Market Agents Research Articles

Local reactive power management using solar pumping in isolated electrical systems

In this work, a new analysis of the solar pumping as a source to provide secondary regulation and local reactive management strategies into low-voltage grid, is addressed. Based on real generation data and the capabilities of a commercial solar inverter, the control and management of the different work modes of the power electronics is proposed to analyse the viability of the use of solar pumping systems to be active agents in the flexibility market. Finally, some regulatory issues are presented to evaluate the feasibility of this proposal.

“The Value of a Statistical Life” in Economics, Law, and Policy: Reflections from the Pandemic

Mitigation policies during the COVID-19 pandemic were justified on benefit-cost-analysis (BCA) grounds, with the value of a statistical life (VSL) measuring the benefit of saving lives. This essay argues that a BCA and VSL framework is not a value-neutral basis for pandemic policy: first because the characterization of labor-market behavior as choices merely regarding money and risk of mortality implicitly endorses those institutions that constrain such choices, as illustrated by pandemic economic conditions; and second because this characterization assumes that individual subjects have exogenous preferences, and accordingly have one “true” valuation, thus ignoring how subjectivity is constituted by capitalist institutions. Such VSL estimates in pandemic scholarship illustrate the search for a single valuation regarding elderly life, whereas the “good” of human life warrants valuation in our capacity as citizens in democratic institutions rather than as market agents. The language of overdetermination highlights the contradictory effects of the mutual constitution of institutions and the individual subject.

Incerteza política e gerenciamento de resultados: Evidências de países da América Latina

Abstract Purpose: This article aims to examine whether political uncertainty affects the accounting choices of firms’ managers in the sense of practicing earnings management through discretionary accruals. Originality/value: The research is original for providing evidence on the direction of earnings management practice following periods of political uncertainty and considering emerging countries in Latin America. The study helps signal to capital market agents in those countries the impact of political uncertainty on the quality of accounting aggregates. Design/methodology/approach: The final sample comprised 352 firms (3,005 observations-year), considering the period 1998-2018. Political uncertainty was a proxy for the countries’ presidential election years. At the same time, earnings management was captured by discretionary accruals estimated according to the Jones’ model (1991) modified by Dechow et al. (2012). Multiple linear regression with estimation by System Generalized Method of Moments (Sys-GMM) guided the tests. Findings: It was found that presidential election periods are associated with managers’ decisions to increase earnings by positive discretionary accruals, allowing us to infer that political uncertainty impacts managers’ accounting choices regarding earnings management. The results proved to be robust to different test alternatives. The findings have practical implications for agents who use accounting information as an informational signal in their decisions, whether from the perspective of investors (current shareholders or potential shareholders) or the perspective of other stakeholders associated with the firm (employees, suppliers etc.).

АГЕНТНЕ МОДЕЛЮВАННЯ ПРИЙНЯТТЯ РІШЕНЬ НА ФІНАНСОВИХ РИНКАХ

The work deals with the topical issue of researching the behavior of financial market agents and identifying the motives of participants in unstable, extremely risky and practically unmanaged markets in the modern conditions of their functioning. This article presents the principles of creating financial models, defines the principles of decision-making in financial markets, and analyzes the impact of herd behavior on decision-making. In the work, the concept of agent modeling of decision-making in financial markets is built, mathematical and statistical models, multi-agent systems, models of decisionmaking in financial markets are considered. The available tools for the development and implementation of simulation agent models were analyzed and a simulation agent model of decision-making in the financial market was developed in the AnyLogic Professional modeling environment, with the aim of analyzing the influence of agent behavior on the dynamics of prices in the stock market. Based on a reflexive approach to the analysis of the stock market, within the framework of this work, situations of decision-making by agents regarding the purchase or sale of securities on the virtual stock market were simulated using the Ising model – modeling the impact of different levels of the herding coefficient on the stock market. In the process of modeling, the set goals and objectives were achieved, namely: determination of the principles of functioning and structure of the stock market; the influence of information value on the efficiency of the stock market was investigated; the process of emergence of bubbles on the stock market is investigated. As a result of the computer experiments carried out as part of this work, two virtual stock markets were investigated – a virtual stock market with the number of 1000 agents and the presence of intuitive agents, and a dynamic virtual market with agents under the influence of authoritative agents. So, the scientific article considers methodological approaches to the analysis of decision-making by agents in financial markets and modeling of decision-making processes by economic agents based on the agent model of group behavior, which allows to identify the presence of herd behavior in the actions of agents and to form management measures to coordinate the decision-making process.

