Structuring Exotic Options Contracts on Water to Improve the Efficiency of Resource Allocation in the Water Spot Market

With the current drought in South-Eastern Australia highlighting the scarcity and value of inland Australia’s water resources, focus turns to how these resources can be allocated more efficiently. The first major step was taken almost a decade ago with the separation of land and water property rights allowing openly traded water markets. This study assesses the potential economic benefits that options contracts bring to the water market in the Murray Valley water market. Exotic call options are estimated using both Black-Scholes and skewness-and-kurtosis-amended Black-Scholes financial option pricing methods that are based on three years of data on water prices. While the presence of options would result in significant economic benefits in the more efficient trade of water on the open market for lower-value crops, there were mixed results from the attempt to price such options.options, skewness-and-kurtosis-amended Black-Scholes model, water, Environmental Economics and Policy, Financial Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

Dynamic Organizations: Achieving Marketplace Agility Through Workforce Scalability

Dynamic organizations (DOs) operate in business environments characterized by frequent and discontinuous change, They compete on the basis of marketplace agility; that is on their ability to generate a steady stream of both large and small innovations in products, services, solutions, business models, and even internal processes that enable them to leapfrog and outmaneuver current and would-be competitors and thus eke out a series of temporary competitive advantages that might, with luck, add up to sustained success over time. Marketplace agility requires the ongoing reallocation of resources, including human resources. We use the term workforce scalability to capture the capacity of an organization to keep its human resources aligned with business needs by transitioning quickly and easily from one human resource configuration to another and another, ad infinitum. We argue that marketplace agility is enhanced by workforce agility because it is likely to meet the four necessary and sufficient conditions postulated by the resource based view (RBV) of the firm – valuable, rare, inimitable, and non-substitutable – if it can be attained. Our analysis therefore concludes by focusing on the two dimensions of workforce scalability – alignment and fluidity – and postulating a number of principles that might be used to guide the design of an HR strategy that enhances both. Throughout the paper, key concepts are illustrated using the experiences of Google, the well-known Internet search firm. Because the analysis is speculative and intended primarily to pique the interest of researchers and practitioners, the paper ends with a number of important questions that remain to be clarified

Balancing the Tradeoff between Profit and Fairness in Rideshare Platforms During High-Demand Hours

Rideshare platforms, when assigning requests to drivers, tend to maximize profit for the system and/or minimize waiting time for riders. Such platforms can exacerbate biases that drivers may have over certain types of requests. We consider the case of peak hours when the demand for rides is more than the supply of drivers. Drivers are well aware of their advantage during the peak hours and can choose to be selective about which rides to accept. Moreover, if in such a scenario, the assignment of requests to drivers (by the platform) is made only to maximize profit and/or minimize wait time for riders, requests of a certain type (e.g. from a non-popular pickup location, or to a non-popular drop-off location) might never be assigned to a driver. Such a system can be highly unfair to riders. However, increasing fairness might come at a cost of the overall profit made by the rideshare platform. To balance these conflicting goals, we present a flexible, non-adaptive algorithm, \lpalg, that allows the platform designer to control the profit and fairness of the system via parameters $\alpha$ and $\beta$ respectively. We model the matching problem as an online bipartite matching where the set of drivers is offline and requests arrive online. Upon the arrival of a request, we use \lpalg to assign it to a driver (the driver might then choose to accept or reject it) or reject the request. We formalize the measures of profit and fairness in our setting and show that by using \lpalg, the competitive ratios for profit and fairness measures would be no worse than $\alpha/e$ and $\beta/e$ respectively. Extensive experimental results on both real-world and synthetic datasets confirm the validity of our theoretical lower bounds. Additionally, they show that \lpalg under some choice of $(\alpha, \beta)$ can beat two natural heuristics, Greedy and Uniform, on \emph{both} fairness and profit

Fairness, Efficiency and Insider Trading: Deconstructing the Coin of the Realm in the Information Age

Whether and how the federal securities laws should restrict insider trading is one of the most hotly debated topics in the securities law literature. Paradoxically, both the theoretical analysis and the legal rules concerning insider trading remain extraordinarily vague and ill-formed. What is the special character of insider trading that leads to this apparently irresolvable puzzle? In this Article, I argue that there is, in fact, nothing special about insider trading that creates this dilemma, but rather there is something special about the nature of information itself. Accordingly, this theoretical dilemma is not limited to insider trading regulation, but rather pervades all areas of intellectual property law. In this Article, I situate insider trading regulation within the larger body of intellectual property law by discussing three potential allocations of the property right in valuable inside information. First, inside information could be treated as a public resource, meaning that a person in possession of inside information could not legally exploit that advantage for personal profit. Such a regime would forbid some or all insider trading by forcing the disclosure to the marketplace of inside information prior to trading. I argue that regulators should reject this alternative because, despite it\u27s proponents\u27 tendency to justify the rule in terms of fairness, this proposal is unlikely to foster fairness in any meaningful way. Alternatively, the property right in valuable inside information could belong to issuers, as the producers of such information. I argue that regulators should reject this alternative because, despite its proponents? tendency to frame their arguments in terms of promoting informational efficiency, a legal regime treating inside information as the property of the issuer is unlikely to further that goal. In fact, such proposals assume an affirmative answer to a question that is fiercely debated in other areas of intellectual property law: does creating a property right in information producers incentivize additional production to the extent necessary to offset the social costs of excluding others from use of the information? Finally, the property right in valuable inside information could reside with outsider traders (traders who possess inside information, but are neither insiders nor constructive insiders of the issuer). I argue that regulators should pursue this alternative because, although there is no need to encourage issuers to create valuable inside information, the need to encourage the dissemination of such information to the marketplace has been recognized for many years. Accordingly, I propose in this Article a system of federal securities regulation that would permit trading by corporate outsiders who did not receive their information in a tip from an insider or constructive insider. Such a system, I argue, provides the hope of filling in the gaps left by the current disclose or abstain system, by encouraging the reflection of material information in stock market price without disclosure of the actual inside information. At the same time, this proposal avoids the perverse incentives and negative impacts on market efficiency attendant in a system that permits insider trading by corporate employees

