min max fairness criteria for transmission fixed cost allocation conventionally transmission fixed cost allocation is carried out on postage stamp basis amongst various other ways of solving the problem the cost allocation under the usage based domain has also been suggested namely based on proportionate tracing and recently by optimization based real power tracing changing the cost allocation regime from postage stamp basis to usage based methods though technically sound can pose fairness issue the fairness criteria in its simplest form would allocate cost in equitable manner on per unit basis while meeting the constraints the optimization based tracing provides room for defining an objective leading to tracing compliant postage stamp method that strikes a balance in allocation between conventional postage stamp and proportionate tracing based methods in this paper we address this complex cost sharing problem by suggesting a min max fairness algorithm using optimization based real power tracing the min max algorithm achieves fairness by equalizing allocations within constrained space and reaching an equilibrium where further balancing cannot be achieved we show that computing min max fair solution simply corresponds to solving a sequence of sparse lp problems for real power tracing the algorithm satisfies the property of aggregate invariancy results on actual data of central transmission utility of western regional grid of india as well as ieee 30 bus system validate the claims the results are compared with the tracing compliant postage stamp method

an integrated framework for cost allocation in a multi owned transmission system this paper describes a methodology for allocating transmission costs among users of a centralized transmission service in the proposed approach the share of each participant is proportional to its impact on power system transmission investment requirements this allocation rule provides incentives for all participants to remain in the pool and ensures revenue reconciliation it is shown that under some simplifying assumptions the proposed scheme reduces to a modified mw mile rule thus providing some insight on that method s economic basis other issues such as credits for counterflows and distortions due to economies of scale are also addressed the methodology is illustrated in case studies with the brazilian power system

airport congestion when carriers have market power this paper analyzes airport congestion when carriers are nonatomistic showing how the results of the road pricing literature are modified when the economic agents causing congestion have market power the analysis shows that when an airport is dominated by a monopolist congestion is fully internalized yielding no role for congestion pricing under monopoly conditions under a cournot oligopoly however carriers are shown to internalize only the congestion they impose on themselves a toll that captures the uninternalized portion of congestion may then improve the allocation of traffic the analysis is supported by some rudimentary empirical evidence

the welfare effects of third degree price discrimination with nonlinear demand functions the welfare effects of third degree price discrimination are analyzed when demand in one market is an additively shifted version of demand in the other market and both markets are served with uniform pricing social welfare is lower with discrimination if the slope of demand is log concave or the convexity of demand is nondecreasing in the price the demand functions commonly used in models of imperfect competition satisfy at least one of these sufficient conditions

an analysis of dynamic price discrimination in airlines prices for the same flight change substantially depending on the time of purchase this article uses a unique data set with round the clock posted fares to document significant within day price variation labeling time variation as discriminatory is difficult because the cost of an unsold airline seat changes with inventory days before departure and aggregate demand expectations after controlling for these factors and aggregating hourly fares to have a framework with two consumer types we are able to identify a component that is largely consistent with dynamic price discrimination we find higher prices during office hours when business travelers are likely to buy and lower prices in the evening when leisure travelers are more likely to purchase as the proportion of business travelers increases closer to departure both price dispersion and price discrimination become larger we provide an alternative explanation for the observed within day price differentials which is related to edgeworth price cycles

a more fair power flow based transmission cost allocation scheme considering maximum line loading for n 1 security this paper proposes an efficient approach to transmission fixed cost allocation in a pool based electricity market that takes into consideration n 1 secure annual system operation the optimal capacity of a transmission facility is defined as the maximum power flow the facility may face under a contingency situation for a certain system snapshot in this pricing approach for each time interval the largest optimal capacity of a transmission facility is calculated for all n 1 conditions considering a security constrained optimal power flow charges for each facility are based on the facility usage of the largest optimal capacity for all time intervals during one or more years network usage is determined by generalized distribution factors and three variations of the mw mile method for pricing counter flows are investigated for the proposed cost allocation method the three proposed pricing methods are applied to the ieee 24 bus reliability test system and compared with other pricing methods

price discrimination in the airline market the effect of market concentration we test the hypothesis that price discrimination increases with competition in the airline market using a large cross section of tickets offered by several carriers on various routes we approximate price discrimination with marginal implicit prices of ticket restrictions that carriers typically use to price discriminate saturday night stayover re quirements and advanced purchase discounts we find that the restrictions are associated with lower airfares but that the discounts are smaller on routes with higher market concentration the results suggest that price dispersion attributed to ticket restrictions increases as markets becomemore competitive

