Market Power and the Power Market: Multi-Unit Bidding and (In)Efficiency in Electricity Auctions

In this paper we apply auction theory to the modelling of competition in a multi-unit wholesale electricity market. Bidding strategies of multi-plant producers are derived and examined assuming various degrees of market concentration. Unlike previous literature, which mainly focuses on demand uncertainty, we assume both demand and cost uncertainty as well as cost differentials among the two types of generating units considered in the model, namely baseload units and peak units. Results indicate that the System Marginal Price (competitive pricing) rule provides incentives for bid shading on the part of all those generators-units who have a non-null probability of setting the market price. We also show that the extent of the bid shading is positively affected by the differential in the endowments of the baseload generation capacity of multi-plant firms. The inefficiency of the resulting allocation is also examined and some policy implications are briefly discussed.     

Ethical Issues in Credit Card Solicitation of College Students – The Responsibilities of Credit Card Issuers,Higher Education,and Students

Credit card companies aggressively solicit college students, without regardfor the consequences of high credit car debt for these customers. Theethical conflict of the sale of easy credit to college students too oftenresults in hazardous outcomes akin to the solicitation of youth by cigarettecompanies. This paper will investigate the dangers that credit card use presents to theyoung customer, the unethical manner in which the companies that issue these cards promote their products to this audience, and the role of institutions of higher education. A majority of students are not only using credit unwisely (average balances of over $1000 regardless of who reports the data) but are payingexorbitant interest (18%–22%). The credit card companies call this``responsible' use. They are collecting enough interest and fees to morethan cover losses resulting from bankruptcy. They use a variety ofmarketing techniques to lure college students – glitzy `MTV' type shows,free prizes and gifts, special interest rate offers, and now they can pretendthrough `educational services' to explain to college students why credit cards are important.This paper investigates the ethical considerations of credit card solicitationof college students as a result of research into factors that influence thenumber of credit cards held by these students. Current solicitation policiesof colleges and universities are also presented.     

State-society relations and national development: a comparison of Argentina and Taiwan in the 1990s

Research on national development in developing and newly industrializing countries (NICs) has focused on issues of economic growth and social change independent of each other, without paying much attention to the way the two elements relate to each other and to the conditions that could lead to their simultaneous occurrence. This paper argues that explanations of how economic growth with — or without —‘positive social change’ can occur require attention to changing state-society relations. This research investigates the cases of Argentina and Taiwan, where economic growth in the 1990s has not translated into positive social change. By analyzing changing state-society relations, this research shows that relations of power within societies have a clear effect on national development; it also reveals how different social actors may be able to influence a state’s developmental strategies. This paper re-evaluates traditional views of the state and society in Argentina and Taiwan by examining the fluctuating composition of the societal base of the state and the changing relations between the state and its societal coalition. The analysis reveals the processes under which economic growth without social change is occurring in both countries, and provides general insights into the way dynamic state-society relations can influence national development in other contexts. — La recherche sur le développement national des pays en voie de développement et les pays nouvellement industrialisés a exploré les questions de croissance économique et de changement social séparément, sans s’occuper du rapport entre les deux et des conditions qui pourraiemt mener à leur occurrence simultanée. Cet article soutient qu’une explication de la croissance industrielle, avec ou sans ‘changements sociaux positifs’, demande que l’on prête attention aux relations changeantes entre l’état et la société. Cet article examine les cas d’étude de l’Argentine et de Taï?wan, où la croissance économique n’a pas apporté de changements sociaux positifs. En analysant les relations changeantes de l’état et de la société, cette étude démontre que les relations de pouvoir à l’intérieur des sociétés ont un effet manifeste sur le développement national; elle révèle aussi comment les différents participants sociaux peuvent influencer les stratégies de développement de l’état. Cet article ré-évalue les vues traditionnelles de l’état et de la société en Argentine et à Taïrsquo;?wan en examinant les compositions changeantes de la base sociale de l’état et les relations variables entre l’état et sa coalition sociale. L’analyse révèle les processus par lesquels la croissance économique survient sans changement social dans les deux pays et offre un aperçu général de la façon dont les relations dynamiques entre l’état et la société peuvent influencer le développement national dans d’autres contextes.     

Central Banks' Management of Foreign Exchange Reserves

This paper analyzes whether currency instability results from official reserves management, as central banks strive to minimize risk, keep a degree of liquidity degree, minimize risk, and a good return on their portfolio. In recent years the dollar share in official reserves increased, at the expense of the Deutsche mark and yen. The evidence suggests that movements in the exchange rate exert the only influence on reserve currency shares; the long-term interest rate does not have a significant impact on reserves composition. These results confirm the World Gold Council thesis, according to which central banks, by investing excess reserves in short-terms assets, are believed to have optimized their portfolio return.     

