Discriminatory Price Auctions in Electricity Markets: Low Volatility at the Expense of High Price Levels

A pay-as-offered or discriminatory price auction (DPA) has been proposed to solve the problem of inflated and volatile wholesale electricity prices. Using the experimental method we compare the DPA with a uniform price auction (UPA), strictly controlling for unilateral market power. We find that a DPA indeed substantially reduces price volatility. However, in a no market power design, prices in a DPA converge to the high prices of a uniform price auction with structural market power. That is, the DPA in a no market power environment is as anti-competitive as a UPA with structurally introduced market power.     

Method in Experiment: Rhetoric and Reality

The methodological ideal of experimentalists, E, is easily stated: derive a testable hypothesis, H, from a well-specified theory, T; implement experiments with a design; implicitly in the latter are auxiliary hypotheses, A, that surface in the review/discussion of completed research reports (payoffs are 'adequate,' Ss are 'relevant,' instructions, context are 'clear,' etc.). We want to be able to conclude, if statistical test outcomes support not-H, that T is 'falsified.' But this is not what we do; rather we ask if there is a flaw in the test, i.e. not-A is supported, and we do more experiments. This is good practice—much better than the statistical rhetoric of falsificationism. Undesigned social processes allow E to accumulate technical and instrumental knowledge that drive the reduction of experimental error and constitute a more coherent methodology than falsificationism.     

ADVERSE SELECTION IN ELECTRONIC MARKETS: EVIDENCE FROM ONLINE STAMP AUCTIONS

We analyze adverse selection costs in online stamp auctions, based on a comparison of prices on eBay with those of matched stamps at a specialty stamps auction site in the U.S., Michael Rogers, Inc. (MR), which we know a priori has low quality uncertainty. We find that buyer prices are 10–15% lower on eBay as compared to MR, and the price difference, increases with the value of the stamps. Consistent with this adverse selection discount we find that the seller reputation mechanism on eBay has an economically modest, although statistically significant, effect on auction price and probability of sale.     

A theoretical framework for the studio as a learning environment

In this article we describe a holistic, ecological framework that takes into account the surface structures and pedagogical approaches in the studio and how these elements are connected to the construction of design knowledge: epistemology. In our development of this framework, we came to understand how disciplinary underpinnings and academic culture shape the ways that studio is enacted. Using practice theory, we illustrate our framework with two examples—one in Industrial Design and another in Human Computer Interaction—that demonstrate the ways in which the studio can act as a bridge between academic and professional communities. We came to see the studio as a unique practice community that connects academic and professional contexts. We argue that successful implementation of studio-based learning involves an awareness of disciplinary canons, ontological approaches to knowledge, and the academic constraints on studio-based approaches to learning.     

Using Laboratory Experiments in Logistics and Supply Chain Research

Laboratory experiments provide an underutilized methodology for subjecting research in logistics and supply chain management to rigorous scientific scrutiny. As discussed in this paper, by following established procedures researchers can create an economic system in which behavior can be observed and replicated. With the ability to control the institution and the environment, researchers have complete information and can exogenously manipulate treatment variables, neither of which may be feasible in field work. We also address many of the reservations that skeptics of laboratory experiments often express including issues of realism, participant sophistication, and payoff stakes. We then provide several examples where experiments have been used to study issues relevant to logistics and supply chain management including auctions, wholesale practices in gasoline markets, inventory replenishment, liberalization of the electric power industry, and deregulation of the natural gas markets. Finally, we identify several additional areas where laboratory experiments could be informative.     

Report: EMCRA — The chemical division of EVAF

It is editorial policy to encourage officials, of the European Association for Industrial Marketing Research (EVAF), to write occasional articles on the activities of EVAF. In this article Mr. J. W. Vernon, Chairman (UK) of the European Chemical Marketing Research Association (ECMRA), has written a refreshingly frank “history”, and discussed the promising future plans, of the Chemical Division of EVAF.