cost benefit reflective distribution charging methodology this paper describes the principle and implementation of a new mw mvar miles charging methodology which was developed to reflect three key cost drivers in distribution network development the distance used to support nodal real and reactive power injection withdrawal the degree of support offered by the network assets and the operating condition of the supporting assets in terms of their power factors the inclusion of the latter driver allows the developed charging methodology to reward network users who are contributing to better power factors and better network utilization while penalizing customers who worsen power factors and network utilization as a consequence the charging model is able to provide forward looking incentives for network customers to behave in a manner to better the network condition which will in turn help to reduce the cost of future network development in addition the separation of real and reactive power pricing would give network users clear indications of the cost of their reactive power draw from the network which in turn could help them to evaluate the economics in investing in reactive power compensation devices the proposed charging methodology is demonstrated on a practical eight busbar distribution system with a mixed demand and embedded generation eg this paper results from work undertaken in a project on distribution charging methodologies for western power distribution the views in this paper expressed are not those of western power distribution

price discrimination and quality improvement this paper models quality improvements when multiple quality levels can sell owing to differences in consumers valuations of quality improvements firms can collude to price discriminate so that consumers with high valuations pay a price premium while others receive a quality level below the highest available imposing minimum quality standards or price ceilings can ensure that only the highest quality level of each product is sold such intervention reduces the quality adjusted price paid by consumers but also reduces the incentives for firms to innovate when enough consumers have high valuations such intervention must be welfare reducing owing to reduced innovation jel classification o31 l16 discrimination par les prix et amelioration de la qualite ce memoire presente un modele d amelioration de la qualite quand on peut vendre des produits a divers niveaux de qualitea cause des differences dans les evaluations d amelioration de qualite par les consommateurs les entreprises peuvent entrer en collusion pour faire de la discrimination par les prix de maniere a ce que les consommateurs qui apprecient davantage la qualite paient une prime pendant que les autres consommateurs recoivent une qualite au dessous de ce qui est la meilleure qualite disponible si on impose des normes de qualite minimale ou des plafonds aux prix on peut s assurer que seuls les produits de la plus haute qualite seront vendus de telles interventions reduisent le niveau de prix ajuste pour la qualite paye par les consommateurs mais reduisent aussi les incitations des entreprises a innover quand un nombre suffisant de consommateurs apprecient beaucoup la qualite de telles interventions peuvent reduire le niveau de bien etre a cause des innovations moins importantes

ex ante transmission service pricing based on load flow patterns in this paper a new pattern based transmission service pricing technique is reported it is based on power flow tracing techniques that determine the power contributions of participants in line power flows throughout the whole network since producers supply a consumer through the transmission paths considering kirchoff s laws it is obvious that the actual paths are not strongly correlated with the contractual paths this means that instead of financial paths only the actual power flow paths should be considered when calculating the transmission service price power flow data from previous years can be utilized for this purpose several power systems and different operating states that realistically represent actual system operating conditions were statistically analyzed the analysis showed a constant pattern of power flow shares in lines to consumers which can be utilized in ex ante transmission pricing for a network since the new approach reflects the characteristics of transaction and nontransaction based methods it combines their benefits too

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

a global code of business ethics the international economy is changing at a rapid rate the alteration and reduction of both geographical and political borders coupled with the growing interdependence of socially politically economically and legally diverse countries have caused multinational corporate entities to revise various policies these revisions include revisions in marketing strategies strategic alliances product and service strategies and perhaps most importantly as it affects all strategies a mnc s approach to ethical systems the truly global company must come to grips with the legal and moral atmosphere in which it operates the concept of moral rights those transcending legal or political rights drives us to review four international codes of conduct and to attempt to develop one international uniform code that might be applicable to any business in any country or culture

price discrimination in free entry markets using a spatial model of monopolistic competition we investigate price discrimination in free entry zero profit markets we show that when brands are heterogeneous competition does not prevent discrimination the power to earn economic profits is not necessary for a firm to maintain discriminatory prices our model treats formally the fact that consumers difer not only in the utility they derive from a good but also in how strongly they prefer one brand over all others in markets where firms are very competitive sorting consumers on the strength on brand preference produces larger price differentials between groups than sorting on the basis of consumers reservation prices for the good when firms sort customers on the basis of strength of brand preference however we find that the output and welfare effects are generally less favorable than when sorting is more closely related to consumers reservation prices

