Complete Market Research Articles

Requisites for Development of a Regulated Secondary Market in Digital Assets

The component parts of a more complete market system in digital assets are steadily being assembled. The initial focus on the primary market has increasingly expanded to the secondary market. Cryptoexchanges are a particular subject of interest given their growing predominance and the exchange-like or intermediary-like roles they may undertake at various times. This paper considers the pathway issues for the development of a regulated secondary market in digital assets. It explores the conditions necessary to develop a regulatory framework that does not also serve to reshape and confine the possibilities offered by cryptographic consensus technology. To achieve core regulatory objectives, what regulation attaches to will need to be sensitive to the characteristics of different centralized and decentralized cryptoexchange models as well as the digital assets traded on them. The problem of establishing accountability and anchoring locus in relation to decentralized cryptoexchanges is considered. How the common characteristics of digital assets impact on the ability to develop secondary market regulation that meaningfully meets policy objectives is reviewed. The potentially discriminating effect of imposing regulatory oversight on an industry in which different models of operation are still emerging must be carefully weighed. It is suggested that development of the regulatory framework should be model-neutral, form-independent and remain focused on the oversight of functions and establishing accountability for wrongdoing. Regulation should not be prematurely imposed in a manner that may inhibit the ability of private market regulation to develop effective outcomes that align with public policy concerns. Any development of regulatory oversight must also contemplate the involvement of intermediaries providing services specific to digital assets as well as intermediaries already involved in traditional markets. It is proposed that it is necessary to cease looking at the regulation of exchange systems and intermediary conduct in isolation from the characteristics of digital assets. There is a clear prospect for a more fundamental interaction between secondary market activity and the asset design process that could better facilitate the formation of regulatory building blocks. This depends on the development of an effective public-private partnership.

Market of meat production: state, prospects of development

The discrepancy in price trends, the severe competition in the meat cattle market has affected shortened meat supplies and the supply of beef to the prices was reflected in the overall assessment of the circulation of these products in the market and statistics of the industry, in particular. Therefore, there is a situation where the supply is market in the range. The decrease in demand for meat products in connection with its increase in not balanced to demand. What causes this to happen? The analysis shows that in the development of meat cattle, a problematic situation associated with trends in socioeconomic life has occurred: low purchasing power of the population; rise in energy prices; an unequal exchange between processing enterprises and agriculture. Does not stimulate the development of the credit and tax system. This, in turn, led to a reduction in the number of animals, correspondingly a decrease in the volume of production of meat and meat products, and as a result, the level of consumption of products of the meat industry is lower than rational. As for meat cattle breeding, it should be noted that the industry has its own characteristics, not only technological but also economic ones. And if you look at the trends in the industry, the presence of its products in the market, then it would be justified and payback to work out a program of long-term development and market approval of meat cattle breeding products. What sequence of actions should help to solve perspective directions of development of the industry and its presence on the market of products? Where to start? An analysis of industry development suggests that such priority actions should be considered:
 
 substantiation of the number of livestock;
 analysis of animal productivity at different levels of feeding and production of beef;
 the correspondence of beef production to the processing capacity of raw materials;
 formation of volumes of market proposals for manufactured products;
 substantiation of the breakeven rate of meat cattle, taking into account the costs of production;
 аccording to market research data - the formation of demand in the meat products market;
 development of competitive principles, analysis of the participation of competitors in the market, studying the demand for products of the enterprise.
 
 It should be noted that during the years of Ukraine's independence, a number of important steps have been taken to reform the agro-industrial complex, however, in this important work, the formation of a modern market environment for meat cattle-breeding, in particular the formation of a complete market infrastructure, has not yet been completed in this important work. An important task is to improve the system of relations between the services of the marketing line – from the commodity producer to the consumer of products. Of course, the implementation of state incentives for beef production, as well as opportunities for increasing the purchasing power of the population, remains topical. Detected inconsistencies in the activities of meat market operators need to deepen research aimed at eliminating them, which will improve the actual state and improve the functioning of the market products industry.

