35,893 research outputs found
Incentive Regulation for Electricity Networks
Elektrizitätswirtschaft, Anreizregulierung, Electric utility industry, Incentive regulation
Online Pricing with Offline Data: Phase Transition and Inverse Square Law
This paper investigates the impact of pre-existing offline data on online
learning, in the context of dynamic pricing. We study a single-product dynamic
pricing problem over a selling horizon of periods. The demand in each
period is determined by the price of the product according to a linear demand
model with unknown parameters. We assume that before the start of the selling
horizon, the seller already has some pre-existing offline data. The offline
data set contains samples, each of which is an input-output pair consisting
of a historical price and an associated demand observation. The seller wants to
utilize both the pre-existing offline data and the sequential online data to
minimize the regret of the online learning process.
We characterize the joint effect of the size, location and dispersion of the
offline data on the optimal regret of the online learning process.
Specifically, the size, location and dispersion of the offline data are
measured by the number of historical samples , the distance between the
average historical price and the optimal price , and the standard
deviation of the historical prices , respectively. We show that the
optimal regret is , and design a learning algorithm based on the
"optimism in the face of uncertainty" principle, whose regret is optimal up to
a logarithmic factor. Our results reveal surprising transformations of the
optimal regret rate with respect to the size of the offline data, which we
refer to as phase transitions. In addition, our results demonstrate that the
location and dispersion of the offline data also have an intrinsic effect on
the optimal regret, and we quantify this effect via the inverse-square law.Comment: Forthcoming in Management Scienc
Incentive Regulation in Theory and Practice: Electricity Distribution and Transmission Networks
Modern theoretical principles to govern the design of incentive regulation mechanisms are reviewed and discussed. General issues associated with applying these principles in practice are identified. Examples of the actual application of incentive regulation mechanisms to the regulation of prices and service quality for 'unbundled' transmission and distribution networks are presented and discussed. Evidence regarding the performance of incentive regulation in practice for electric distribution and transmission networks is reviewed. Issues for future research are identified.
Regulation, competition, and liberalization
In many countries throughout the world, regulators are struggling to determine whether and how to introduce competition into regulated industries. This essay examines the complexities involved in the liberalization process. While stressing the importance of case-specific analyses, this essay distinguishes liberalization policies that generally are pro-competitive from corresponding anti-competitive liberalization policies
MILK PRICING IN THE UNITED STATES
This report provides a primer on the complex pricing system that has evolved in the United States to deal with milk production, its assembly (collection), and its distribution to alternative users. All the various government and private institutions making up the system are expected to work together to ensure that the public gets the milk it wants, while dairy farmers get the economic returns needed to provide the milk. The major institutions are the Federal milk price support program and milk marketing orders, the Northeast Interstate Dairy Compact, State regulations, dairy cooperatives, and milk and dairy product futures and options markets. Our goal is to provide a primer on milk pricing that can serve as a steppingstone to other, more detailed works for those so inclined.Dairy, milk pricing, Demand and Price Analysis, Livestock Production/Industries,
WARNING: Physics Envy May Be Hazardous To Your Wealth!
The quantitative aspirations of economists and financial analysts have for
many years been based on the belief that it should be possible to build models
of economic systems - and financial markets in particular - that are as
predictive as those in physics. While this perspective has led to a number of
important breakthroughs in economics, "physics envy" has also created a false
sense of mathematical precision in some cases. We speculate on the origins of
physics envy, and then describe an alternate perspective of economic behavior
based on a new taxonomy of uncertainty. We illustrate the relevance of this
taxonomy with two concrete examples: the classical harmonic oscillator with
some new twists that make physics look more like economics, and a quantitative
equity market-neutral strategy. We conclude by offering a new interpretation of
tail events, proposing an "uncertainty checklist" with which our taxonomy can
be implemented, and considering the role that quants played in the current
financial crisis.Comment: v3 adds 2 reference
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