert metcalf 2001 these interactions reduce the cost of the gas tax but increase the cost of cafe thus expanding the cost advantage enjoyed by the gas tax this difference does not arise because the gas tax raises revenue while the cafe standard does not rather this result is similar to that in west and williams 2004a which showed that since gasoline and leisure are relative complements raising the gas tax will increase labor supply generating additional efficiency gains in this paper we estimate a consumer demand system using data from the consumer expenditure survey and the california air resources board and find that miles driven and leisure are relative complements thus the gas tax encourages labor supply by raising the cost per mile driven producing an additional efficiency gain conversely because cafe reduces the cost per mile it discourages labor supply and yields an additional efficiency loss while the induced changes in labor supply are tiny relative to the labor market they are still substantial relative to the gas market and thus have a dramatic effect on the relative costs of the two policies our point estimates imply that they reduce the social marginal cost of the gas tax starting from the status quo gas tax rate and ignoring the benefits of reduced gas consumption by almost 30 percent while increasing the marginal cost of cafe by nearly 60 percent this result implies that the case for raising the gas tax rather than tightening the cafe standard is far stronger than previous studies suggest indeed it strongly suggests that any tightening at all of the cafe standard would lower welfare unless the benefits of reduced gas consumption have been seriously underestimated

a study of basic bidding strategy in clearing pricing auctions this paper models bidding behaviors of suppliers in electricity auction markets under clearing pricing rule and with some simplified bidding assumptions optimal bidding strategy of suppliers is derived by solving a set of differential equations that specify the necessary conditions for bidders to maximize their expected payoffs the derived result indicates that bidders have incentives to mark up their bids above their costs of production the amount of markup depends on the probability of winning below and on the margin that are computed from the cost distribution of all suppliers market demand and the number of suppliers participating in the auction

decentralized targeting of an antipoverty program abstract developing country governments often delegate authority over the targeting of antipoverty programs to community organizations while retaining control over how much goes to each community we offer a theoretical characterization of the information structure in such programs and the interconnected behavior of the various players our model motivates an econometric specification for explaining distributional outcomes results for bangladesh s food for education ffe program indicate that within village targeting improved with program size lower land inequality less remoteness fewer shocks and less private redistribution there is no sign that the center took account of village attributes conducive to reaching the poor

motor fuel taxation energy conservation and economic development a regional approach abstract combustion of motor fuels has a variety of environmental impacts on local regional and global scales taxing motor fuels more heavily would mitigate those environmental impacts however many governments are reluctant to increase motor fuel taxes because they fear that the tax incidence will be regressive and that economic development will be impeded using data for the new england region of the united states this paper argues that an oil importing region can conserve energy avoid regressive impacts and encourage economic development by taxing motor fuels more heavily and rebating the incremental revenues to owners of motor vehicles

risk constrained profit maximization in day ahead electricity market the deregulation of the electricity industry has caused for the generation company genco the need of tools for measuring and managing the risk beyond the classical problem of generating unit scheduling in this paper a probabilistic framework for the problem of managing risk faced by gencos trading in day ahead energy market is proposed in particular a stochastic forecast of electricity price and the technical features of hydrothermal units are considered the approach is based on an optimization procedure for maximizing expected profits in the presence of risk constraints conditional value at risk for the distribution of daily profit is used as risk measure

incidence of federal and state gasoline taxes the federal specific gasoline tax falls equally on consumers and wholesalers whereas state specific taxes fall almost entirely on consumers the consumer incidence of state taxes is greater in states that use relatively little gasoline

the war between the rent seekers in conclusion it seems some states have experienced spending growth to the point where economic and political constraints on that growth have led to a situation where rent seekers can gain only at the expense of other rent seekers as that fact becomes recognized peaceful cooperative political action between rent seeking groups that prevailed when such action resulted in a larger expenditure rent pool might give way to war between the rent seekers if state and local spending continues its relative growth we would expect the war between rent seekers to spread to other jurisdictions

