A looming revolution: Implications of self-generation for the risk exposure of retailers. ESRI WP597, September 2018

Managing the risk associated with uncertain load has always been a challenge for retailers in electricity markets. Yet the load variability has been largely predictable in the past, especially when aggregating a large number of consumers. In contrast, the increasing penetration of unpredictable, small-scale electricity generation by consumers, i.e. self-generation, constitutes a new and yet greater volume risk. Using value-at-risk metrics and Monte Carlo simulations based on German historical loads and prices, the contribution of decentralized solar PV self-generation to retailers’ load and revenue risks is assessed. This analysis has implications for the consumers’ welfare and the overall efficiency of electricity markets

When Can Limited Randomness Be Used in Repeated Games?

The central result of classical game theory states that every finite normal form game has a Nash equilibrium, provided that players are allowed to use randomized (mixed) strategies. However, in practice, humans are known to be bad at generating random-like sequences, and true random bits may be unavailable. Even if the players have access to enough random bits for a single instance of the game their randomness might be insufficient if the game is played many times. In this work, we ask whether randomness is necessary for equilibria to exist in finitely repeated games. We show that for a large class of games containing arbitrary two-player zero-sum games, approximate Nash equilibria of the $n$-stage repeated version of the game exist if and only if both players have $\Omega(n)$ random bits. In contrast, we show that there exists a class of games for which no equilibrium exists in pure strategies, yet the $n$-stage repeated version of the game has an exact Nash equilibrium in which each player uses only a constant number of random bits. When the players are assumed to be computationally bounded, if cryptographic pseudorandom generators (or, equivalently, one-way functions) exist, then the players can base their strategies on "random-like" sequences derived from only a small number of truly random bits. We show that, in contrast, in repeated two-player zero-sum games, if pseudorandom generators \emph{do not} exist, then $\Omega(n)$ random bits remain necessary for equilibria to exist

Randomness Extraction in AC0 and with Small Locality

Randomness extractors, which extract high quality (almost-uniform) random bits from biased random sources, are important objects both in theory and in practice. While there have been significant progress in obtaining near optimal constructions of randomness extractors in various settings, the computational complexity of randomness extractors is still much less studied. In particular, it is not clear whether randomness extractors with good parameters can be computed in several interesting complexity classes that are much weaker than P. In this paper we study randomness extractors in the following two models of computation: (1) constant-depth circuits (AC0), and (2) the local computation model. Previous work in these models, such as [Vio05a], [GVW15] and [BG13], only achieve constructions with weak parameters. In this work we give explicit constructions of randomness extractors with much better parameters. As an application, we use our AC0 extractors to study pseudorandom generators in AC0, and show that we can construct both cryptographic pseudorandom generators (under reasonable computational assumptions) and unconditional pseudorandom generators for space bounded computation with very good parameters. Our constructions combine several previous techniques in randomness extractors, as well as introduce new techniques to reduce or preserve the complexity of extractors, which may be of independent interest. These include (1) a general way to reduce the error of strong seeded extractors while preserving the AC0 property and small locality, and (2) a seeded randomness condenser with small locality.Comment: 62 page