Price Dynamics in an Exchange Economy

The pure exchange model is the foundation of the neoclassical theory of value, yet equilibrium predictions and models of price adjustment for this model remained untested prior to the experiment reported in this paper. With the exchange economy replicated several times, prices and allocations converge sharply to the competitive equilibrium in continuous double auction (CDA) trading. Convergence is evaluated by comparing the extent of price adjustment within each market replication (or trading period) to the extent of adjustment across trading periods: most observed price adjustment occurs within trading periods, so price adjustment data are evaluated with the Hahn process model (Hahn and Negishi [1962]), which is a disequilibrium model of within-period trades. Estimation demonstrates that the model is consistent with observed price paths within each period of the exchange economy. The model is augmented with an additional assumption – based on observations from this experiment – that the initial trade price in period t+1 is randomly drawn from the interval between the minimum and maximum trade prices in period t. The estimated within-period adjustment rule, combined with this across-period adjustment rule, generates price paths similar to data from an experiment session.Competitive equilibrium, disequilibrium dynamics, continuous double auction, experimental economics, exchange economy, Hahn process, neoclassical theory of value, tatonnement, unit root tests

General methodology for exergy balance in ProSimPlus® process simulator

This paper presents a general methodology for exergy balance in chemical and thermal processes integrated in ProSimPlus® as a well-adopted process simulator for energy efficiency analysis. In this work, as well as using the general expressions for heat and work streams, all of exergy balance is presented within only one software in order to fully automate exergy analysis. In addition, after exergy balance, the essential elements such as source of irreversibility for exergy analysis are presented to help the user for modifications on either process or utility system. The applicability of the proposed methodology in ProSimPlus® is shown through a simple scheme of Natural Gas Liquids (NGL) recovery process and its steam utility system. The methodology does not only provide the user with necessary exergetic criteria to pinpoint the source of exergy losses, it also helps the user to find the way to reduce the exergy losses. These features of the proposed exergy calculator make it preferable for its implementation in ProSimPlus® to define the most realistic and profitable retrofit projects on the existing chemical and thermal plants

Market Dynamics in Edgeworth Exchange

Edgeworth exchange is the fundamental general equilibrium model, yet equilibrium predications and theories of price adjustment for this model remain untested. This paper reports an experimental test of Edgeworth exchange which demonstrates that prices and allocations converge sharply to the competitive equilibrium. Price convergence is evaluated with the tatonnement model, interpreted as a disequilibrium model of across- period price adjustment. Subsequently, the extent of within-period adjustment is compared to that of across-period adjustment. Since most observed price adjustment occurs within trading periods, price adjustment data is evaluated with two disequilibrium models of within- period trades. These models are the Geometric Mean model, which is formulated in this paper, and the Hahn process (Hahn and Negishi [1962]). Price dynamics from experiment sessions fit the Geometric Mean model better than the Hahn process, and in addition, the Geometric Mean model provides direction for development of an Edgeworth exchange bargaining model.Competitive equilibrium, disequilibrium dynamics, double auction, Edgeworth exchange, experimental economics, exchange economy, Hahn process, market dynamics

Reported Incomes and Marginal Tax Rates, 1960-2000: Evidence and Policy Implications

This paper use income tax return data from 1960 to 2000 to analyze the link between reported incomes and marginal tax rates. Only the top 1% incomes show evidence of behavioral responses to taxation. The data displays striking heterogeneity in the size of responses to tax changes overtime, with no response either short-term or long-term for the very large Kennedy top rate cuts in the early1960s, and striking evidence of responses, at least in the short-term, to the tax changes since the 1980s. The 1980s tax cuts generated a surge in business income reported by high income individual taxpayers due to a shift away from the corporate sector, and the disappearance of business losses for tax avoidance. The Tax Reform Act of 1986 and the recent 1993 tax increase generated large short-term responses of wages and salaries reported by top income earners, most likely due to re-timing in compensation to take advantage of the tax changes. However, it is unlikely that the extraordinary trend upward of the shares of total wages accruing to top wage income earners, which started in the 1970s and accelerated in the 1980s and especially the late 1990s, can be explained solely by the evolution of marginal tax rates.