unbundling of transmission and ancillary services ii cost based pricing framework for pt i see ibid vol 12 no 2 1997 this paper presents a systematic framework for pricing transmission and ancillary services in competitive power markets this framework is based on the recovery of fixed and operating costs and it meets the traditional revenue requirements it is practical feasible easy to implement and to regulate it can be implemented with minimum transition cost this network flow dependent and nondiscriminatory framework is based on the decomposition approach presented in part i of this paper this decomposition forms an essential part of the proposed framework for usage based recovery of the fixed and operating costs the transmission system related fixed cost component is recovered from all transactions based on percentage utilization of the transmission system equipment the charge is based on the actual network power flows the ancillary service charge for a given transaction can be computed as the sum of the costs incurred at secondary generation for compensating the imbalance caused by that specific transaction the path providing function of the transmission grid is viewed as a true monopolistic service its pricing is cost based and charge for its use is usage based the generation based ancillary service supply can be made competitive its pricing is market based and charge for it is usage based a global overview of the proposed pricing strategy is analyzed in the context of other alternatives especially cost based methods a numerical example on a five bus system is given to illustrate the use of this pricing strategy

transmission network cost allocation based on equivalent bilateral exchanges this paper presents a novel methodology for allocating the cost of a transmission network to its users based on the principle of equivalent bilateral exchanges which states that after all physical laws governing the flow of power have been met each demand is assigned a fraction of each generation and each generator is assigned a fraction of each demand in a uniform manner transmission cost allocation based on this principle presents several advantages namely independence from the choice of the slack bus recognition of counter flows and transmission use charges that are stable and always positive

using yield management to shift demand when the peak time is unknown traditional peak load and stochastic peak load models assume firms have prior information about when peak demand occurs however price dispersion such as is typically used by firms practicing yield management can achieve some of the same efficient demand shifting even when the peak time is unknown equilibrium price dispersion arises because of stochastic demand and price rigidities but a previously unexplored benefit of price dispersion is its ability to reduce equilibrium capacity costs through demand shifting the model also suggests how yield management now more commonly called revenue management might actually benefit business travellers contrary to the popular prejudice

third degree price discrimination with interdependent demands this paper analyzes the price output and welfare effects of third degree price discrimination for a monopolist who sells in two interdependent markets the case where the two goods sold by the monopolist are complements is analyzed as well as the more typical case where the two goods are substitutes the economic effects of price discrimination are shown to depend on the type and strength of demand interdependence the curvature of the demands and the slope of marginal cost the circumstances under which price discrimination causes both market prices to either rise or fall are also analyzed

third degree price discrimination under economies of scale there has long been a controversy in economics about whether or not a firm with monopoly power should be allowed to exploit its monopoly power by engaging in third degree price discrimination the effect of third degree price discrimination on welfare is two fold 1 output under price discrimination is misallocated because different groups are charged different prices but 2 if total output is different under price discrimination than under uniform pricing this will also affect welfare 2 schmalensee 8 varian 11 12 and schwartz 9 have shown that price discrimination must decrease welfare if output under price discrimination is the same or less than output under uniform pricing this fundamental result is quite robust and holds regardless of the number of sub markets or the behavior of marginal cost rising constant or falling it also holds even if the sub market demands are interdependent a necessary but not sufficient condition for price discrimination to be beneficial is that it increase total output perhaps the most common situation in which price discrimination will be beneficial is the case where only one sub market is served under uniform pricing but two or more sub markets are served under price discrimination in this case hausman and mackie mason 3 have pointed out that price discrimination will result in a pareto welfare improvement if marginal cost is constant or falling even when price discrimination does not open up new markets hausman and mackie mason 3 and nahata ostaszewski and sahoo 5 have shown that price discrimination can result in a pareto improvement by lowering prices in all sub markets hausman and mackie mason 3 257 argue that price discrimination is most likely to be beneficial when economies of scale are present 3

the pearl model gaining competitive advantage through sustainable development this article formulates institutional virtues according to sustainable development sd criteria to come up with a paradigmatic set of corporate principles it aims to answer how a corporation might obtain competitive advantage by combining going ethical with going green on the one hand it brings out facts that indicate a forthcoming trend inclined to force relevant actors to comply with sd requirements on the other hand it suggests that sd may be implemented as a strategy to gain competitive advantage by the help of the pearl model through its five fundaments 1 perception friendliness 2 environment friendliness 3 action 4 relationship and 5 locality this article finally shows that although a number of companies e g bosch bp and ge implement sd as a tool of differentiation they lack a holistic model that is fully responsive to current dynamics the pearl may be implemented as a proactive positioning to gain competitive advantage because transformation of this model into corporate strategy does not only respond to stakeholder claims but also meets the changing characteristic of societal demands