(Invited) 100MW-class vanadium flow battery projects in different applications in China

Vanadium flow battery (hereafter referred as VFB) is one of the most suitable energy storage systems (hereafter referred as ESS) for grid-connected renewable power. And the inherent capitalization potential will improve its commercialization further in the coming future as well. However, comparing to other popular energy storage technology, VRB technology is still lack of experience on large-scale application in different situation. As the Guideline to Promote Energy Storage System Technology and Industrial Development (the Guideline) issued by five ministries of China (Reform Commission, Ministry of Finance, Ministry of Science and Technology, Ministry of Industry and Information Technology, National Energy Administration) in October 2017 mentioned clearly one of the key commercialized technology should be 100MW VRB-ESS power station, there is several important large-scale flow battery projects promoted in China in 2018, such as 100MW/500MWh peak plant in Hubei, 200MW / 800MWh renewables integration in Liaoning, 200MW / 1,000MWh offshore wind integration in Jiangsu and renewable power integration in Qinghai. Some of the confirmed projects is listed in the following figure. Figure 1. China’s vanadium flow battery energy storage projects development plan Several provinces in south coastal area of China, such as Jiangsu, ESS is for peak shifting and arbitrage application as the urgent need of flexible/ Independent peak plants to support the summit power demand in summer. The 100MW/500MWh peak plant in Hubei is mostly to support power requirement of industrial parks. While Qinghai province is the most active place for renewable energy developing and requires large-scale ESS to support grid connection. VRB Energy has got involved closely in most of these projects, and looking forward to share experience and future prospects accordingly. VRB Energy Operations (Beijing) Co. Ltd., used to known as Pu Neng, the supplier of the 2MW/8MWh VRB-ESS State Grid demonstration site in Zhangbei, Zhangjiakou, China, and 3MW/12MWh VRB-ESS in Zaoyang, Hubei, China. The 3MW/12MWh VRB-ESS in Zaoyang has commissioned in Oct 2018, and provided a technical foundation for the coming 100MW/500MWh project in Hubei. VRB Energy has followed up the 200MW / 1,000MWh offshore wind integration in Jiangsu and wind integration projects in Qinghai closely. Some of the projects are most likely to start construction in 2019. Additionally, National Development and Reform Commission, state grid, and National Energy Committee issued the ESS price policy to support the ESS development in China. The policy includes increase the power price gap between peak time and off peak time, tax refund, and reward to the ESS project which can provide the good service to state grid, etc. With economic support and practical large-scale projects, the Chinese power market is expected to form a completed market mechanism in the near future.

Editorial Comment

We commend the authors on their recent publication on trends in BCG utilization during periods of temporary supply shortages. Notably, the study compares the periods 2004-2012 versus 2013-2015, which does not include the most recent announcement in 2016 by Sanofi to exit the market completely. This begs the question: if temporary shortages decrease utilization growth by half, then what will be the impact of a complete market exit?

Author Reply

We appreciate the authors’ insightful commentary on our recent study examining trends in BCG utilization during national supply shortages. We agree that the impact of even just temporary supply interruptions on BCG utilization is impressive. Certainly, exploring the impact of Sanofi's recent complete market exit is a worthwhile endeavor. However, due to a requisite time lag to allow maturation of data in the NCDB and other large administrative and population-based datasets, a more contemporary analysis is not yet feasible. Thus, while we anticipate that the recent cessation of BCG production by Sanofi may have profound effects on BCG treatment patterns, the necessary data to empirically study this question is not yet available. For this reason, we elected instead to explore the impacts of prior BCG supply interruptions, in hopes that prior trends might inform the current discourse about ongoing BCG supply shortages.

Optimal Consumption and Investment Problem Incorporating Housing and Life Insurance Decisions: The Continuous Time Case

AbstractThis study considers the optimal consumption‐investment‐insurance problem incorporating housing decisions of a household when interest rates and labor income are stochastic. Under the complete market assumption, we derive the closed‐form solution of the optimal insurance demand, portfolio choice, and housing consumption. We calibrate the model using data from the financial market of Taiwan. We find that the insurer's pricing strategy has a significant impact on the household's consumption pattern. Specifically, additional loading in insurance premium allows the life‐cycle model to produce hump‐shaped consumptions of both perishable goods and housing. Loading also creates an unfair background risk to households. However, we only find a small portfolio risk reduction, because households optimally choose a large coverage to mitigate the mortality exposure. This suggests empirical background risk studies overestimate the risk reduction when insurance is available.

Mean-risk portfolio management with bankruptcy prohibition

In accordance with Solvency II, the commonly tightened government regulation on insurance cooperations, they have been obligated to take conservative investment strategies such as those ruling out the possibility of bankruptcy. With this in mind, in this article, we aim to continue our work (Wong et al., 2017a,b) . First, we study the solvability of mean-risk portfolio optimization problem with bankruptcy prohibition, in the complete market in which the investor aims to maximize the expected payoff and to minimize the deviation risk simultaneously, which is of great use in the insurance paradigm. Secondly, we also provide the original weak convergence result of the optimal terminal wealth of a sequence of approximate markets to that of the limiting market through their corresponding pricing kernels. As a result, we establish an effective numerical algorithm calibrating the optimal terminal wealth under Black–Scholes models by that of binomial tree models. The results of our numerical simulations indicate that the downside risk of the optimal payoff can be effectively reduced by imposing the bankruptcy prohibition.

