the solution to the tullock rent seeking game when r 2 mixed strategy equilibria and mean dissipation rates in tullock s rent seeking model the probability a player wins the game depends on expenditures raised to the power r we show that a symmetric mixed strategy nash equilibrium exists when r 2 and that overdissipation of rents does not arise in any nash equilibrium we derive a tight lower bound on the level of rent dissipation that arises in a symmetric equilibrium when the strategy space is discrete and show that full rent dissipation occurs when the strategy space is continuous our results are shown to be consistent with recent experimental evidence on the dissipation of rents

the new electricity market of singapore regulatory framework market power and competition abstract this study examines whether the new electricity market of singapore nems is functioning at a workable level of competition the generation market of the nems appears highly concentrated by a four firm concentration ratio or the herfindahl hirschman index however other measures of market power present that the nems is working at close to a competitive market first there seems to be a number of effective competitors in the market second supply margin assessment and residual supply index support that the market is competitive though there are some possibilities in which the largest generator or a few large generators jointly could still have market power third the lerner index of the nems shows that the generation market is fairly competitive and the lerner index adjusted with an industry level price elasticity of demand implies that there has not been much exercise of market power finally vesting contracts a contractual obligation of a specified quantity of electricity supply to the market have appeared to be a strong and effective tool to mitigate market power in the nems the vesting contracts are considered the force behind the lowering in the average uniform singapore electricity price and the lerner index in 2004

the demand elasticity impacts on the strategic bidding behavior of the electricity producers due to the oligopoly structure of the electricity markets and to the constraints imposed by the transmission network the producers may exert market power by strategically bidding higher than their marginal costs this brings market performance far from the perfect competition equilibrium with higher market clearing price and extra surpluses obtained by the producers demand elasticity can significantly affect the market performance contributing to mitigate the strategic bidding behavior of the producers compared to other commodity markets demand elasticity in the electricity markets is low but even a small increase can result in appreciable improvement of the market performance the network constraints of the power system play a specific role in determining the oligopoly equilibrium of the gaming behavior of the electricity producers the model of supply function equilibrium is first applied to a simple three bus test system for a conceptual analysis and then to a standard ieee 30 bus test system the effects of an increase of demand elasticity are assessed resorting to a set of proper quantitative indexes

the technical efficiency of large bank production abstract significant difficulties in commercial banking in the late 1980s raise questions about bank performance and efficiency with the use of data envelopment analysis dea we consider the relative technical efficiency of 201 large banks from 1984 to 1990 bank technical inefficiency averages just over 5 percent much lower than found in existing estimates larger and more profitable banks have higher levels of technical efficiency at the same time however larger banks are more likely to operate under decreasing returns to scale

forecasting residential electricity consumption in greece using monthly and quarterly data abstract this paper studies electricity consumption household use only in greece we explore the dynamic relationships among several potentially relevant time series variables and develop appropriate models for forecasting it is apparent that personal disposable income temperature and the price of electricity used by the households play an important role in the demand for electricity in this study we use both monthly and quarterly data and find that the performance of quarterly models may not be as good as that of the monthly ones for transfer function model identification we use the linear transfer function ltf method which is more efficient and easier to use than the traditional cross correlation ccf method

the demand for residential electricity new evidence on time varying elasticities this study employs a generalized functional form to examine demand for residential electiricity the appropriatenes of the conventional double log and linear forms are tested time varying elasicities are estimated major findings are summarized as follows 1 the double log and linear forms can be rejected at the 0 05 and 0 01 levels respectively 2 long run own price elasticities declined in absolute value consistently from 2 13 to 1 19 during the period 1950 87 3 long run income elasticities also decreased from 1 29 to 0 97 during the same period and 4 long run corss price elasticities with respect to the price of natural gas dropped form 0 40 to 0 29 these results may be heplful to decision makers in determining the change in total revenues owning to the change in prices pricing strategies the effectiveness of energy conservation programmes the effect of rising real income on the demand for residential electricity and future demand

