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

Deriving Digital Energy Platform Archetypes for Manufacturing – A Data-Driven Clustering Approach

External factors such as climate change and the current energy crisis due to global conflicts are leading to the increasing relevance of energy consumption and energy procurement in the manufacturing industry. In addition to the growing call for sustainability, companies are increasingly struggling with rising energy costs and the reliability of the power grid, which endangers the competitiveness of companies and regions affected by high energy prices. Appropriate measures for energy-efficient and, not least, energy-flexible production are necessary. In addition to innovations and optimizations of plants and processes, digital energy platforms for the visualization, analysis, optimization, and control of energy flows are becoming essential. Over time, several digital energy platforms emerged on the market. The number and the different functionalities of the platforms make it challenging for classic manufacturing companies to keep track and select the right digital energy platform. In literature, the characteristics and functionalities of digital energy platforms have already been identified and structured. However, a classification of existing platforms into archetypes makes it easier for companies to select the platforms providing the missing functionality. To tackle this issue, we conducted an explorative and data-driven cluster analysis based on 49 existing digital energy platforms to identify digital energy platform archetypes and derive implications for research and practice. The results show five different archetypes that differ primarily in terms of functionalities on energy market integration. The identified archetypes provide a well-founded overview of the similarities and differences of digital energy platforms. Decision makers in manufacturing companies will benefit from the archetypes in future analyses as decision support in procurement processes and modifications of digital energy platforms

A Survey of Green Networking Research

Reduction of unnecessary energy consumption is becoming a major concern in wired networking, because of the potential economical benefits and of its expected environmental impact. These issues, usually referred to as "green networking", relate to embedding energy-awareness in the design, in the devices and in the protocols of networks. In this work, we first formulate a more precise definition of the "green" attribute. We furthermore identify a few paradigms that are the key enablers of energy-aware networking research. We then overview the current state of the art and provide a taxonomy of the relevant work, with a special focus on wired networking. At a high level, we identify four branches of green networking research that stem from different observations on the root causes of energy waste, namely (i) Adaptive Link Rate, (ii) Interface proxying, (iii) Energy-aware infrastructures and (iv) Energy-aware applications. In this work, we do not only explore specific proposals pertaining to each of the above branches, but also offer a perspective for research.Comment: Index Terms: Green Networking; Wired Networks; Adaptive Link Rate; Interface Proxying; Energy-aware Infrastructures; Energy-aware Applications. 18 pages, 6 figures, 2 table

Green Cellular Networks: A Survey, Some Research Issues and Challenges

Energy efficiency in cellular networks is a growing concern for cellular operators to not only maintain profitability, but also to reduce the overall environment effects. This emerging trend of achieving energy efficiency in cellular networks is motivating the standardization authorities and network operators to continuously explore future technologies in order to bring improvements in the entire network infrastructure. In this article, we present a brief survey of methods to improve the power efficiency of cellular networks, explore some research issues and challenges and suggest some techniques to enable an energy efficient or "green" cellular network. Since base stations consume a maximum portion of the total energy used in a cellular system, we will first provide a comprehensive survey on techniques to obtain energy savings in base stations. Next, we discuss how heterogeneous network deployment based on micro, pico and femto-cells can be used to achieve this goal. Since cognitive radio and cooperative relaying are undisputed future technologies in this regard, we propose a research vision to make these technologies more energy efficient. Lastly, we explore some broader perspectives in realizing a "green" cellular network technologyComment: 16 pages, 5 figures, 2 table

Of impacts, agents, and functions: An interdisciplinary meta-review of smart home energy management systems research

Smart home energy management technologies (SHEMS) have long been viewed as a promising opportunity to manage the way households use energy. Research on this topic has emerged across a variety of disciplines, focusing on different pieces of the SHEMS puzzle without offering a holistic vision of how these technologies and their users will influence home energy use moving forward. This paper presents the results of a systematic, interdisciplinary meta-review of SHEMS literature, assessing the extent to which it discusses the role of various SHEMS components in driving energy benefits. Results reveal a bias towards technical perspectives and controls approaches that seek to drive energy impacts such as load management and energy savings through SHEMS without user or third-party participation. Not only are techno-centric approaches more common, there is also a lack of integration of these approaches with user-centric, information-based solutions for driving energy impacts. These results suggest future work should investigate more holistic solutions for optimal impacts on household energy use. We hope these results will provoke a broader discussion about how to advance research on SHEMS to capitalize on their potential contributions to demand-side management initiatives moving forward

Engineering Local Electricity Markets for Residential Communities

In line with the progressing decentralization of electricity generation, local electricity markets (LEMs) support electricity end customers in becoming active market participants instead of passive price takers. They provide a market platform for trading locally generated (renewable) electricity between residential agents (consumers, prosumers, and producers) within their community. Based on a structured literature review, a market engineering framework for LEMs is developed. The work focuses on two of the framework\u27s eight components, namely the agent behavior and the (micro) market structure. Residential agent behavior is evaluated in two steps. Firstly, two empirical studies, a structural equation model-based survey with 195 respondents and an adaptive choice-based conjoint study with 656 respondents, are developed, conducted and evaluated. Secondly, a discount price LEM is designed following the surveys\u27 results. Theoretical solutions of the LEM bi-level optimization problem with complete information and heuristic reinforcement learning with incomplete information are investigated in a multi-agent simulation to find the profit-maximizing market allocations. The (micro) market structure is investigated with regards to LEM business models, information systems and real-world application projects. Potential business models and their characteristics are combined in a taxonomy based on the results of 14 expert interviews. Then, the Smart Grid Architecture Model is utilized to derive the organizational, informational, and technical requirements for centralized and distributed information systems in LEMs. After providing an overview on current LEM implementations projects in Germany, the Landau Microgrid Project is used as an example to test the derived requirements. In conclusion, the work recommends current LEM projects to focus on overall discount electricity trading. Premium priced local electricity should be offered to subgroups of households with individual higher valuations for local generation. Automated self-learning algorithms are needed to mitigate the trading effort for residential LEM agents in order to ensure participation. The utilization of regulatory niches is suggested until specific regulations for LEMs are established. Further, the development of specific business models for LEMs should become a prospective (research) focus