Green marketing and territorial branding as a regional identity economy element

The aim of the study is to substantiate the idea of developing the identity economy of the socio-economic territorial system on the basis of adapting the classical marketing concept “4P” to territorial marketing taking into account the principles of green marketing. The study is based on the following methodological approaches: institutional and behavioral approaches to the identity economy, the integrated approach and the principle of complementarity, which involves the analysis of the organizational structure of the object, accounting for internal and external interactions, the practice-oriented approach, which involves solving the problems of improving the investment attractiveness, image of territories, the formation of their identity as socio-ecological economic systems. The authors propose to consider territorial marketing as a strategic tool for managing socio-economic and environmental components of the territorial system. Territory identity economy acts as a relationship of market agents who identify their needs and interests with the consumer properties of the given territory. The stages of territorial green marketing strategy are developed. An important direction of marketing activity is branding, which includes the development of communication strategy for forming the image of the territory. The authors substantiate the algorithm of territorial brand formation, which consists of four stages: socio-economic analysis of the territory, development of the brand concept, visual representation of the brand, creation of the brand management structure.

Impacts of COVID-19 on Livestock Production in Sudur Paschim Province of Nepal: Assessing Government Interventions and Lessons Learned

This study examines the influence of COVID-19 pandemic on livestock sectors in Sudur Paschim Province (far western province) of Nepal with a focus on the government's response. Analyzing provincial interventions in the livestock sector, we present findings from a primary survey and interviews with livestock farmers, agri-business traders, market agents, and key stakeholders across Kanchanpur, Kailali, Doti, and Achham districts. These districts represent the diverse agro-climatic conditions of far western Nepal. Using mixed methods, we combine qualitative and quantitative data to analyze the impact on livelihoods, business performances, employment, and income for livestock farmers and traders compared to the pre-pandemic scenario of 2019. The pandemic significantly disrupted the livestock and fresh meat production system due to supply chain disruptions, affecting all stakeholders – farmers, producers, suppliers, traders, agro-businesses, and consumers. The repercussions varied among these actors. Dairy farmers experienced a 50-60 percentage income loss, while poultry farmers had to sell birds at half price. The dairy, poultry, and fish sub-sectors were particularly hard-hit. Despite government support, assistance primarily reached well-off farmers and larger businesses rather than smallholders. This study not only underscores lessons learned for Nepal in managing the pandemic and similar disasters but also offers insights for other countries in South Asia facing comparable constraints and opportunities. By investigating the pandemic's repercussions and government interventions in Nepal, this research contributes to better preparedness and response strategies for future crises in livestock and agriculture. SAARC J. Agric., 21(2): 217-226 (2023)

A trilevel programming model for the coordination of wholesale and local distribution markets considering GENCOs and proactive customers

Implementing local distribution markets has been pointed out to simultaneously deal with proactive customer bids and coordinate their power dispatch. However, the impacts of such coordination in the transmission system are usually disregarded. Additionally, proposals that aim to coordinate the operation of distribution and transmission systems usually regard the distribution system operator as a strategic price-maker in the wholesale market, while other wholesale market agents with similar market power are not. In this paper, we propose a trilevel programming framework in which the wholesale market is modeled in the upper level, the wholesale market agents, namely generation and distribution companies, are characterized in the middle level, and the distribution-connected proactive customers are considered in the lower level. The resulting formulation allows the incorporation of multiple agents in any of the markets without the need to change the solving technique. Furthermore, the energy market clearing processes regard every agent participating in the same market at the same hierarchy. A formulation to enforce uniform energy prices is proposed to overcome the inaccessibility to marginal prices under the proposed framework. Numerical results are presented for a power system composed of distribution and transmission networks with multiple independent agents to validate the proposed approach.

Legality of Agricultural Products Weight Cutting as a Cost of Risk in Trade

Agricultural goods transactions with toke (in Bahasa is known as a traditional market agent) always carry a weight cutting of one to 2 kilograms per bag. Risk reduction is considered a burden to be borne. Therefore, how to study the law in the aspect of risk imposition when transactions occur between plantation farmers and toke in traditional markets. The aim of this research was to examine how weighing is carried out and the recognition of the weight of agricultural products on scales is associated with possible risks that will occur in the future. This research method was qualitative, field research. Data sources were garden sellers/farmers and toke in traditional markets. Data collection through interviews and examination of artifacts. Data analysis technique was qualitative descriptive. The research finding showed that when the agricultural harvest was sold, there was a scale cut of around 2 kg per bag, such as chilies, ginger, corn and so on. The result of reducing the scale in dealing with the risks that will occur with irregular goods. The risk was borne by the farmer/seller, this was suspected and endangers the continuity of the relationship between farmer, toke, retailer towards objects that change naturally. Cutting the weight of the scales was still permitted as long as it was within appropriate limits. Recommendations for cutting the weight of the scales when changing goods and not fixed goods.