congestion pricing and capacity of large hub airports a bottleneck model with stochastic queues this paper models and estimates congestion prices and capacity for large hub airports the model includes stochastic queues time varying traffic rates and endogenous intertemporal adjustment of traffic in response to queuing delay and fees relative costs of queuing and schedule delays are estimated using data from minneapolis st paul simulations calculate equilibrium traffic patterns queuing delays schedule delays congestion fees airport revenues airport capacity and efficiency gains the paper also investigates whether a dominant airline internalizes delays its aircraft impose it tests game theoretic specifications with atomistic nash dominant stackelberg dominant and collusive airline traffic

transmission access pricing to wheeling transactions a reliability based approach due to economy of scale several methodologies for the allocation of power transmission costs do not recover the fixed costs of transmission assets to avoid this problem in this paper a methodology is proposed which considers that each circuit has two functions to allow the power transmission between two points and to assure the system reliability thus the revenue of each circuit is obtained in two parts one part that considers the system use under normal state and the second part that consider the system use under contingency conditions application of the methodology is illustrated on a small but realistic test system

third degree price discrimination in the presence of congestion externality this paper analyzes third degree price discrimination of a monopoly airline in the presence of congestion externality when all markets are served the model features the business passenger and leisure passenger markets where business passengers exhibit a higher time valuation and a less price elastic demand than leisure passengers our main result is the identification of the time valuation effect of price discrimination which can work in the opposite direction as the well known output effect on welfare this time valuation effect clearly explains why discriminating prices can improve welfare even when this is associated with a reduction in aggregate output

price discrimination and patent policy patent and antitrust policy are often presumed to be in conflict as an important example there is ongoing controversy about whether price discrimination by a patent holder is an illegal or socially undesirable exploitation of monopoly power in this article we show that no conflict exists in many price discrimination cases even ignoring the dynamic effects on incentives for innovation third degree price discrimination by patent holders can raise static social welfare in fact pareto improvements may well occur welfare gains occur because price discrimination allows patent holders to open new markets and to achieve economies of scale or learning further even in cases where discrimination incurs static welfare losses it may be efficient relative to other mechanisms such as length of patent life for rewarding innovators with profits

monopoly price discrimination and demand curvature this paper presents a general analysis of the eects of monopolistic third degree price discrimination on welfare and output when all markets are served su cient conditions involving straightforward comparisons of the curvatures of the direct and inverse demand functions in the dierent mar kets are presented for discrimination to have negative or positive eects on

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

price discrimination and social welfare studies the effect of price discrimination on social welfare using methods from duality theory features of the reservation model presented quasi linear utility and consumers surplus upper and lower bounds on welfare change bounds on welfare change with optimal price discrimination from ebsco

a decentralized approach for optimal wholesale cross border trade planning using multi agent technology over the past decade the power industry has been undergoing deregulations to introduce competitions among market participants once centralized decision making must now adapt to the new market structure the optimal cross border electricity trade planning is an important issue in interconnected power systems under transmission open access in this paper a decentralized approach is suggested to solve the problem using multiagent technology in the new approach rational market participants make decisions based on their own benefits in the meantime the minimum production and transmission cost of the whole system can be reached without a central coordination except necessary information exchange through media like the internet a relevant lemma has been proven the approach is implemented via a multiagent system using java programming language computer tests on a five area test system show that the suggested new approach is effective and promising

short term transmission line maintenance scheduling in a deregulated system in this paper the authors present a decomposition approach based on duality theory for line maintenance scheduling with transmission and voltage constraints the given formulation consists of a master program and sub problems with two independent programming in the master problem the maintenance problem is solved and in the subproblems the transmission and voltage problems are solved independently since canceling a transaction or purchasing reactive power relates to the loss of revenue the trade off between maintenance cost and revenue loss will be optimized in the proposed method the test results on the modified ieee 118 bus system demonstrate that limits on transmission and voltage affect the line maintenance scheduling and increase the maintenance cost while introducing the loss of revenue as one of the objective functions the proposed method is flexible enough to accommodate various pricing objectives and methods

long run incremental cost pricing based on unused capacity this paper proposes a novel approach for providing long run incremental cost lric pricing in network charges the proposed approach makes use of the unused capacity of an exiting network to reflect the cost of advancing or deferring future investment consequent upon the addition of generation or load at each study node on a distribution network compared with existing approaches to lric pricing the proposed approach produces forward looking charges that reflect both the extent of the network needed to service the generation or load and the degree to which that network is utilized the efficacy of the proposed lric approach has been validated by a comparison with the established investment cost related pricing icrp method used for deriving transmission charges in great brain gb this paper draws on work undertaken in projects for western power distribution and ofgem office of gas and electricity markets u k however the views expressed in this paper are those of the authors

