Towards a complete real-time electricity market design

The general design for the real-time electricity market presented in this paper optimizes and prices both real and reactive power simultaneously in an AC setting, where all assets—generation, load and transmission—are allowed to bid and are financially settled at the locational price times energy consumed or produced. The result is that transmission lines are compensated for both capacity and admittance, providing incentives for efficient operation of transmission-related assets such as FACTS devices, if price-taking behavior is assumed. Losses are incorporated into the design and become an operating cost for transmission. The market design is shown to be revenue neutral and, under some assumptions, nonconfiscatory.      

Komplexität erfolgreich steuern — 27. Österreichischer Controllertag in Wien

Ohne Zusammenfassung     

A generalization of Condorcet’s Jury Theorem to weighted voting games with many small voters

We extend Condorcet’s Jury Theorem (Essai sur l’application de l’analyse à la probabilité des décisions rendues à la pluralité des voix. De l’imprimerie royale, 1785) to weighted voting games with voters of two kinds: a fixed (possibly empty) set of ‘major’ voters with fixed weights, and an ever-increasing number of ‘minor’ voters, whose total weight is also fixed, but where each individual’s weight becomes negligible. As our main result, we obtain the limiting probability that the jury will arrive at the correct decision as a function of the competence of the few major players. As in Condorcet’s result the quota q = 1/2 is found to play a prominent role. I wish to thank Maurice Koster, Moshé Machover, Guillermo Owen and two anonymous referees for helpful comments.     

Background Risk and the Performance of Insurance Markets under Adverse Selection

Background risk can influence the performance of insurance markets that must deal with adverse selection when applicants are risk vulnerable, since they are more averse to bearing the insurable risk as a result of their exposures to background risk. We show that background risk always results in a lower deductible for the incentive constrained contract, and that a broader range of markets attains the stable sequential equilibrium cross-subsidized pair of separating contracts. We conclude that background risk always improves the performance of markets for coverage against (insurable) foreground risks that must deal with adverse selection. We also find, however, that these improvements are never sufficient to offset the cost to insureds of bearing the background risk.     

HOUSEHOLD AND ENTERPRISE SAVING AND CAPITAL FORMATION IN THE UNITED STATES: A MARKET TRANSACTIONS VIEW

Contrary to conventional macro theory, it is not the consumption function in terms of either the permanent income or the life-cycle theory of saving that has furnished the saving for enterprise capital formation in the United States. Household sector accounts indicate that household gross saving, correctly measured, did not exceed household gross capital formation in the United States over the period since 1947. Furthermore, historical data on enterprise saving and capital formation in the United States, and cross-section tax return data of U.S. corporations indicate that the gross saving for many enterprise sectors has been equal to or greater than their gross capital formation. There are exceptions, however: these same sources indicate that public utilities have borrowed substantially to finance their capital formation. Finally, it is argued that employer pension and insurance reserves held by financial institutions for future benefit payments represent retained income of a nature similar to undistributed profits, and that these constitute a source of saving in the economy.