Dynamic spillovers in higher moments and jumps across ETFs and economic and financial uncertainty factors in the context of successive shocks

Hedging is a particularly important tool in the Exchange Traded Fund (ETF) markets where market makers seek the best ways to mitigate the uncertainty of their exposures. This study relies on high frequency data to assess the spillover effects among ten US sector ETFs and various economic and financial uncertainty indexes based on realized volatility, realized higher moments as well as jumps under a relatively new spillover framework. Next, a time-varying parameter vector autoregression (TVP-VAR) model is used to examine the dynamic connectedness among ETFs and uncertainty factors volatilities while avoiding the sensitivity of spillover results to the choice of the rolling window. Our results showcase higher total connectedness between the different uncertainty indexes and ETFs, though with varying sensitivities. Notably, skewness and kurtosis can spread from one market to another, especially during times of market turbulence, reflecting the significant spillovers in higher-order moments. Interestingly, the market’s 30-day forward looking expectations of US stock market volatility (VIX) has stronger effect on the US sector equity ETFs than the expected 30-day volatility of returns on oil and gold. This analysis emphasizes the implications and contributions of assessing the spillover in higher-order moments covering volatility, skewness, and kurtosis to portfolio hedging and financial risk management. Overall, the results are of considerable practical interest for economic and market agents who are keen to understand market integration and systemic risk propagation to infer asymmetric or fat tail risk related to extreme or downside/upside risks.

Nash bargaining based integrated energy agent optimal operation strategy considering negotiation pricing for tradable green certificate

Reasonable tradable green certificate (TGC) price is the key to guiding the orderly transaction of market agents. However, there is little literature on the negotiation pricing of green certificates, especially the multi-agent cooperation optimization operation strategy for green certificate negotiation. To improve the enthusiasm for TGC transactions and the low-carbon economy of the system, this paper studies TGC negotiation and cooperative operation among multi-agents of integrated energy. Firstly, under the influence of the supply and demand relationship and renewable energy generation cost on TGC price, a variable TGC price limit model is constructed. Secondly, the TGC-carbon emissions transaction (CET) interaction mechanism is introduced to the endogenous motivation for TGC transactions. Then, a Nash bargaining theory is used to establish an integrated energy multi-agent cooperative game model based on TGC negotiation pricing. Finally, the non-convex nonlinear model is transformed into a subproblem of distributed solution by ADMM principle, and the AS-ADMM algorithm is used to solve it. The example shows that the model proposed in this paper effectively promotes the transaction volume of green certificates between the agents. Compared with the non-cooperative situation, the transaction volume increased by 20.83%, indicating that the agent's enthusiasm for TGC transactions was improved, and the number of transactions exceeded their liability quotas.

THIS IS ME! The Financial Impact of Ad Agency CEOs and CCOs Who Are Women and People of Color in the C-Suite

Abstract: Although there have been many advances for women and people of color in corporate America, their representation in the top management positions, such as chief executive officer (CEO) and chief operating officer (COO), is still scarce. Among the CEO positions in the 2020 S&P 500, there are only four African American chief executives leading the largest 500 companies in the US. The advertising industry parallels corporate America when it comes to race, gender, and diversity in the top echelons of firms. Can these dismal statistics ever change? If given the opportunity, can White women and people of color excel as CEOs in the advertising industry? This study seeks to understand the role of ownership on revenues when diverse c-suite leaders manage multicultural or general market agencies. This work first posits the predictive relationship of private and public (holding company) advertising agency ownership on revenue. Next, the work leverages the theories of economic detour and resource dependence theory to hypothesize that the race or ethnicity of the advertising agency's CEO and agency type (general market or multicultural) are boundary conditions of this relationship. Results demonstrated that publicly-owned advertising agencies predicted increased revenues. This positive relationship was strengthened by multicultural advertising agencies yet inconclusive for advertising agency CEOs of color. CEOs of color perform at relative parity, in terms of revenue, in privately-owned versus publicly-owned advertising agencies. These findings demonstrate a racial and ethnic separation in the advertising industry, where advertising agency CEOs of color are revenue-constrained. Yet, if given the opportunity to excel into the c-suite, CEOs of color and White women can be very successful and make their ad agencies profitable. In closing, the authors discuss policy implications for advertising agency executive hiring practices as well as Diversity, Equity and Inclusion (DEI) efforts and trends.