The Impact of Business Education on Moral Judgment Competence: An Empirical Study

Recent highly publicized ethical breaches including those at Enron and WorldCom have focused attention on ethical behavior within the accounting profession. At the heart of the debate is whether ethical attitudes of accountants are to blame. Using a nationally representative sample of accounting practitioners and a multidisciplinary student sample at two Southern United States universities, we compare sample responses to 25 ethically charged vignettes to test whether they differ. Overall, we find no significant difference – even for a specific “accounting tricks” vignette, which resembles the Enron and WorldCom situations. We do find, however, that the practitioners were more accepting of vignettes that involved physical harm (PH) to individuals and those that were legal (but ethically questionable). We postulate that accounting practitioners may apply a legalistic framework to their assessment of the acceptability of each vignette. Focusing on an “accounting tricks” vignette, we also find no significant difference between auditors and institutional practitioners compared to all other types of accountants in the sample. We conclude that ethical attitudes of accounting practitioners do not differ significantly by specialty area. Tisha L. N. Emerson is an Assistant Professor of Economics at Baylor University in Texas. In addition to business ethics, Professor Emerson has published articles in the areas of environmental economics and economic education. She teaches courses in environmental economics, international trade, intermediate microeconomics and microeconomic principles. Stephen J. Conroy is an Associate Professor of Economics at the University of San Diego in California. In addition to business ethics, Professor Conroy has published articles in the areas of economic development and demography, economics of education and economics of aging. He teaches courses in managerial economics at both the graduate and undergraduate level, as well as undergraduate courses in urban and regional economic development, intermediate microeconomics and principles of micro- and macroeconomics. Charles W. Stanley is an Associate Professor of Accounting at Baylor University in Texas. In addition to business ethics, Dr. Stanley has published articles in the areas of financial accounting, managerial accounting, auditing, accounting systems, tax, and professional ethics for accountants. He has also authored several on-line continuing education courses for CPAs including one that meets the Texas State Board of Accountancy requirements for continuing education by Texas CPAs. He teaches courses in auditing, ethics, financial accounting and managerial accounting in the MBA program at Baylor.     

Competition for Power and Altruism

The paper analyzes the trade-off between power and altruism by using an experimental framework which involved a group of experimental agents, undergraduate students of the University of Siena. The results show that the introduction into the experimental structure of a tournament for the power appreciably altered the behaviour of agents. More specifically the degree of altruism, measured by the dictator offers, significantly decreased when the agents were able to trade altruism for power. The results were more clear-cut and robust in the case of the dictator game, but also in the case of the ultimatum game the introduction of the tournament for power altered the behavior of subjects. A significant gender effect emerged.     

Out of Welfare: Functioning of Income Support in Torino

This paper explores the opportunities provided by a file of longitudinal data regarding income support benefits for able bodied poor in order to understand the functioning of the local social assistance system in Torino. The features of this system, its selective-categorized character and the differences from universalistic systems are analyzed. In this framework, the duration of the periods users receive benefits has been studied by means of event history analysis. The probability of exit from welfare is related to socio-demographic characteristics of recipients. In particular we observe a lower propensity to exit for female headed households and households with children. The probability of exit appears to be affected also by labour market conditions, being higher when these are more favourable. The exit rate does not decrease as time elapsed in welfare moves on. We observe the existence of different styles of assistance among the different social services within the city. Difficulties related to the interpretation of the empirical results, given the selective-categorized features of the social assistance system, are emphasized. Finally, we discuss some theoretical issues about evaluation of income support policies.All the sections of this paper are the result of the cooperation of the authors. Nicola Negri has coordinated the various steps of the work and has written Section 5 with Contini. Nicoletta Bosco has mainly worked with Nicola Negri to prepare the data archive and has written Sections 2 and 3. Dalit Contini has discussed with Negri and Bosco the model of empirical analysis and has implemented it; she has written Sections 4 and 6. All authors share Section 1 and 7.     

Deregulated Wholesale Electricity Prices in Italy: An Empirical Analysis

In this paper we analyze a time series of daily average prices in the Italian electricity market, which started to operate as a Pool in April 2004. Our objective is to model the high degree of autocorrelation and the multiple seasonalities in electricity prices. We use periodic time series models with GARCH disturbances and leptokurtic distributions and compare their performance with more classical ARMA-GARCH processes. The within-year seasonal variation is modelled using the low-frequency components of physical quantities, which are very regular throughout the sample. Our results reveal that much of the variability in the price series is explained by the interactions between deterministic multiple seasonalities. Periodic AR-GARCH models seem to perform quite well in mimicking the features of the stochastic part of the price process.