auctions and bidding a primer maybe the contractor was right to think bid jobs are different but it is more likely that he suffered from too simple a view of what is involved in preparing a competitive bid our analysis will show that even an experienced estimator working in familiar terrain can lose money if he doesn t understand the subtleties of competitive bidding the phenomenon experienced by the painting contractor known as the winner s curse is just one of the surprising and puzzling conclusions that have been turned up by modern research into auctions another is the theoretical proposition supported also by some experimental evidence that for example a sealed bid treasury bill auction in which each buyer pays a price equal to the highest rejected bid would yield more revenue to the treasury than the current procedure in which the winning bidder pays the seemingly higher amount equal to his own bid there are also subtle results that demonstrate the equivalence of such apparently different institutions as the standard sealed bid auction in which the auctioneer seller sells the goods to the highest bidder for a price equal to his bid and the dutch auction in which the auctioneer seller begins by asking a high price and gradually lowers the price until

power portfolio optimization in deregulated electricity markets with risk management in a deregulated electric power system multiple markets of different time scales exist with various power supply instruments a load serving entity lse has multiple choices from these instruments to meet its load obligations in view of the large amount of power involved the complex market structure the risks in such volatile markets the stringent constraints to be satisfied and the long time horizon a power portfolio optimization problem is of critical importance for an lse to serve its load maximize its profit and manage its risks in this paper a midterm power portfolio optimization problem with risk management is presented key instruments are considered risk terms based on semi variances of spot market transactions are introduced and penalties on load obligation violations are added to the objective function to improve algorithm convergence and constraint satisfaction to overcome the inseparability of the resulting problem a surrogate optimization framework is developed enabling a decomposition and coordination approach numerical testing results show that our method effectively provides decisions for various instruments to maximize profit and manage risks and it is computationally efficient

the decline of welfare benefits in the u s the role of wage inequality welfare benefits in the u s have experienced a much studied secular decline since the mid 1970s we explore a new hypothesis for this decline related to the increase in wage inequality in the labor market and the decline of real wages at the bottom of the distribution we posit that voters prefer benefits which are tied to low skilled wages we test the hypothesis using a 1969 1992 panel of state level data an additional contribution of our analysis is the use of general social survey data on voter preferences for welfare which we combine with current population survey data to determine the voter in each state who has the median preferred welfare benefit level our analysis reveals considerable evidence in support of a role for declining real wages in the decline of welfare benefits

congestion influence on bidding strategies in an electricity market much of the research on bidding strategies in an electricity market has focused on idealized situations where participants have limited market power and the transmission system is not constrained yet congestion may act to effectively give a bidder market power and consequently the ability to influence the market clearing price in such a noncompetitive situation the bidding strategies of market participants will change in this paper the electrical power market is modeled as an oligopoly market and the cournot quantity model is applied to the bidding strategy problem the bidding process with congestion management is modeled as a three level optimization problem a statistical methodology is then proposed as a solution for large systems

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

comparing alternative policies to reduce traffic accidents abstract this paper derives and implements formulas for the welfare effects of uniform mileage taxes gasoline taxes per mile insurance premiums and mileage taxes differentiated across vehicle and driver groups for reducing the external costs of passenger vehicle accidents the average external accident cost is estimated at 2 2 6 6 cents per mile accidents costs differ substantially across driver groups but only moderately across vehicles groups annual welfare gains from a mileage tax equal to marginal external costs for each driver vehicle group are 9 4 billion in the benchmark case the uniform mileage tax and per mile insurance reform can achieve 76 and 65 of this welfare gain respectively while the gasoline tax can achieve only 28 of the welfare gain unlike other policies the gasoline tax induces costly improvements in average fleet fuel economy that have little effect on reducing external costs

games the states don t play welfare benefits and the theory of fiscal federalism fiscal federalism theory predicts that states will behave strategically in welfare programs because voter demand for welfare is sensitive to tax price while the tax price itself changes because of welfare induced migration this paper tests these propositions on afdc in the united states for a panel from 1982 88 using new models for the determination of the recipiency ratio the tax price and composite neighbors the data do not support any substantial tax price elasticity of demand for welfare estimates of migration effects on tax price are found to be sensitive to specification copyright 1995 by mit press

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