The ratchet effect in a two lag setting and the mitigating influence of yardstick competition

In order to increase efficiency in the provision of power distribution networks, the German regulator Bundesnetzagentur plans to implement revenue cap regulation together with yardstick competition. Revenue cap regulation could bear the ratchet effect: cost minimization need not to be optimal for the operator who anticipates that his revenue cap will become adjusted according to his cost performance. The regulator could extract all the rent by lowering an operator’s revenue cap to the level of costs he revealed to be possible for him to reach. The ratchet effect could be mitigated by yardstick competition at which the level of revenues that is allowed to one operator is tied to the performance of others that are comparable to him. One will only be allowed to accumulate revenues that recover the least cost level that has been adopted within the group of comparable decision makers. In a setting of two sequential regulatory lags, this paper examines the occurence of the ratchet effect and the mitigating influence that yardstick competition has on it.ratchet effect, yardstick competition, regulation

The ratchet effect in a two lag setting and the mitigating influence of yardstick competition

In order to increase efficiency in the provision of power distribution networks, the German regulator Bundesnetzagentur plans to implement revenue cap regulation together with yardstick competition. Revenue cap regulation could bear the ratchet effect: cost minimization need not to be optimal for the operator who anticipates that his revenue cap will become adjusted according to his cost performance. The regulator could extract all the rent by lowering an operator's revenue cap to the level of costs he revealed to be possible for him to reach. The ratchet effect could be mitigated by yardstick competition at which the level of revenues that is allowed to one operator is tied to the performance of others that are comparable to him. One will only be allowed to accumulate revenues that recover the least cost level that has been adopted within the group of comparable decision makers. In a setting of two sequential regulatory lags, this paper examines the occurence of the ratchet effect and the mitigating influence that yardstick competition has on it.ratchet effect, yardstick competition, regulation

Organic farming policy networks in Europe: context, actors and variation

Despite most having developed under the umbrella of the Common Agricultural Policy (CAP), national-level organic farming policy networks in Europe vary. The aim of this paper is to explore the reasons for this variation. Quantitative network analyses were carried out in five 'old' and five 'new' EU member states and in Switzerland. To examine the patterns of influence on these eleven policy networks, the cases are compared in two stages. First, we examine the factors co-varying with the size and density of the networks and then we apply a most similar system - most different outcome research design. We identify the political environment as the main factor affecting size and density of organic farming policy networks in Europe. The distribution of power between organic farming organizations and agricultural ministries is influenced by state involvement and by the resources available to organic farming policy actors

The Behavior of Epidemics under Bounded Susceptibility

We investigate the sensitivity of epidemic behavior to a bounded susceptibility constraint -- susceptible nodes are infected by their neighbors via the regular SI/SIS dynamics, but subject to a cap on the infection rate. Such a constraint is motivated by modern social networks, wherein messages are broadcast to all neighbors, but attention spans are limited. Bounded susceptibility also arises in distributed computing applications with download bandwidth constraints, and in human epidemics under quarantine policies. Network epidemics have been extensively studied in literature; prior work characterizes the graph structures required to ensure fast spreading under the SI dynamics, and long lifetime under the SIS dynamics. In particular, these conditions turn out to be meaningful for two classes of networks of practical relevance -- dense, uniform (i.e., clique-like) graphs, and sparse, structured (i.e., star-like) graphs. We show that bounded susceptibility has a surprising impact on epidemic behavior in these graph families. For the SI dynamics, bounded susceptibility has no effect on star-like networks, but dramatically alters the spreading time in clique-like networks. In contrast, for the SIS dynamics, clique-like networks are unaffected, but star-like networks exhibit a sharp change in extinction times under bounded susceptibility. Our findings are useful for the design of disease-resistant networks and infrastructure networks. More generally, they show that results for existing epidemic models are sensitive to modeling assumptions in non-intuitive ways, and suggest caution in directly using these as guidelines for real systems

High Dimensional Modulation and MIMO Techniques for Access Networks

Exploration of advanced modulation formats and multiplexing techniques for next generation optical access networks are of interest as promising solutions for delivering multiple services to end-users. This thesis addresses this from two different angles: high dimensionality carrierless amplitudephase (CAP) and multiple-input multiple-output (MIMO) radio-over-fiber (RoF) systems. High dimensionality CAP modulation has been investigated in optical fiber systems. In this project we conducted the first experimental demonstration of 3 and 4 dimensional CAP with bit rates up to 10 Gb/s. These results indicate the potentiality of supporting multiple users with converged services. At the same time, orthogonal division multiple access (ODMA) systems for multiple possible dimensions of CAP modulation has been demonstrated for user and service allocation in wavelength division multiplexing (WDM) optical access network. 2 x 2 MIMO RoF employing orthogonal frequency division multiplexing (OFDM) with 5.6 GHz RoF signaling over all-vertical cavity surface emitting lasers (VCSEL) WDM passive optical networks (PONs). We have employed polarization division multiplexing (PDM) to further increase the capacity per wavelength of the femto-cell network. Bit rate up to 1.59 Gbps with fiber-wireless transmission over 1 m air distance is demonstrated. The results presented in this thesis demonstrate the feasibility of high dimensionality CAP in increasing the number of dimensions and their potentially to be utilized for multiple service allocation to different users. MIMO multiplexing techniques with OFDM provides the scalability in increasing spectral effciency and bit rates for RoF systems. High dimensional CAP and MIMO multiplexing techniques are two promising solutions for supporting wired and hybrid wired-wireless access networks

Optimal regulation under unknown supply of distributed generation

As distributed generation (DG) continues to expand, larger low-voltage networks will be required in the future. However, regulated distribution network operators (DNOs) need to invest in new infrastructure without knowing a relevant determinant of network costs, the future amount of DG. Due to uncertainty, optimal network capacity needs to reflect the expected demand for capacity over all possible DG states. Therefore, not all capacity will be used if a low level of DG occurs. Optimal regulation that is set under asymmetric information about future DG needs to create incentives for the DNO to invest in this 'excess capacity' and also encourage optimal network utilization. In this case, an option menu that includes fixed fees and positive network charges on DG-producers fulfills these requirements and implements the first-best optimum. On the contrary, price-cap and revenue-cap regulation lead to either underinvestment or high information rents to the DNO.