the equity and efficiency of runway pricing abstract this paper poses and answers the following question if an airport authority is assumed to choose landing fees that maximize a weighted sum of airline consumers surpluses subject to a revenue requirement what set of weights is implied by currently observed fees the model is loosely applied to san francisco international airport the main result is that commuter airlines are much more favored than others

third degree price discrimination consumption externalities and social welfare this paper analyses monopolistic third degree price discrimination in the presence of consumption externalities within two separate markets assuming linear inverse demands we investigate an associated change in social welfare the sum of the consumers surpluses and the producer s profit with the regime change from uniform pricing to price discrimination when both markets are open under either regime it is shown that social welfare can improve even if total output is unaffected by the regime change moreover it is possible that the sum of the consumers surpluses also increases

differential pricing when costs differ a welfare analysis this article analyzes the welfare effects of monopoly differential pricing in the important but largely neglected case where costs of service differ across consumer groups cost based differential pricing is shown to increase total welfare and consumer welfare relative to uniform pricing for broad classes of demand functions even when total output falls or the output allocation between consumers worsens we discuss why cost based differential pricing tends to be more beneficial for consumers than its demand based counterpart third degree price discrimination we also provide sufficient conditions for welfare improving differential pricing when costs and demands differ across consumer groups

nodal price control a mechanism for transmission network cost allocation this paper presents an approach for the allocation of transmission network costs by controlling the nodal electricity prices the proposed approach introduces generation and nodal injection penalties into the traditional economic dispatch so as to create nodal price differences that recover the required transmission revenue from the resulting congestion rent as a consequence the new electricity prices reflect not only the marginal costs of production subject to transmission constraints but also the capital costs of the network this is the approach commonly adopted with most commodities whose price includes the unit cost of the good itself as well as the transportation cost from the production centers to the final consumer

are treble damages neutral sequential equilibrium and private antitrust enforcement a sequential equilibrium model of private antitrust enforcement is presented consumers have incomplete information about cartel costs and cannot accurately estimate a priori the damage recovery from an antitrust action consumers are able to infer cartel costs from the equilibrium pricing strategy of firms the universal divinity criterion is used to characterize the sequential equilibrium it is shown that for a sufficiently large damage multiple antitrust enforcement effectively increases social welfare copyright 1990 by american economic association

the new chilean transmission charge scheme as compared with current allocation methods we describe the new method used in chile to allocate transmission charges among generating companies and customers as defined in law 19 940 of march 2004 also known as ley corta or short law we show that the new chilean transmission charge scheme is a hybrid based on marginal cost pricing identification of use through economic benefits and flow identification methods and last a postage stamp to redistribute almost all the charges that customers have to pay we also estimate the direct per kilowatthour charge that customers will pay and discuss its effect on location and expansion signals

long run marginal cost pricing based on network spare capacity this paper proposes a novel approach for providing long run marginal cost lrmc pricing in network charges the proposed approach makes use of the unused capacity of an exiting network to reflect the cost of advancing or deferring future investment consequent upon the perturbation of generation or load at each study node on a distribution or transmission network compared with existing approaches to lrmc pricing the proposed approach produces forward looking charges that reflect both the extent of the network needed to service the generation and or load and the degree to which that network is utilized

cost of wheeling methodologies the cost of wheeling and the methodology by which it is computed is a high priority problem throughout the power industry due to the growth in transmission facilities the cost differentials between utility companies and the dramatic growth in nonutility generation capacity this paper contains descriptions and summaries of computational procedures and data requirements of four embedded cost methodologies two long run incremental cost methods and the short run marginal cost method four methodologies are also presented for allocating the wheeling costs among a number of wheels when simultaneously present on a company s system as required for the standard long run incremental cost method

