Optimal congestion treatment for bilateral electricity trading

How to treat transmission constraints in electricity markets that are not based on a pool but on bilateral trading? Three approaches are currently discussed: First, the system operator resolves constraints and socialises costs; second, physical transmission contracts; third, locational charging with the option of financial hedging. Socialisation of costs for constraint resolution results in inefficient dispatch and incorrect incentives for investment in generation. Physical contracts and locational charging designs have identical properties in a very simplified model world, but differ if transaction costs, illiquid markets and uncertainty about demand are considered. Physical transmission contracts are best designed as zonal access rights, but have to be centrally administered to be efficient. Only locational charging can cope with uncertainty and volatility of electricity demand efficiently and non-discriminatory. Qualitative arguments allow ranking of designs involving physical contracts and locational charging. Comparison with a system operator socialising costs requires network specific analysis.Electricity Networks, Constraint Management, Market Design, Bilateral Trading

Complexity of stability in trading networks

Efficient computability is an important property of solution concepts. We consider the computational complexity of finding and verifying various solution concepts in trading networks—multi-sided matching markets with bilateral contracts and without transferable utility—under the assumption of full substitutability of agents’ preferences. It is known that outcomes that satisfy trail stability always exist and can be found in linear time. However, we show that the existence of stable outcomes—immune to deviations by arbitrary sets of agents—is an NP -hard problem in trading networks. We also show that even verifying whether a given outcome is stable is NP -hard in trading networks

Contract Enforcement, Institutions and Social Capital: The Maghribi Traders Reappraised

Economists draw important lessons for modern development from the medieval Maghribi traders who, according to Greif, enforced contracts multilaterally through a closed, private-order ‘coalition’. We show that this view is untenable. The Maghribis used formal legal mechanisms and entered business associations with non-Maghribis. Not a single empirical example adduced by Greif shows that any ‘coalition’ actually existed. The Maghribis cannot be used to argue that the social capital of exclusive networks will facilitate exchange in developing economies. Nor do they provide any support for the cultural theories of economic development and institutional change for which they have been mobilised

Firms, Courts, and Reputation Mechanisms: Towards a Positive Theory of Private Ordering

This Essay formulates a positive model that predicts when commercial parties will employ private ordering to enforce their agreements. The typical enforcement mechanism associated with private ordering is the reputation mechanism, in which a merchant community punishes parties in breach of contract by denying them future business. The growing private ordering literature argues that these private enforcement mechanisms can be superior to the traditional, less efficient enforcement measures provided by public courts. However, previous comparisons between public and private contractual enforcement have presented a misleading dichotomy by failing to consider a third enforcement mechanim: the vertically integrated firm. This Essay develops a model that comprehensively addresses three distinct types of enforcement mechanisms--firms, courts, and reputation-based private ordering. The model rests on a synthesis of transaction cost economics, which compares the efficiencies of firms versus markets, and the private ordering literature, which compares the efficiencies of public courts versus private ordering. It hypothesizes that private ordering will arise when agreements present enforcement difficulties, high-powered market incentives are important, and the costs of entry barriers are low. The Essay then conducts an illustrative test by comparing the model\u27s predictions to documented instances of private ordering

Information Networks and Worker Recruitment

This paper studies experimentally how the existence of social information networks affects the ways in which firms recruit new personnel. Through such networks firms learn about prospective employees' performance in previous jobs. Assuming individualistic preferences social networks are predicted not to affect overall labor market behavior, while with social preferences the prediction is that when bilaterally negotiated: (i) wages will be higher and (ii) that workers in jobs with incomplete contracts will respond with higher effort. Our experimental results are consistent with the social preferences view, both for the case of excess demand and excess supply of labor. In particular, the presence of information networks leads to more efficient allocations.Labor Markets, Information Networks, Worker Recruitment, Indirect reciprocity, Experiments

From the Group of Twenty to the Group of Two: The Need for Harmonizing Derivatives Regulation Between the United States and the European Union

Wireless Sensor Networks are often deployed in great numbers spanning large, sometimes hard to reach and hostile, areas with the aim of monitoring environmental conditions through the use of different sensors. Due to decreasing costs of ownership (e.g. non-proprietary protocols), recent advances in processor, radio, and memory technologies and the engineering of increasingly smaller sensing devices, the availability and area of application for wireless sensor networks have steadily been increasing. Sigma Technology Development Stockholm AB raised the question as to whether a wireless sensor network, running an open-source operating system and communicating over IPv6, could be used in the field of smart autonomous irrigation? The company also required a proof-of-concept system for demonstration purposes and to identify if the design choices made were suitable for an actual implementation. There are numerous of design decisions that have to be made when constructing an irrigation system: the back-end set-up, which irrigation algorithms to use, what hardware to choose and how to communicate? This thesis therefore focuses on the overall system design of a wireless sensor network in the field of irrigation and highlights the trade-offs being made and their pros and cons. Two improvements related to the existing technology and the proof-of-concept system are presented in this thesis. Firstly, the recommendation to use clustered self-healing routing despite claimed power consumption issues. Secondly, a new technique to minimize power consumption, by dynamically changing the sleep interval on the sensor nodes with the help of weather data. Furthermore, the proof-of-concept system is constructed and analysed to assess whether the system design choices made are valid for a real-life deployment.Trådlösa sensor nätverk används för att övervaka lokala miljöförändringar med hjälp av olika sorters sensorer. På grund av nedåtgående driftkostnader (ökad tillgänglighet av open-source mjukvara) och framsteg inom processor-, radio-, och datorminnesteknolgi har både tillgängligheten och användningsområdena för trådlösa sensornätverk stadigt ökat. Sigma Technology Development AB ställde frågan huruvida ett trådlöst sensornätverk, som använder sig av ett open-source operativsystem och kommunicerar över IPv6, kunde användas inom smart konstbevattning? Företaget ville även att ett proof-ofconcept system utvecklades för demonstration samt för att kunna avgöra om de designval som gjorts är lämpliga att använda i en verklig implementation. Det finns en mängd designval som måste göras när man konstruerar ett bevattningsystem: back-end lösningen, vilka bevattningsalogritmer som ska användas, vilken hårdvara som ska användas samt hur kommunikationen mellan noderna ska upprättas? Det här examensarbetet fokuserar därför på den övergripande systemdesigen av ett trådlöst sensornätverk inom konstbevattning, utvärderar och avgör vilka kompromisser som måste göras samt för- och nackdelarna med dessa val. Examensarbetet presenterar vidare två förbättringar på det utvecklade konceptsystemet som inte heller finns på marknanden. Först rekommenderas användandet av robusta självläkande routing protokoll trots påstådda energiförbrukningsproblem. Sedan föreslås även en teknik som minimerar energiåtgången genom att dynamiskt ändra hur länge sensornoden befinner sig i ’sleep mode’, detta med hjälp av insamlad väderdata. Slutligen så konstrueras och analyseras proof-of-concept systemet för att utvärdera om dessa designval är lämpliga för en implementering i det verkliga livet