A Pricing Formula for Delayed Claims: Appreciating the Past to Value the Future

We consider the valuation of contingent claims with delayed dynamics in a Black \& Scholes complete market model. We find a pricing formula that can be decomposed into terms reflecting the market values of the past and the present, showing how the valuation of future cashflows cannot abstract away from the contribution of the past. As a practical application, we provide an explicit expression for the market value of human capital in a setting with wage rigidity.

On the Micro-Level Irrelevance of Habit Formation in Complete Markets

On the Micro-Level Irrelevance of Habit Formation in Complete Markets

Shaping Business Process Agility in Telecommunication 4.0

ABSTRACT The study elaborates the relationship between antecedents and implication of business process agility on the business performance of telecommunication equipment companies in Indonesia. Diverges from prior studies on organizational agility, the study identifies that a complete market orientation of integrated product development (IPD) implementation maximizes organization’s responsiveness toward the dynamics of customers’ requirements and competitors’ activities. Furthermore, exploratory case studies find that as Telecommunication 4.0 brings up new challenges and complexities created by open innovation and hardware-software decoupling, organizations need to leverage networking with partners and exploit organizational structure nimbleness to gain optimal product development capability. The conceptual framework is formed from both the exploratory case studies and systematic literature review. The case studies enable us to gain state-of-the-art views from practitioners in the industry, clarify the fuzziness and broad nature of antecedents, and integrate them into existing theories to acquire managerial insight. Aligned with market-based and dynamic capability theory, the originality of this study lies on how organizations exploit not only internal resource flexibility, but also how to access, configure, and leverage external network capabilities embedded in business partners.

Теорiя дуальностi для не увiгнутих функцiй корисностi за умов невизначеностi моделi

The main goal for this paper is to study the robust utility maximization functional, i.e. sup_{X\in\Xi(x)} inf_{Q\in\mathsf{Q}} E_Q [U(X_T)]; of the terminal wealth in complete market models, when the investor is uncertain about the underlying probabilistic model and averse against both risk and model uncertainty. In the previous literature, this problem was studied for strictly concave utility functions and we extended existing results for non-concave utility functions by considering their concavization.

Spatial Market Integration of Shallot in Indonesia

Shallot is a horticultural commodity which has high economic and strategic values. Unbalanced supply and demand of shallot each province in Indonesia cause trade flows from surplus areas to deficit areas and indicate there is a market integration. This research aimed to analyze spatial market integration of shallot at the producer level in Indonesia. Methods of this research used included Johansen Co-integration, Granger Causality, and Error Correction Model. Results of this research exhibit that there is no complete spatial market integration among shallot producer markets. There are approximately 40 co-integrated pairs of producer markets (44.944%), and the rest of 49 (55.056%) pairs of producer markets are not co-integrated. Based on the causality test, the producer markets such as Central Java, East Java, and West Nusa Tenggara are price-leading markets. Approximately 74 pairs (83,146%) of producer markets are integrated into the short run. Government policy that can be implemented to control price fluctuations at producer level is fairly floor price policy specifically made for three price-leading markets. To improve spatial market integration of shallot in Indonesia, the government needs to make policies such as upgrading quality of physical infrastructure (length of paved roads) and educating human capital (producers) to access market information technology. Keywords: producer market, shallot, spatial market integration, Johansen Co-integration, Granger Causality

When Faced with Income and Asset Shocks, Do Poor Rural Households in Vietnam Smooth Food Consumption or Assets?

Vietnamese rural households are exposed to severe covariate and idiosyncratic shocks. However, these households are remarkably resilient and have steadily increased real income and consumption over the survey period 2006 to 2012. To explain household strategies to cope with shocks we test three theoretical models: the Permanent Income Hypothesis (PIH), Complete Market Hypothesis (CMH), and Asset Smoothing Theory (AST). There is support for AST as households smooth productive assets rather than consumption; and for CMH as households smooth consumption against idiosyncratic, but not covariate shocks. There is no support for PIH.

A Dynamic Mean-Variance Analysis for Log Returns

We propose a dynamic portfolio choice model with the mean-variance criterion for log-returns. The model yields time-consistent portfolio policies and is analytically tractable even under some incomplete market settings. The portfolio policies conform with conventional investment wisdom (e.g. richer people should invest more absolute amount of money in risky assets; the longer investment time horizon, the more proportional amount of money should be invested in risky assets; and for long-term investment, people should not short sell major stock indices whose returns are higher than the risk-free rate), and the model provides a direct link with the CRRA utility maximization in a complete market.