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

multi factor performance measure model with an application to fortune 500 companies abstract the paper develops tools for reconciling diverse measures which characterize the financial performance of the fortune 500 companies the technology of data envelopment analysis dea is employed to determine a multi factor financial performance model which inherently recognizes tradeoffs among various financial measures this study offers an alternative perspective and characterization on the performance of the fortune 500 companies it is shown that the top ranked companies by revenue do not necessarily have top ranked performance viewed as being multidimensional only about 3 companies were operating on the best practice frontier substantial technical and scale inefficiencies are found decreasing returns to scale drs are uncovered among the relatively large revenue top ranked companies the study of congestion shows that a reduction in current levels of employees assets and equity may actually increase revenue and profit levels factor specific measures within the framework of multidimensional measure are developed to further study the performance of companies and industries the performance of best practice frontier companies is analyzed by constructing reference share measures which indicate the role each frontier company plays in evaluating non frontier companies finally the reliability of the best practice frontier is examined

caps on political lobbying the cost of political campaigns in the u s has risen substantially in recent years for example real spending on congressional election campaigns doubled between 1976 and 1992 steven d levitt 1995 there are many reasons why increased campaign spending might be socially harmful first increased spending means increased fund raising which may keep politicians from their legislative duties 1 second a lobbyist who makes a large campaign contribution may have undue influence on electoral outcomes on the shaping of legislation or on the outcome of regulatory proceedings 2 that is the socially preferred candidate or legislation may not prevail likewise a lobbyist involved in a regulatory matter or a competition for a government contract may benefit unduly from a legislator s intervention 3 third a perception that campaign contributions purchase influence may lead to increased tolerance of corruption in the private sector a desire to control campaign spending has spawned many initiatives to limit both campaign contributions and spending beginning with the passage of the federal election campaign act feca political action committees pacs can contribute at most 5 000 per election to a candidate while individuals can contribute at most 1 000 restrictions have also been put on in kind contributions making it more difficult to circumvent these limits 4 while direct restrictions on campaign spending have proven difficult to implement recent initiatives aim to impose voluntary spending limits and stricter limits on contributions 5 despite the existing legislation and the proposals to limit contributions little is known about the impact of contribution limits on aggregate expenditures while it is intuitively appealing that aggregate expenditures would drop we challenge that intuition here we study a lobbying game and show that a cap on individual lobbyists expenditures may have the perverse effect of increasing aggregate expenditures and loweri this abstract was borrowed from another version of this item

competition marginal cost tariffs and spot pricing in the chilean electric power sector abstract setting up competitiveness and privatizing the power sector has been an important goal of chilean energy policy since 1974 the new organization of the electric sector includes deconcentration of generating and distributing companies a new marginal cost and spot pricing system coordination of generating companies through an economic load dispatching centre eldc and a scheme for sharing transmission lines this paper describes why and how those tasks were carried out in chile

super efficiency and dea sensitivity analysis abstract this paper discusses and reviews the use of super efficiency approach in data envelopment analysis dea sensitivity analyses it is shown that super efficiency score can be decomposed into two data perturbation components of a particular test frontier decision making unit dmu and the remaining dmus as a result dea sensitivity analysis can be done in 1 a general situation where data for a test dmu and data for the remaining dmus are allowed to vary simultaneously and unequally and 2 the worst case scenario where the efficiency of the test dmu is deteriorating while the efficiencies of the other dmus are improving the sensitivity analysis approach developed in this paper can be applied to dmus on the entire frontier and to all basic dea models necessary and sufficient conditions for preserving a dmu s efficiency classification are developed when various data changes are applied to all dmus possible infeasibility of super efficiency dea models is only associated with extreme efficient dmus and indicates efficiency stability to data perturbations in all dmus

non radial cost luenberger productivity indicator abstract this study decomposes cost inefficiency into technical and allocative components in a more general way based on the directional russell measure drm of fukuyama and weber 2009 with the allocative component being completely clear of technical inefficiency based on this decomposition we develop a cost oriented productivity indicator the cost luenberger productivity indicator cl which completely embraces the concept of cost minimization and provides four sources of productivity change technical efficiency change the change in allocative efficiency the shift of technology and the effect of input price change to illustrate the above decompositions of cost inefficiency and productivity change and to investigate whether the establishment of a financial holding company fhc offers a bank greater operating efficiency and an improvement in productivity change this study employs data on taiwan s banking industry covering the period 2006 2012

a multi winner nested rent seeking contest this paper considers a symmetric imperfectly discriminating rent seeking contest in which there may be several winners we first demonstrate a serious flaw in previous work and then go on to suggest an alternative method for analyzing the contest in contrast to the previous work we show that the value of the rent is fully dissipated in equilibrium as the number of players becomes large

bid costs and endogenous bid caps we study contests where several privately informed agents bid for a price all bidders bear a cost of bidding that is an increasing function of their bids and moreover bids may be capped we show that regardless of the number of bidders if agents have linear or concave cost functions then setting a bid cap is not profitable for a designer who wishes to maximize the average bid on the other hand if agents have convex cost functions i e an increasing marginal cost then affectively capping the bids is profitable for a designer facing a sufficiently large number of bidders

