Information Flow under Budget Constraints

Although first proposed in the database theory as properties of functional dependencies between attributes, Armstrong\u27s axioms capture general principles of information flow by describing properties of dependencies between sets of pieces of information. This article generalizes Armstrong\u27s axioms to a setting in which there is a cost associated with information. The proposed logical system captures general principles of dependencies between pieces of information constrained by a given budget

Optimal Transmission Capacity under Nodal Pricing and Incentive Regulation for Transco

This paper examines regulatory incentive mechanisms for efficient investment in the transmission network, taking into account both technological externalities among transmission lines and information asymmetry between the regulator and the transmission company (Transco). First, by adding extra constraints associated with the power flow, we develop an extended price cap mechanism that can internalize technological externalities among transmission lines. We show that this new mechanism induces the Transco to choose the optimal transmission capacity under its budget constraint. An extended form of the Vogelsang and Finsinger (V-F) mechanism is also introduced. Next, we examine the surplus-based scheme with government transfers. We provide a formal analysis of the incremental surplus subsidy (ISS) scheme specifically for the Transco, demonstrating that it induces the Transco to choose the optimal transmission capacity without the budget constraint.

Large firms and soft budget constraints for transition economies

Whilst the adverse effect of soft budget constraints (SBCs) is politically and theoretically recognised in transition economies, there is a lack of empirical investigation of SBCs to determine the extent of the bearing on the economy. This article empirically examines the impact of SBCs on investment for large firms in six new European Union (EU) member states. The conventional investment model is challenged by augmenting the model with the variable of ‘bank loans’ as a proxy to capture the impact of SBCs. The panel estimation reveals that there is a clear indication of SBCs for the Czech Republic and Poland, whereas for Hungary and the Baltic countries, the operation of SBCs seems to be weak. It is also found that such factors as joining the EU and financial development mitigate the practice of SBCs

Scalable Robust Kidney Exchange

In barter exchanges, participants directly trade their endowed goods in a constrained economic setting without money. Transactions in barter exchanges are often facilitated via a central clearinghouse that must match participants even in the face of uncertainty---over participants, existence and quality of potential trades, and so on. Leveraging robust combinatorial optimization techniques, we address uncertainty in kidney exchange, a real-world barter market where patients swap (in)compatible paired donors. We provide two scalable robust methods to handle two distinct types of uncertainty in kidney exchange---over the quality and the existence of a potential match. The latter case directly addresses a weakness in all stochastic-optimization-based methods to the kidney exchange clearing problem, which all necessarily require explicit estimates of the probability of a transaction existing---a still-unsolved problem in this nascent market. We also propose a novel, scalable kidney exchange formulation that eliminates the need for an exponential-time constraint generation process in competing formulations, maintains provable optimality, and serves as a subsolver for our robust approach. For each type of uncertainty we demonstrate the benefits of robustness on real data from a large, fielded kidney exchange in the United States. We conclude by drawing parallels between robustness and notions of fairness in the kidney exchange setting.Comment: Presented at AAAI1