Hybrid ARMA-GARCH-Neural Networks for intraday strategy exploration in high-frequency trading

The frequency of armed conflicts increased during the last 20 years. The problems of the emergence of military disputes, not only concern social parameters, but also economic and financial dimensions. This study examines the potential impact of global geopolitical events on the stock market prices of the Dow Jones U.S. Aerospace & Defense Index and Foreign Exchange (FOREX) markets movements. We analyse whether defence stocks and exchange rate perform similarly during military incidents or geopolitical crises. We built an Autoregressive Moving Average Model with a Generalized Autoregressive Conditional Heteroskedasticity process (ARMA-GARCH) with the machine learning methods of Neural Networks, Deep Recurrent Convolutional Neural Networks, Deep Neural Decision Trees, Quantum Neural Networks, and Quantum Recurrent Neural Networks, aimed at detecting intraday patterns for forecasting defence stock market and FOREX markets disturbances in a market microstructure framework. The empirical results provide preliminary findings on the foreseeability of market disturbances and small differences are observed before and during geopolitical events. Additionally, we confirm the effectiveness of the hybrid model ARMA-GARCH with the machine learning approaches, being ARMA-GARCH-Quantum Recurrent Neural Network the technique that achieves the best accuracy results. Our work has a large potential impact on investment market agents and portfolio managers, as shocks from geopolitical events could provide a new methodology to support the decision-making process for trading in High-Frequency Trading.

Bringing markets back into economics: On economy wide self - coordination by boundedly rational market agents

Markets, I argue, matter significantly for macroeconomic development. The reason for this strange statement is that policy practice in industrialized market economies is routinely governed by models that ignore the role of markets. Policy makers are therefore at risk of misunderstanding the economic situation and of mismanaging the economy.Some macroeconomic models with sufficient nonlinearities and a production lag, two pioneering articles by Day (1982,1983) demonstrated, exhibit phases of erratic fluctuations (or deterministic chaos). Shortly thereafter Eliasson (1983, 1984) observed the endogenous emergence of similar unpredictable irregularities in simulating a complex, agent based, market self-coordinated economy wide model implemented on Swedish data. The irregularities originated in a failure of markets to coordinate production, employment, and investment decisions as they were pushed excessively by policy to become more efficient. In this agent based model of an Experimentally Organized Economy, called MOSES, progress is governed by a dominant flow of successful business experiments conducted by firms, trailed by a flow of mistaken projects. The coordination of these flows by autonomous market agents was shown to be easily disturbed by external interferences, for instance unwitting policies. Markets, simulation experiments however also showed have great endogenous capacities to restore disturbed order. Large private investment mistakes at the agent level, experiments furthermore indicate, incur only minor social costs if production on the site is promptly terminated, and markets organized to efficiently reallocate resources. Bold private investments should therefore be encouraged, corrections of identified mistakes made without delay, and the efficiency of markets to reallocate resources paid attention to. I conclude that central policy in “Sweden like industrial economies” can only effectively be pursued by taking advantage of the endogenous capacity of functioning markets of effective self-coordination. Coordination failure being created by policy failure masquerading as market failure should be considered before market failure is blamed.

When will an overconfident entrant in the two-sided market do more good than harm?

In business operations, a two-sided platform serves as an intermediary connecting two sets of agents in the two-sided market and new entrants are commonly seen. Due to unfamiliarity with the market, the entrant may be overconfident, i.e., overestimating consumer's utility. In addition, an entrant could bring existing consumers and their attention to the entered business service, which forms a market amplification effect. This study considers the market amplification effect and entrant's overconfidence degree, establishes game-theoretical models for analyzing the results in entry scenario and compares with the monopoly scenario. Three main findings are obtained. First, an overconfident entrant makes both itself and the incumbent overprice, which may explain the increased price of Ele.me and Meituan after the entry of latter. Second, the profit of the entrant is not monotonic, but rather it first increases and then decreases as the overconfidence degree increases. Third, the entrant's overconfidence benefits both the incumbent and entrant when the overconfidence degree is relatively low and the market amplification effect is relatively high. This finding explains why optimistic entrepreneurs are popular in the industry.