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

some results on rent seeking contests with shortlisting we show that rent seeking contests with shortlistinghave comparative static properties which depend on thestage of the contest by generalising the argument inamegashie 1997 we show that well known comparativestatic results in single stage rent seeking contestsdo not necessarily carry over to contests withshortlisting the analysis suggeststhat policy prescriptions for reducing rent seekingexpenditures in contests with shortlisting cannot begiven without taking into account the stage of thecontest we also extend the model in amegashie 1997 to the case of unequal class sizes finally theshortlisting method in amegashie 1997 is comparedwith that in clark and riis 1996

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

two stage rent seeking contests with carryovers we examine a two stage contest in which players in twogroups compete noncooperatively to win a rent in thefirst stage each group selects a finalist the twofinalists compete for the rent in the second stage first stage efforts are carried over to the secondstage in the sense that they are partly effective inthe second stage as well we show the following inthe case of player specific carryovers therent dissipation rate increases in the carryover rate with the carryover rate equal to one the rent isfully dissipated in the case of group specificcarryovers however the rent dissipation rate isindependent of the carryover rate

appropriability and market structure in a stochastic invention model this research examines in the laboratory a class of game theoretic equilibrium models of private research and development r d we formulate a stochastic model of r d investment whose predictions can be examined by using laboratory experiments the noncooperative nash equilibrium of our operational model yields testable predictions about the effects of appropriability and market structure on r d the experimental results support the hypothesis that the degree of appropriability is inversely related to r d spending the results strongly support the hypothesis that an increase in group size yields greater aggregate r d the noncooperative nash equilibrium is shown to be a good predictor of central tendencies in the experiments

free entry and efficient rent seeking this paper concerns rent seeking and the extent to which rents are dissipated under various circumstances gordon tullock s 1967 insight that expenditures made to capture an artificially created transfer represent a social waste suggested that the cost to the economy of monopoly and regulation is greater than the simple harberger 1954 deadweight loss indeed under tullock s original formulation and in the extensions of his work by krueger 1974 and posner 1975 rents are exactly dissipated at the social level 1 is spent to capture 1 so that the total welfare loss from such activities is equal to the harberger triangle plus the rectangle of monopoly profits

expected revenue of all pay auctions and first price sealed bid auctions with budget constraints we show that all pay auctions dominate first price sealed bid auctions when bidders face budget constraints this ranking is explained by the fact that budget constraints bind less frequently in the all pay auctions which leads to more aggressive bidding in that format

estimation of short run and long run elasticities of energy demand from panel data using shrinkage estimators this article discusses the problem of obtaining short run and long run elasticities of energy demand for each of 49 states in the united states using data for 21 years estimation using the time series data by each state gave several wrong signs for the coefficients estimation using pooled data was not valid because the hypothesis of homogeneity of the coefficients was rejected shrinkage estimators gave more reasonable results the article presents in a unified framework the classical empirical bayes and bayes approaches for deriving these estimators

asymmetric two stage group rent seeking comparison of two contest structures two variations of a two stage rent seeking contest areconsidered in the first stage of the between groupmodel groups compete through the expenditure of resources bytheir members based on group expenditures one winning groupis probabilistically determined on the second stage membersof the winning group compete with one another for an exogenousprize in the semi finals model a player is chosen fromeach group and then these players compete for the prize groups differ in size or in their valuation of the prize subgame perfect equilibrium solutions are constructed forthese two contest structures

multiple goals and ownership structure effects on the performance of spanish savings banks abstract spanish savings banks sbs are financial institutions with a wide mission that includes different stakeholders goals profit maximization is only one among several goals and the widespread use of cost or profit efficiency as the only comparative performance measure may prove to be insufficient in this context to overcome this problem we build an aggregate performance index for organizations with multiple goals furthermore we show how the ownership structure of sbs influences their economic behavior in two basic ways 1 the performance level and 2 their goal priorities in particular we distinguish two types of ownership structures in our application namely organizations controlled by public administrations and those controlled by insiders i e managers and workers our results indicate that each type has different priorities and differ in their performance indexes more specifically the empirical analysis shows that insider controlled sbs favor goals related to profit maximization and the universal access to financial services and furthermore they perform better in contrast contributing to regional development becomes the most favored goal when public administrations have a majority in the bank

