Search results for "microeconomics"

CONSUMPTION DECISIONS WITH INCOME UNCERTAINTY AND A KINKED BUDGET CONSTRAINT

1986

A Simple Operating Strategy of Small-Scale Battery Energy Storages for Energy Arbitrage under Dynamic Pricing Tariffs

2015

Price arbitrage involves taking advantage of an electricity price difference, storing electricity during low-prices times, and selling it back to the grid during high-prices periods. This strategy can be exploited by customers in presence of dynamic pricing schemes, such as hourly electricity prices, where the customer electricity cost may vary at any hour of day, and power consumption can be managed in a more flexible and economical manner, taking advantage of the price differential. Instead of modifying their energy consumption, customers can install storage systems to reduce their electricity bill, shifting the energy consumption from on-peak to off-peak hours. This paper develops a deta…

Incentive systems for risky investment decisions under unknown preferences

2017

Abstract Our paper examines how to design incentive systems for managers making multi-period risky investment decisions. We show how compensation functions and performance measures must be designed to ensure that managers implement the expected value-maximizing set of projects. The Relative Benefit Cost Allocation (RBCA) Scheme 1 and its extensions revealed in literature on unknown time preferences generally fail to do so under unknown time and risk preferences. We illustrate that when coping with such unknown preferences in a risky setting, a specific state-dependent allocation rule is required. We introduce such an allocation scheme, which we refer to as the State-Contingent RBCA Scheme, …

Economic reasoning and creative industries progress

2017

ABSTRACTThis article offers a theoretical discussion on how major neoclassical economic theory assumptions blur the understanding of creative industries. By distinguishing between creative-rational and creative-intuitive industries, with different compositions of commercial and cultural attributes, we particularly show how the latter sector has characteristics and dynamics that are incompatible with a theory based on preference rationality, profit maximisation and equal access to information among actors. When customer utility is composed of economic, as well as aesthetic, spiritual, social, historical, symbolic and authenticity values, then all these will affect customers' willingness to p…

Ein Ansatz zur Erklärung der Kundenbindung auf Basis der Theorie des geplanten Verhaltens

2005

Traditional customer satisfaction and customer retention models are extended by integrating variables such as perceived action control or social norm. These constructs are suggested by the attitude theory as well as the theory of planned behaviour. The extended model is tested in an empirical study carried out in the movie theatre industry. The model provides an excellent explanation of customer retention, which is the target variable in the study. Implications are derived for satisfaction managers which focus on the social group when approaching a specific customer. Finally, an outline for further theoretical and empirical studies is given as well as some limitations of the proposed model.

Morphological similarities between DBM and a microeconomic model of sprawl

2010

JEL classification : C61; C63; D62; R21; R40; International audience; We present a model that simulates the growth of a metropolitan area on a 2D lattice. The model is dynamic and based on microeconomics. Households show preferences for nearby open spaces and neighbourhood density. They compete on the land market. They travel along a road network to access the CBD. A planner ensures the connectedness and maintenance of the road network. The spatial pattern of houses, green spaces and road network self-organises, emerging from agents individualistic decisions. We perform several simulations and vary residential preferences. Our results show morphologies and transition phases that are similar…

A Partial Equilibrium Model of Option Markets

2000

This paper addresses the questions who is buying and who is selling options on a stock, the optimal position to hold, and how this affects the price. The individual demand functions and the equilibrium allocation are derived using an asymptotically valid expansion. Trading occurs only at discrete dates; the option does not have to complete the market. The paper also discusses the conditions under which trade results, the importance of heterogeneity for trade, when preferences become irrelevant to price options, and the case in which there is only a spanning demand, but no risk-sharing demand in options.

The UN in the Lab

2013

We consider two alternatives to inaction for governments combating terrorism, which we term Deterrence and Prevention. Deterrence – investing in resources that reduce the impact of an attack – generates a negative externality to other governments, making their countries a more attractive objective for terrorists, while Prevention – investing in resources that reduce the ability of the terrorist organization to mount an attack – creates a positive externality by reducing the overall threat of terrorism for all. Due to the structure of this interaction, countries can benefit from coordination of policy choices, and international institutions (such as the UN) can be utilized to facilitate coor…

An evolutionary model of voting

2001

Collective allocation of resources that takes place in po- litical markets is characterized by the complex exchange that emerges among the individuals involved. Traditional Public Choice models de- part from individual rational choice in a setup in which many of its strict requirements need not hold. This paper introduces a model of social interaction among agents in a simple political market which de- parts from bounded rationality and evolutionary dynamics as the key mechanisms that drive individual behavior. Learning plays a signicant role as it allows to establish an individual link between decisions and collective outcomes. The model is that of a representative democracy with two parti…

Modelling mode choice for freight transport using advanced choice experiments

2015

Abstract In this paper we use advanced choice modelling techniques to analyse demand for freight transport in a context of modal choice. To this end, a stated preference (SP) survey was conducted in order to estimate freight shipper preferences for the main attributes that define the service offered by the different transport modes. From a methodological point of view, we focus on two critical issues in the construction of efficient choice experiments. Firstly, in obtaining good quality prior information about the parameters; and secondly, in the improved quality of the experimental data by tailoring a specific efficient design for every respondent in the sample. With these data, different …