charging for network security based on long run incremental cost pricing pricing for the use of the networks is essential in the way that it should be able to reflect the costs benefits imposed on a network when connecting a new generator or demand and to provide forward looking message to influence the site and size of future network customers studies have been extensively carried out over the years to achieve this pricing goal few methodologies can directly link nodal generation demand increment to network long run marginal incremental costs even fewer consider network security in their pricing methodologies considering it is one of the most important cost drivers all networks are designed to be able to withstand credible contingencies but this comes at a significant cost to network development this paper proposes a new approach that can establish the direct link between nodal generation demand increment and changes in investment cost while ensuring network security the investment cost is reflected by the change in the spare capacity of a network asset from a nodal injection which is in turn translated into an investment horizon leading to the change in the present value of a future investment cost the security is reflected in the pricing through a full n 1 contingency analysis to define the maximum allowed power flow along each circuit from which the time horizon of future investment is determined this paper illustrates the implementation of the proposed pricing model for a system whose demand grows either at a uniform rate or at variable growth rates the benefits of introducing security into the long run pricing model are demonstrated on the ieee 14 busbar system and a practical 87 busbar distribution network

advance purchase discounts and monopoly allocation of capacity optimal pricing by a monopoly airline that faces capacity constraints during the peak demand period is studied the existence of capacity constraints means that in order to expand output the airline must divert demand from the peak period to the off peak period a particular advance purchase discount policy is shown to be the profit maximizing method of selling tickets if the advance purchase requirement were infeasible output and total surplus would both be lower jel l12 substantial discounts for air travel are generally available to travelers who are willing to purchase tickets a week or more in advance of the departure date this paper demonstrates why the imposition of an advance purchase requirement may be a profit maximizing strategy for a monopoly airline facing capacity constraints during times of peak demand 1 the practice of imposing an advance purchase requirement on discount tickets is also placed in a favorable light in terms of its impact on social

welfare increasing third degree price discrimination when demand functions in different markets are derived from distributions of reservation prices that differ only in their means conditions exist such that third degree price discrimination leads to greater total output and greater total welfare welfare is higher with discrimination than with a uniform price when demand functions are derived from logistic distributions with different means welfare and consumer surplus are higher with discrimination for demands derived from a distribution related to the pareto in general whether discrimination increases total output depends on demand being more convex in markets in which prices fall with discrimination than in those in which prices rise

pricing transmission services in the context of industry deregulation the changing structure of the electricity supply industry and the emergence of independent power producers and independent customers is bringing transmission pricing into a new focus the costs of operating maintaining and expanding the transmission system that is pricing transmission services needs to be addressed this has to be done on an economically rational and technically meaningful basis and this paper suggests an approach which distinguishes between operating and embedded costs and develops separate methods in respect of each of these components capacity use as well as reliability benefits derived by different users are taken into account in the disbursement of charges for investment recovery new insights into the marginal pricing approach to the recovery of operating costs are also briefly mentioned

equilibrium price dispersion under demand uncertainty the roles of costly capacity and market structure when capacity is costly and prices are set in advance firms facing uncertain demand will sell output at multiple prices and limit the quantity available at each price i show that the optimal price strategy of a monopolist and the unique pure strategy nash equilibria of oligopolists both exhibit intrafirm price dispersion moreover as the market becomes more competitive prices become more dispersed a pattern documented in the airline industry while generating similar predictions the model differs from the revenue management literature because it disregards market segmentation and fare restrictions that screen customers

framework for assessing the economic efficiencies of long run network pricing models this paper presents a framework for assessing the economic efficiency of different long run network pricing models the aim is to provide a quantifiable efficiency measure that will inform regulators network operators and network users when an alternative pricing model is contemplated the efficiency measure is derived from the long term network development costs that flow from a dynamic interaction between network pricing and planning that is the response of network users to differing charging models the consequential network investment and new financial incentives that follow reinforcement of the network to illustrate the approach the framework has been used to assess the relative efficiency of three broad class of distribution pricing models in a study undertaken for the great britain gb s regulator for gas and electricity markets in england wales and scotland ofgem the study contemplated three pricing models that are used in practice the efficiency assessment in the ofgem study was conducted on a pseudo distribution reference network on the assumption that the results from the reference network could be scaled up to the national level then the assessment suggests that by moving from the present drm model to the more economic lric approach gb distribution network operators could save in the region of pound200 m over the next 20 years in their network investment costs this paper draws heavily on the project undertaken for ofgem but any views expressed are solely those of the authors

modeling bilateral electricity markets a complex network approach in electricity markets a pool trading model with a power exchange pool is a typical market organization that attracts much more attention than a bilateral trading model to date quite a few papers have focused on bilateral trading models particularly those under network constraints this trend is due to the model s complexity in terms of the various trading patterns reflecting the self interested behavior of the market participants striving to find potentially profitable transactions in this paper we propose a new approach based on complex networks suitable for assessing different aspects of bilateral market this work strives to analyze the bilateral trading patterns in the electricity markets where physical network constraints need to be considered for the feasible and secure operation of the power systems the goal of the work is to find the stable network structures that can be used to anticipate possible bilateral transactions in the real market place and to provide a novel and applicable approach to studying the bilateral model in electricity markets the proposed approach has been tested on several test systems in which the transmission network structure of the market that accommodates the transactions is considered the proposed model is illustrated with examples using a four bus test system the ieee 30 bus and the ieee 118 bus test systems