electricity demand in a developing country paraguay this study analyzes the residential and commercial demand for electricity in ten regions in paraguay for 1970 1977 models that are both linear and nonlinear in the parameters are estimated the nonlinear model takes advantage of prior information on the nature of the appliances being utilized and simultaneously deals with the demand discontinuities caused by appliance indivisibility three dynamic equations including a novel cumulative adjustment model all indicate rapid adjustment to desired appliance stock levels finally the multiproduct surplus loss obtained from an estimated demand equation is used to measure the welfare cost of power outages 15 references

symmetric two stage contests with budget constraints the impact of a budget constraint on individual expenditures is examined in two models of two stage contests with homogenous and risk neutral players competing to win a single indivisible commonly valued rent the set of players is partitioned into equally sized groups in the first model one contestant from each group survives to compete on the second stage against the other survivors in the second model one group survives the first stage and its members compete against each other on the second stage we derive and discuss the symmetric subgame perfect equilibrium solution for each model

information alliances in contests with budget limits we study the role of information exchange that may occur in alliances in a contest without noise contestants learn their own limits of what they can spend in a contest they may also form alliances and learn the limits of all players who are within the same alliance then they decide independently about their own contest efforts alliance formation for the purpose of information exchange is beneficial for members of the same alliance and neutral for all other players also a merger between alliances is beneficial for their members further we identify and discuss the set of stable alliance combinations

modeling market power in korea s emerging power market abstract the korean power market is being formed from the unbundled generation transmission and distribution assets of korea electric power corporation the kepco generation has been allocated to six independent gencos with a combined generating capacity of 46 629 mw in 2002 this gave an 11 margin over the peak load that year 41 921 mw one of the concerns for any power market is whether individual participants can increase profits and prices by withholding generation from the market to address this concern a cournot based model of korean power system was created and applied to a set of loads representing the load duration curve for korea s system loads in 2002 our simulation results show a strong possibility for exercise of market power to increase market price in korean market under tight market conditions even 1 gw of withholding can cause a large increase in market price if loads unexpectedly grow faster than the 5 recent experience the gencos will have the collective ability and incentive to spike prices further vesting contracts can reduce the incentive to act strategically requiring that the gencos offer 50 of their capacity in long term forward contracts greatly reduces the payoff to act strategically and requiring vesting for 75 of their capacity results in prices that are essentially the same as the competitive equilibrium depending on the price for the vesting contracts this policy can reduce the incentives to add new generation by gencos or the competitive fringe another approach to reducing the effects of market power is establishing demand response programs simulated here by increasing the elasticity of overall demand these programs can reduce the incentives to withhold capacity but to a lesser degree than vesting contracts the genco with the greatest ability to influence prices through withholding is the largest knhp however acting on its own without the support of the other gencos its ability to raise prices is limited this applies even more for the other gencos alone their ability to run up prices by withholding is limited only when they reinforce each other s withholding by further withholding do we see the extreme prices of the cournot equilibrium in the long run the high prices from the cournot equilibrium create a strong incentive for entry of new generating capacity while the gencos that do the most withholding in the cournot solution do not gain by adding new generation several of the gencos that do relatively less withholding would gain net revenues from adding capacity that is likely to exceed the cost of new capacity for participants on the competitive fringe the incentives to add new generating capacity are much stronger they do not have a stake in maintaining the high cournot solution prices and benefit from increased withholding by the incumbent gencos the projected net revenues from new baseload and peaking capacity greatly exceed the thresholds needed to recover investment costs with freedom for new entrants to add capacity the cournot equilibrium prices cannot be sustained

do bank mergers have hidden or foregone value realized and unrealized operating synergies in one bank merger abstract recent mergers in the banking industry have often generated disappointing shareholder returns delays in implementing potential operating savings and realizing benefits of scale economies may be one reason these mergers have disappointing returns using data envelopment analysis dea we analyze a 200 branch network formed in a merger of four banks the operating efficiency of each branch is benchmarked against best practice branches in the combined merged bank as well as best practice branches within each pre merger bank this analysis identified opportunities to reduce branch operating costs by 22 percent for the entire merged bank in contrast the cost savings opportunity is under seven percent when analyzed within each pre merger bank these findings suggest benchmarking across the entire merged bank to identify the best practices bank wide can generate added savings however in this bank merger these merger benefits were not realized until four years after the merger interviews with key players in the merged bank indicate that the bank deferred realizing these benefits because of political pressures personnel integration issues system integration issues and financial components of the merger such as restructuring reserves and the purchase price these causes suggest areas where shareholders can and should demand more rapid improvement in performance of bank mergers and areas for future corporate merger research