How Does Asymmetric Information Create Market Incompleteness?

The aim of this work is to show that incompleteness is due in general not only to a lack of assets, but also to a lack of information. In this paper we present a simple inuence model where the inuencial agent has access to additional information. This leads to the construction of two models, a complete model and an incomplete model where the only dierence is a dierence of information. This leads to a simple model of incomplete market where the number of assets is not the cause of incompleteness: incomplete information is the explanation. Keywords Information · asymmetric information · option pricing · martin-gales · insider trading · complete market · incomplete market AMS Classication (2000): 60H10, 60G44, 60H07, 60J75, 91G20, 91B70, 93E11. JEL Classication: C60,G11,G14.

Financial complexity and trade

What are the implications on trading activity if investors are not sophisticated enough to understand and evaluate trades that have a complex payoff structure? Can frictions generated by this type of financial complexity be so severe that they lead to a complete market freeze, like that of the recent financial crisis? Starting from an allocation that is not Pareto optimal, we find that whether complexity impedes trade depends on how investors perceive risk and uncertainty. For smooth convex preferences, such as subjective expected utility, complexity cannot halt trade, even in the extreme case where each investor is so unsophisticated that he can only trade up to one Arrow–Debreu security, without being able to combine two or more in order to construct a complex trade. However, for non-smooth preferences, which allow for kinked indifference curves, such as maxmin expected utility, complexity can completely shut down trade.

Quantum Entropy and Accounting

In a previous paper we establish the equality between accounting numbers and information in a classical Arrow-Debreu economy. One of the conditions is complete market, that is, there exists an Arrow-Debreu security for every possible state realization. In this paper, we relax this condition and establish the equality between accounting numbers and information by exploring quantum information and measurement mathematics. In the revised domain expanded relationship, von Neumann entropy replaces Shannon entropy to capture the information effect.

Public Bequests as a Pension Scheme

Governments have phased out pay-as-you-go pension schemes in favor of funded ones. Instead of dropping the intergenerational transfers of the pay-as-you-go pensions, we propose to invert them. In this way, resources would flow from old to young generations as if it were a system of public bequests. We show that the public bequests scheme implements the complete market allocation of human capital investments when credit markets to finance education are missing or imperfect. We also simulate the model and compare the economic effects of the different pension schemes.

The economic effects of renewable energy expansion in the electricity sector: A CGE analysis for Malaysia

Electricity is a critical factor in developing a robust and modern economy and for improving the quality of life. In Malaysia, the electricity sector benefits from heavy subsidies to its gas inputs. Such economic interventions disrupt price mechanisms and result in inefficient resource allocations, over-consumption of electricity, CO2 emissions, and government budget deficits. Under the Tenth Malaysia Plan price controls and subsidies have been rationalized to achieve complete market pricing. In addition, in consideration of climate change issues, environmental concerns, and strengthening energy supply security through diversification, the government encourages the use of renewable energy for electricity production through the Feed-in-Tariff (FiT) strategy. This study employs a Computable General Equilibrium (CGE) model to examine the potential impacts of gas subsidy reform in the power sector and on the Malaysian economy. The model evaluates and compares the impacts of two methods of providing funds for encouraging the development of renewable energy production, reallocating revenues from gas subsidy removal, and remunerating the FiT mechanism. The simulation results show that reducing gas subsidies without recycling the revenues gained decreases electricity demand and emissions significantly while having only minimal negative effects on macroeconomic variables. The results indicate that utilizing a recycling plan in which additional revenues from subsidy reforms are re-allocated to finance the FiT framework contributes significantly to the production of renewable energies within the power generation sector in Malaysia.

Robust Portfolio Choice and Consumption with Derivative Trading Under Stochastic Volatility and Jumps

This paper analyzes the optimal consumption and portfolio choice problem for an ambiguity averse investor who has access to the stock and derivatives markets with recursive preferences. The stock process follows a stochastic volatility jump-diffusion model and the investor can have different levels of ambiguity about diffusion risks and the jump risk, respectively. We obtain an analytical solution which is exact when the investor has unit elasticity of intertemporal substitution of consumption, and approximate otherwise. We find that optimal exposures to diffusion risks and to the jump risk are significantly affected by the ambiguity aversion about the corresponding risk factors in the complete market. However, the optimal stock investment is insensitive to the ambiguity aversion about the jump risk in the incomplete market. We also find that considering ambiguity aversion with respect to diffusion risks and participating in the derivatives markets are essential to reduce the potential welfare loss, while the impact of ignoring the jump ambiguity is negligible.