price discrimination in cournot nash oligopoly abstract the standard cournot nash oligopoly model is extended to encompass price discrimination where firms charge more than one price for the same product based on willingness to pay in the linear symmetric case the average price is not dependent on the extent of price discrimination

the effects of third degree price discrimination in oligopoly retail firms and restaurants commonly offer senior citizen discounts i suspect this practice is not motivated by altruism rather the behavior can be better explained as profit maximizing price discrimination these firms are setting a low price in a market which probably has high elasticity of demand but why should the demand of senior citizens be more elastic than average one possibility is that elderly people have below average income and they would not eat out if restaurant prices were high perhaps a more plausible explanation is that retired people simply have more time on their hands to spend commuting across town to take advantage of discounts the purpose of these discounts may then be to lure senior citizens away from other restaurants rather than to get them out of the house the analysis of third degree price discrimination has a long history a c pigou 1920 joan robinson 1933 and two articles on the subject have recently appeared in this review richard schmalensee 1981 hal varian 1985 the industry structure in these analyses is monopoly but an explicit model of some form of competition is obviously needed to study discriminatory discounts meant to attract customers from rival firms and even discounts meant to get people out of the house may have an oligopoly analysis which is qualitatively different from their monopoly anlysis in this paper i present a simple duopoly model of a differentiated products industry i show that a firm s price elasticity of demand in a market can be expressed as the sum of two parts the industry demand elasticity and the cross price elasticity the first measures the tendency of consumers in a market to stay home when the price goes up the second the tendency to switch suppliers in the monopoly case in which the crossprice elasticity is zero and the collusive case in which the cross price elasticity is irrelevant discrimination between markets is due to differences in industry demand elasticity in the noncooperative oligopoly case equilibrium price differentials can be accounted for both by differences in cross price elasticity as well as differences in industry demand elasticity total industry output when the firms can discriminate between two markets is compared to what it would be if discrimination were impossible which regime has larger output depends on the sum of the adjustedconcavity condition and the elasticity ratio condition the first predominates when the rival products are poor substitutes and the firms have approximate monopoly power while the second predominates at the other extreme where the products are close substitutes and the firms have almost no market power the adjusted concavity condition compares the relative curvature of demands in the two markets and was originally discovered by robinson 1933 in her analysis of monopoly price discrimination the elasticity ratio condition compares the relative difference in industry demand elasticity between the two markets with the relative difference in cross price elasticity according to the elasticity ratio condition a discriminatory discount due to high industry elasticity of demand would be more likely to increase total output than one due to high cross price elasticity the effect of discrimination on profit is also discussed the distinction made here department of economics university of wisconsin madison madison wi 53706 this paper is a revision of part of my doctoral dissertation i am grateful to steve matthews ken judd and john panzar for guidance in this research i also thank seminar participants at wisconsin the justice department and the 1986 econometric society meetings in new orleans and the discussant martin perry the excellent comments of the referees improved the exposition of the paper

the economic dispatch with consideration of transmission service charge for a generation company summary form only given as follows this paper presents a novel economic dispatch strategy for a generation company which owns several units with different fuel costs efficiency and locations and has a bilateral contract with several large customers the proposed strategy not only considers the generation cost but also takes into account the wheeling charge for the use of the transmission system a modified megawatt mile method is proposed to calculate the wheeling cost in this paper finally the calculation result of economic dispatch for a generation company with two units and their loads in a real power system is demonstrated

transmission analysis by nash game method this paper describes an open access transmission method for maximizing profits in a power system the proposed method is based on the nash bargaining game for power flow analysis in which each transaction and its optimal price are determined to optimize the interests of individual parties transmission losses are considered by the proposed method and test cases and results are discussed to present the merits of the proposed method

network effects congestion externalities and air traffic delays or why not all delays are evil we examine two factors that explain air traffic congestion network benefits due to hubbing and congestion externalities while both factors impact congestion we find that the hubbing effect dominates empirically hub carriers incur most of the additional travel time from hubbing primarily because they cluster their flights in short time spans to provide passengers as many potential connections as possible with a minimum of waiting time non hub flights at the same hub airports operate with minimal additional travel time these results suggest that an optimal congestion tax might have a relatively small impact on flight patterns at hub airports jel l2 l5 l9 d6