Cognition in Seemingly Riskless Choices and Judgments

The assumption of given and known preferences and possibilities so common in economic theory stands in contradiction with the kind of unsystematic change that charaterizes many experimental and real situations. Consequently the theory misspecifies rational choice and generates many puzzles relating to marginal analysis, sunk costs, judgments of fairness, the endowment effect, etc. We instillate rational cognition and learning in seemingly riskless choices and judgments. Preferences and possibilities are given in a stochastic sense and based on revisable expectations. The theory predicts experimental preference reversals and passes a sharp econometric test of the status quo bias drawn from a field study. En sciences économiques, l'hypothèse que les préférences et les possibilités sont connues et données est largement contredite par des changements peu systématiques observés dans plusieurs expériences et situations réelles. La conséquence est que la théorie ne semble pas spécifier correctement la rationalité des choix et pose aux économistes plusieurs paradoxes reliés à l'analyse marginale, aux coûts historiques, sur les jugements de justice, sur les effets de dotation ou de statu quo, etc. Dans cette étude, nous concidérons la rationalité cognitive et l'apprentissage dans des situations de choix et de jugements apparemment sans risque. Les préférences et les possibilités sont données dans un sens stochastique et elles sont basées sur les anticipations qui sont révisées. La théorie proposée prédit des renversements de préférence dans les expériences et passe avec succès un test économétrique sur données réelles du paradoxe du biais du statu quo.

OpenMDAO: Framework for Flexible Multidisciplinary Design, Analysis and Optimization Methods

The OpenMDAO project is underway at NASA to develop a framework which simplifies the implementation of state-of-the-art tools and methods for multidisciplinary design, analysis and optimization. Foremost, OpenMDAO has been designed to handle variable problem formulations, encourage reconfigurability, and promote model reuse. This work demonstrates the concept of iteration hierarchies in OpenMDAO to achieve a flexible environment for supporting advanced optimization methods which include adaptive sampling and surrogate modeling techniques. In this effort, two efficient global optimization methods were applied to solve a constrained, single-objective and constrained, multiobjective version of a joint aircraft/engine sizing problem. The aircraft model, NASA's nextgeneration advanced single-aisle civil transport, is being studied as part of the Subsonic Fixed Wing project to help meet simultaneous program goals for reduced fuel burn, emissions, and noise. This analysis serves as a realistic test problem to demonstrate the flexibility and reconfigurability offered by OpenMDAO

Algorithm-supported, mass and sequence diversity-oriented random peptide library design.

Random peptide libraries that cover large search spaces are often used for the discovery of new binders, even when the target is unknown. To ensure an accurate population representation, there is a tendency to use large libraries. However, parameters such as the synthesis scale, the number of library members, the sequence deconvolution and peptide structure elucidation, are challenging when increasing the library size. To tackle these challenges, we propose an algorithm-supported approach to peptide library design based on molecular mass and amino acid diversity. The aim is to simplify the tedious permutation identification in complex mixtures, when mass spectrometry is used, by avoiding mass redundancy. For this purpose, we applied multi (two- and three-)-objective genetic algorithms to discriminate between library members based on defined parameters. The optimizations led to diverse random libraries by maximizing the number of amino acid permutations and minimizing the mass and/or sequence overlapping. The algorithm-suggested designs offer to the user a choice of appropriate compromise solutions depending on the experimental needs. This implies that diversity rather than library size is the key element when designing peptide libraries for the discovery of potential novel biologically active peptides

Conditional vs. Voluntary Contribution Mechanism – An Experimental Study

The Conditional Contribution Mechanism for public good provision gives all agents the possibility to condition their contribution on the total level of contribution provided by all agents. In this experimental study the mechanism's performance is compared to the performance of the Voluntary Contribution Mechanism. In an environment with binary contribution and linear valuations subjects play the mechanisms in a repeated setting. The mechanisms are compared in one case of complete information and homogeneous valuations and in a second case with heterogeneous valuations and incomplete information. In both cases a significantly higher contribution rate can be observed when the Conditional Contribution Mechanism is used