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

the real time price elasticity of electricity the real time price elasticity of electricity contains important information on the demand response of consumers to the volatility of peak prices despite the importance empirical estimates of the real time elasticity are hardly available this paper provides a quantification of the real time relationship between total peak demand and spot market prices we find a low value for the real time price elasticity which may partly be explained from the fact that not all users observe the spot market price if we correct for this phenomenon we find the elasticity to be fairly low for consumers currently active in the spot market if this conclusion applies to all users this would imply a limited scope for government intervention in supply security issues

experimental comparison of multi stage and one stage contests this article experimentally studies a two stage elimination contest and compares its performance with a one stage contest contrary to the theory the two stage contest generates higher revenue than the equivalent one stage contest there is significant over dissipation in both stages of the two stage contest and experience diminishes over dissipation in the first stage but not in the second stage our experiment provides evidence that winning is a component in a subject s utility a simple behavioral model that accounts for a non monetary utility of winning can explain significant over dissipation in both contests it can also explain why the two stage contest generates higher revenue than the equivalent one stage contest

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

the design of rent seeking competitions committees preliminary and final contests the paper examines the common practice in multi contest rent seeking competitions where finalists are selected based on rent seekers efforts in a preliminary contest we find that for any single contest design rent seeking expenditures could be reduced by introducing a preliminary contest if the marginal returns to rent seeking effort in the preliminary contest is sufficiently low in addition to other reasons the paper argues that this may explain why such multi contest designs are common we argue that rent seeking expenditure in the preliminary stage represents the cost of reducing the number of contestants we also find that the practice of setting a higher quality standard in the final contest than the quality standard in the preliminary contest reduces rent seeking waste we derive an expression for the optimal number of finalists under certain conditions we find that the optimal number of finalists is directly proportional or equal to the square root of the number of potential contestants finally we show that whether rent seeking expenditures rise or fall when the rent is awarded by a committee instead of a single administrator depends on the sensitivity of the committee relative to that of the single administrator

orchestrating rent seeking contests contests have different sometimes quite complex organisational structures in particular while most of the existing literature focusses on simultaneous contests multistage contests are also quite frequently encountered this paper seeks to provide a rationale for the latter by endogenising the choice of a contest structure which is made by an organiser of a contest interested in maximising the efforts expended by the contenders

rent dissipation when rent seekers are budget constrained in the original tullock 1975 1980 game an individual bidder s probability of winning with a bid b is proportional to br where the exponent reflects economies of scale in rent seeking different interpretations can be given to these probabilities first one may view r as a reflection of the political culture alternatively one may view r as a choice variable for a politician intuition suggests that a society with a high tolerance for the selling of political favors and politicians who are receptive to rent seeking would both induce greater rent seeking expenditures than other societies all else equal this paper shows that a lower value of r can actually lead to more rent dissipation than a higher value this paper also reinforces two points concerning rent seeking first the analysis confirms the robustness of under dissipation of rents even in the face of entry second it points out the importance of distinguishing between rent seeking expenditures and rent dissipation when bidders must borrow for example total expenditure may understate rent dissipation

residential demand for electricity the case of greece this paper examines the determinants of residential electricity consumption in greece over the period 1961 86 the paper presents first a brief description of the evolution of residential electricity consumption then it proceeds in the estimation of elasticities of residential demand for electricity using a single equation model with the ridge regression method the paper concludes that i the residential demand for electricity is price inelastic and income elastic ii there is high substitutability between electricity and lpg iii during the examined period the number of consumers played a very important role in the expansion of electricity consumption in greece and iv there is no regional variation in residential electricity demand

favoring the winner or loser in repeated contests should a firm favor a weaker or stronger employee in a contest despite a widespread emphasis on rewarding the best employees managers continue to tolerate and even favor poor performers contest theory reveals that evenly matched contests are the most intense which implies that a contest designer can maximize each player s effort by artificially boosting the underdog s chances we apply this type of handicapping to a two period repeated contest between employees in which the only information available about their abilities is their performance in the first period in this setting employees are strategic and forward looking such that they fully anticipate the potential impact of the first period contest result on the second period contest and thus adjust their behaviors accordingly the manager also incorporates these strategic behaviors of employees when determining an optimal handicapping policy if employees abilities are sufficiently different favoring the first period loser in the second period increases the total effort over both periods however if abilities are sufficiently similar we find the opposite result occurs total effort increases the most in response to a handicapping strategy of favoring the first period winner