Correlated Resource Models of Internet End Hosts

Understanding and modelling resources of Internet end hosts is essential for the design of desktop software and Internet-distributed applications. In this paper we develop a correlated resource model of Internet end hosts based on real trace data taken from the SETI@home project. This data covers a 5-year period with statistics for 2.7 million hosts. The resource model is based on statistical analysis of host computational power, memory, and storage as well as how these resources change over time and the correlations between them. We find that resources with few discrete values (core count, memory) are well modeled by exponential laws governing the change of relative resource quantities over time. Resources with a continuous range of values are well modeled with either correlated normal distributions (processor speed for integer operations and floating point operations) or log-normal distributions (available disk space). We validate and show the utility of the models by applying them to a resource allocation problem for Internet-distributed applications, and demonstrate their value over other models. We also make our trace data and tool for automatically generating realistic Internet end hosts publicly available

Mainstreaming New Renewable Energy Technologies

This paper outlines the benefits, obstacles and options for governments to support international markets for technology development. International markets for new energy technologies offer greater scope, thereby increasing the incentives and opportunities for technology improvements. As the market is supported by more independent governments, the confidence of technology developers and producers that future markets for their products will exist is increasing, thus enabling capital access and inducing R&D investment and exploration of improved production processes. The bigger markets also allow for international competition, thus allowing for the application of the best available technology. The government challenge to induce sufficient RD&D remains and with international markets the benefits and costs of national governments free-riding on international effort needs to be addressed. Finally, we discuss how international co-operation can be used to evolve the energy system in such a way that it can integrate new technologies at minimum cost

Fairness, Efficiency and Insider Trading: Deconstructing the Coin of the Realm in the Information Age

Whether and how the federal securities laws should restrict insider trading is one of the most hotly debated topics in the securities law literature. Paradoxically, both the theoretical analysis and the legal rules concerning insider trading remain extraordinarily vague and ill-formed. What is the special character of insider trading that leads to this apparently irresolvable puzzle? In this Article, I argue that there is, in fact, nothing special about insider trading that creates this dilemma, but rather there is something special about the nature of information itself. Accordingly, this theoretical dilemma is not limited to insider trading regulation, but rather pervades all areas of intellectual property law. In this Article, I situate insider trading regulation within the larger body of intellectual property law by discussing three potential allocations of the property right in valuable inside information. First, inside information could be treated as a public resource, meaning that a person in possession of inside information could not legally exploit that advantage for personal profit. Such a regime would forbid some or all insider trading by forcing the disclosure to the marketplace of inside information prior to trading. I argue that regulators should reject this alternative because, despite it\u27s proponents\u27 tendency to justify the rule in terms of fairness, this proposal is unlikely to foster fairness in any meaningful way. Alternatively, the property right in valuable inside information could belong to issuers, as the producers of such information. I argue that regulators should reject this alternative because, despite its proponents? tendency to frame their arguments in terms of promoting informational efficiency, a legal regime treating inside information as the property of the issuer is unlikely to further that goal. In fact, such proposals assume an affirmative answer to a question that is fiercely debated in other areas of intellectual property law: does creating a property right in information producers incentivize additional production to the extent necessary to offset the social costs of excluding others from use of the information? Finally, the property right in valuable inside information could reside with outsider traders (traders who possess inside information, but are neither insiders nor constructive insiders of the issuer). I argue that regulators should pursue this alternative because, although there is no need to encourage issuers to create valuable inside information, the need to encourage the dissemination of such information to the marketplace has been recognized for many years. Accordingly, I propose in this Article a system of federal securities regulation that would permit trading by corporate outsiders who did not receive their information in a tip from an insider or constructive insider. Such a system, I argue, provides the hope of filling in the gaps left by the current disclose or abstain system, by encouraging the reflection of material information in stock market price without disclosure of the actual inside information. At the same time, this proposal avoids the perverse incentives and negative impacts on market efficiency attendant in a system that permits insider trading by corporate employees