1,425 research outputs found
Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate versus Time-of-Day Pricing
Mobile data traffic has been steadily rising in the past years. This has
generated a significant interest in the deployment of incentive mechanisms to
reduce peak-time congestion. Typically, the design of these mechanisms requires
information about user demand and sensitivity to prices. Such information is
naturally imperfect. In this paper, we propose a \emph{fixed-budget rebate
mechanism} that gives each user a reward proportional to his percentage
contribution to the aggregate reduction in peak time demand. For comparison, we
also study a time-of-day pricing mechanism that gives each user a fixed reward
per unit reduction of his peak-time demand. To evaluate the two mechanisms, we
introduce a game-theoretic model that captures the \emph{public good} nature of
decongestion. For each mechanism, we demonstrate that the socially optimal
level of decongestion is achievable for a specific choice of the mechanism's
parameter. We then investigate how imperfect information about user demand
affects the mechanisms' effectiveness. From our results, the fixed-budget
rebate pricing is more robust when the users' sensitivity to congestion is
"sufficiently" convex. This feature of the fixed-budget rebate mechanism is
attractive for many situations of interest and is driven by its closed-loop
property, i.e., the unit reward decreases as the peak-time demand decreases.Comment: To appear in IEEE/ACM Transactions on Networkin
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Electricity transmission: an overview of the current debate
Electricity transmission has emerged as critical for successfully liberalising powermarkets. This paper surveys the issues currently under discussion and provides a framework for the remaining papers in this issue. We conclude that signalling the efficient location of generation investment might require even a competitive LMP system to be complemented with deep connection charges. Although a Europe-wide LMP system is desirable, it appears politically problematic, so an integrated system of market coupling, possibly evolving by voluntary participation, should have high priority. Merchant investors may be able to increase interconnector capacity, although this is not unproblematic and raises new regulatory issues. A key issue that needs further research is how to better incentivize TSOs, especially with respect to cross-border issues
Monetary Exchange with Multilateral Matching
This paper analyzes monetary exchange in a search model allowing
for multilateral matches to be formed, according to a standard urn-ball
process. We consider three physical environments: indivisible goods
and money, divisible goods and indivisible money, and divisible goods
and money. We compare the results with Kiyotaki and Wright (1993),
Trejos and Wright (1995), and Lagos and Wright (2005) respectively.
We ĂâŠnd that the multilateral matching setting generates very simple
and intuitive equilibrium allocations that are similar to those in the
other papers, but which have important diÀerences. In particular, sur-
plus maximization can be achieved in this setting, in equilibrium, with
a positive money supply. Moreover, with ĂâĄexible prices and directed
search, the ĂâŠrst best allocation can be attained through price posting
or through auctions with lotteries, but not through auctions without
lotteries. Finally, analysis of the case of divisible goods and money
can be performed without the assumption of large families (as in Shi
(1997)) or the day and night structure of Lagos and Wright (2005)Matching, Money, Directed Search
Monetary Exchange with Multilateral Matching
This paper analyzes monetary exchange in a search model allowing for multilateral matches to be formed, according to a standard urn-ballprocess. We consider three physical environments: indivisible goods and money, divisible goods and indivisible money, and divisible goods and money. We compare the results with Kiyotaki and Wright (1993), Trejos and Wright (1995), and Lagos and Wright (2005) respectively. We find that the multilateral matching setting generates very simple and intuitive equilibrium allocations that are similar to those in the other papers, but which have important differences. In particular, surplus maximization can be achieved in this setting, in equilibrium, with a positive money supply. Moreover, with flexible prices and directed search, the first best allocation can be attained through price posting or through auctions with lotteries, but not through auctions without lotteries. Finally, analysis of the case of divisible goods and money can be performed without the assumption of large families (as in Shi (1997)) or the day and night structure of Lagos and Wright (2005).monetary exchange; directed search; ex post bidding; multilateral matching
"Strategic Default Jump as Impulse Control in Continuous Time"
This paper presents a new approach for modeling an optimal debt contract in continuous time. It examines a competing contract design in a continuous-time environment with Markov income shocks and costly veri able information. It shows that an optimal contract has the form of a long-term debt contract that permits a debtor's strategic default and debt restructuring. The default is characterized by a recurrent, optimal impulse control beyond default. Numerical examples show that the equilibrium probability of the default is decreasing in the monitoring technology level when the default causes a big wealth loss.
Inflation, output, and welfare
This paper studies the effects of anticipated inflation on aggregate output and welfare within a search-theoretic framework. We allow money-holders to choose the intensities with which they search for trading partners, so inflation affects the frequency of trade as well as the quantity of output produced in each trade. We consider the standard pricing mechanism for search models, i.e., ex-post bargaining, as well as a notion of competitive pricing. If prices are bargained over, the equilibrium is generically inefficient and an increase in inflation reduces buyersâ search intensities, output, and welfare. If prices are posted and buyers can direct their search, search intensities are increasing with inflation for low inflation rates and decreasing for high inflation rates. The Friedman rule achieves the first best allocation and inflation always reduces welfare even though it can have a positive effect on output for low inflation rates.Inflation (Finance)
Inflation, output and welfare
This paper studies the effects of anticipated inflation on aggregate output and welfare within a search-theoretic framework. We allow money-holders to choose the intensities with which they search for trading partners, so inflation affects the frequency of trade as well as the quantity of output produced in each trade. We consider the standard pricing mechanism for search models, i.e., ex post bargaining, as well as a notion of competitive pricing. If prices are bargained over, the equilibrium is generically inefficient and an increase in inflation reduces buyers? search intensities, output and welfare. If prices are posted and buyers can direct their search, search intensities are increasing with inflation for low inflation rates and decreasing for high inflation rates. The Friedman Rule achieves the first-best allocation and inflation always reduces welfare even though it can have a positive effect on output for low inflation rates.Inflation (Finance) ; Welfare
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