an integrated performance evaluation of financial holding companies in taiwan abstract there has been a worldwide trend for financial institutions to become larger in scale and more diversified in scope with taiwan being no exception fourteen financial holding companies fhcs have each begun to function as a management umbrella in taiwan by investing in different types of financial services such as banking insurance and securities this paper focuses on this local financing issue from an integrated methodological perspective by model innovations proposed in several earlier studies for example the efficiency of profitability and marketability are combined to evaluate the fhcs performance to conduct a valid and reliable evaluation process while applying the fhc s case in taiwan we integrate the slacks based measure sbm and slacks based measure of super efficiency super sbm models in order to directly handle the slacks and identify the best performers a new scheme that deals with the negative output data in the sbm super sbm is also introduced inter temporal efficiency change which is decomposed into catch up and frontier shift effects is analyzed by means of the sbm based malmquist index a decision making matrix is also presented to help the fhcs managerial authorities position themselves in the industry the above techniques show with a high degree of consistency that large sized fhcs perform better than small sized ones

measures of technical efficiency abstract fare and lovell j econom theory 19 1978 150 162 suggest four properties that a measure of technical efficiency should satisfy the commonly employed debreu farrell measure fails three of them necessary and sufficient conditions for a measure to satisfy the four conditions are provided and recently proposed measures are analyzed in the light of this result also it is argued that the debreu farrell measure has several desirable properties when one takes account of 1 perhaps unknown market prices and the relationship between technical and economic efficiency and 2 its characterization as a measure of economic efficiency using the shadow prices implicit in the production technology

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

how organizational structure can reduce rent seeking in multi tiered organizations individuals can engage in unproductive rent seeking activities both within and between the divisions of the organization nevertheless a multi tiered organizational structure can induce efficiency gains by decreasing rent seeking we present a model of production and simultaneous internal and external rent seeking assuming a logistic contest success function in equilibrium there is generically either internal or external rent seeking but not both a multi tiered organization leads to less rent seeking and higher welfare even though the production technology gives no reason for any specific organizational structure our findings constitute a new efficiency rationale for multi tiered organizations

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

nontraditional partial adjustment models and their use in estimating the residential demand for electricity in costa rica the present study attempts to augment our very limited knowledge of electricity demand in the developing world by analyzing residential electricity consumption in a middle income level latin american country costa rica while a number of econometric investigations of the determinants of residential electricity demand have been carried out in developed countries using good data and a reasonably complete set of variables few comparable studies are available for the developing world in latin america the only two of which we are aware are berndt and samaniego 1984 and westley 1984a the former studies household electricity consumption in mexico an upper income level latin state the latter analyzes residential and commercial electricity demand in a lower income latin american country paraguay this paper is organized as follows the balance of this introduction summarizes the major issues and results then section ii discusses variables iii presents the basic econometric results and iv examines the issue of dynamic adjustment and discusses the need for more flexible partial adjustment pa models appendix a derives the linear appliance price index appendix b supplements the discussion of dynamic adjustment in section iv and appendix c derives the flexible pa models from cost minimization principles price and income elasticities

liquidity constraints and the formation of unbalanced contests abstract we analyze the effects of future liquidity constraints on contestants investment in a dynamic contest model contestants invest in two consecutive contests to win a prize in each period the loser of the first period contest can be liquidity constrained in the second period due to too little remaining wealth the winner of the first contest can reinvest the prize in the second contest we show that future liquidity constraints mainly affect the imbalance of the contest in the future but not today surprisingly larger contest prizes decrease contestants future investments and amplify the imbalance of future contests however the contest organizer can reduce this imbalance by increasing the share of the prize money in the second contest

efficient rents 2 free entry and efficient rent seeking in the competition for a monopoly right in which the number of bidders is fixed tullock and others have found the value of the resources spent in the aggregate to capture the transfer to be sometimes less than and sometimes greater than the value of the monopoly we think this approach to be incomplete since it leaves unanswered the question of what determines the number of individuals who will vie for the right to be the monopolist it is unsatisfactory to imagine for example that the franchisor sets the number of contestants one could then foresee that rent seeking would arise to influence the permissible number of bidders and this merely moves the rent seeking dissipation question one step back