third degree price discrimination and consumer surplus this paper considers the effects of monopoly third degree price discrimination on aggregate consumer surplus discrimination is likely to reduce surplus relative to that obtained with a uniform price but surplus can rise under reasonable conditions if the ratio of the pass through coefficient to the price elasticity at the uniform price is higher in the market with the higher price elasticity then surplus is larger with discrimination for a large set of demand functions the relatively high pass through coefficient implies a large price reduction in this market with logit demand functions surplus is higher with discrimination if pass through is above 0 5

third degree price discrimination in input markets output and welfare if price discrimination is realized the economy shifts from one equilibrium to another it clearly involves welfare effects the price discriminator clearly gains some consumers may also gain from the price cut but others may lose faced with higher prices etc traditionally the change in social welfare is known to be closely related to the change in total output in the case of third degree price discrimination it is well known that an increase in total output is a necessary condition for welfare improvement richard schmalensee 1981 proves this fact in a model in which the monopolist with constant marginal cost can perfectly separate markets further hal r varian 1985 extends this result to the case of interdependent markets permnitting increasing marginal cost of the monopolist and finally the assumption of nondecreasing marginal cost is eliminated by marius schwartz 1990 roughly speaking this proposition says that if there is a welfare gain from price discrimination there has to be some gain to offset the distortion involved on the other hand the vast majority of legal and other policy disputes over the price discrimination concern input markets not final good markets thus it seems important to investigate the situation in which a discriminating monopolist is not a final good supplier but an input supplier and the buyers of the input are downstream producers of a final good as is assumed in this paper if the downstream firms have different technologies their input demand functions will be different and thus the monopolist has an incentive to price discriminate in this scenario michael l katz 1987 and patrick degraba 1990 study the effect of inputmarket price discrimination and show that price discrimination always lowers welfare because it involves the distortion that a lower cost downstream firm is assigned a higher price unfortunately in their simple settings on the technology of downstream industry price discrimination can never change total output of the input or of the final good 1 thus we must say that welfare effect of input market price discrimination remains open to question if it has some effect on total output in particular we are curious as to whether we can obtain some close relationship between the changes in welfare and total output as we have obtained in the final good market settings with this motivation we will construct a model which involves change in total output of the final good in the next section the model and assumptions are provided in section ii after we extend the result of katz 1987 and degraba 1990 we find a relationship between the changes in welfare and total output strikingly it states that an increase in the total output of the final good is a sufficient condition for welfare deterioration this result contrasts with that obtained by schmalensee 1981 varian 1985 and schwartz 1990 from usual models of price discrimination in a final good market section iii concludes the analysis

another look at airport congestion pricing we study alternate approaches to implement congestion pricing at us airports conventional formulations toll all aircraft without determining whether a plane operated by a given airline delays other planes that it operates or planes operated by other airlines recent work points out optimal pricing calls for carriers to be charged only for the delay they impose on other airlines we find a small difference between the net benefits generated by the two congestion pricing policies because the bulk of airport delays are not internalized and because the efficiency loss from pricing internalized congestion is small jel l11 l93 r41

rewriting the bases of capitalism reflexive modernity and ecological sustainability as the foundations of a new normative framework the debate on sustainable globalized development rests on two clearly stated economic assumptions that development proceeds solely and inevitably through industrialization and the proliferation of capital intensive high technology towards the creation of service sector economies and that globalization based on a neoliberal capitalist free market ideology provides the only vehicle for such development sustainability according to the proponents of globalized development is merely a function of market forces which will generate the solutions for all problems including the environmental dilemmas that loom over the globe today the social focus of globalized development is clearly the individual and the much touted goal of development in the context of these debates is the emancipation of the individual from want this glorification of the individual so characteristic of the enlightenment has defined all aspects of modernity leading to approaches that are self focused and that give little thought to the needs of society or even the social context the increasing impoverishment of human life and the growing environmental degradation however provide a poignant counterpoint to this onrush of capital interests demanding a reassessment of sustainability separate from the logic of industrialization and globalized development this paper examines the unfolding of the logic of capitalism which underlies the structure of the rostowian model of development and the problems in the assumptions underlying today s globalized development process the evident impossibility of sustainability in the current growth based market system leads to the examination of alternatives including a reflexive understanding of the choices and the inclusion of opportunity costs related to the social environmental and economic aspects of decision making the integration of all factors of production into the logic of development provides a sustainable alternative to the current system