Mathematical insights into interval solutions of fuzzy relation inequalities for effective Information resource sharing in business education

To examine the connectivity of educational and business institution networks and assess their resource accessibility, we have employed min-max fuzzy relation systems. This piece aims to delve into the outcomes resulting from various factors within a three-compartmental financial system. The research undergoes the dynamical max-min fuzzy solutions, which are expressed in an interval format. These solutions take into consideration variables such as the price index, interest rate, investment demand, fluctuations, cost per investment derived from saved funds, and the elasticity of market demand within the commercial sector. These variables are essential for comprehending the dynamics of the three-compartment financial system. It is difficult to obtain the entire set of solutions for the max-min fuzzy relation system using only minimal solutions. Some of these systems can be solved using optimized fuzzy relation models for both maximal and minimal solutions. Therefore, by converting the business market's financial system into a max-min fuzzy relation inequality, the strategy presented in this article tries to get the broadest and changing solution fluctuating between minimal and maximal solutions. With this suggested strategy for solving the problem, the limiting upper and lower values within which the given quantities fluctuate are identified. By measuring the breadth of the resulting interval, the range of fluctuation may be identified, giving a thorough insight into the system's behaviour. Due to the potential instability of market agents and their respective influences, fluctuations may occur in the demand, supply, and prices of indices in the financial system. Consequently, presenting the financial system in the format of the widest fuzzy interval solution can provide easily accessible information to the general public by illustrating the max-min fuzzy relation system of financial dynamics, outlining the necessary steps, and including a numerical example.

Can central banks be heard over the sound of gunfire?

AbstractIn this study, we examined the effectiveness of central bank communications during times of significant adverse shocks. Specifically, we examined how the National Bank of Ukraine (NBU) regulated foreign exchange (FX) markets during the Russo‐Ukrainian War in 2022. Data collected from both the black and authorized FX markets suggested that the content of the NBU's announcements significantly impacted FX market agents. Announcements aimed at maintaining a fixed (floating) FX rate prompted an increase (decrease) in the black market premium in cash transactions. Moreover, the NBU's announcements influenced the sale side of foreign currency more than any other aspect, an area where the black market FX traders held near monopolistic power.

Concordance between expectations and preferences of patients and evaluation criteria of the European Medicines Agency

ObjectiveThe European Medicines Agency's marketing authorisation criteria for drugs are reflected in the European Public Assessment Reports. The objective is to describe the expectations and preferences of our onco-hematological outpatients with respect to their oral treatments, and to evaluate the concordance with the results of European Public Assessment Reports. MethodA survey of onco-hematological patients’ expectations and preferences about overall survival and quality of life was developed, with three items: expectations on treatment, preferences of benefit and willingness to receive novel treatments with non-definitive results. European Public Assessment Reports of the indicated drugs were reviewed. Kappa index (κ) was used to assess the agreement between patients’ expectations and preferences respect to the benefit in overall survival and quality of life described in the corresponding European Public Assessment Report. Concordance between willingness of patients to receive novel treatments and European Public Assessment Reports results was evaluated by absolute agreement (Ao). ResultsThere were 29 participants, and 19 different European Public Assessment Reports were consulted. Patients’ expectations about their treatment: 82.1% expected improvement in overall survival and quality of life; the κ value between expectations and results of European Public Assessment Reports was 0.091 (confidence interval 95%: -0.025 to 0.207). Patients’ preferences about benefit of their treatment: 92.6% preferred quality of life; the κ value was 0.016 (confidence interval 95%: -0.127 to 0.160). Willingness to receive novel treatments: 82.1% participants demanded benefit in overall survival or quality of life; exigences were met in Ao = 53.6% of patients. ConclusionsLittle agreement was observed between expectations and preferences of our onco-hematological patients and European Public Assessment Reports, according to overall survival and quality of life. Most patients preferred an improvement in quality of life, but also expected an increase in overall survival with their treatment. Almost half of patients would not meet their requirements to receive their drug when it was authorized.

Operating AI systems in the electricity sector under European’s AI Act – Insights on compliance costs, profitability frontiers and extraterritorial effects

Artificial intelligence (AI) brings great potential but also risks to the electricity industry. Following the EU's current regulatory proposal, the EU Regulation for Artificial Intelligence (AI Act), there will be direct, potentially adverse effects on companies of the electricity industry in Europe and beyond, as well as those active in the development of AI systems. In this paper, we develop a replicable framework for estimating compliance costs for different electricity market agents that will need to comply with the numerous requirements the AI Act imposes. The electricity systems of Austria, Greece and Switzerland are used as case-studies. We estimate annual, aggregated costs for electricity market agents ranging from less than one million to almost 200 million Euros per country, depending on compliance costs scenarios. Results suggest that a profit growth of 10% through AI utilization is needed to offset the highest added compliance cost of the AI Act on electricity market agents. Eventually, we further show how to assess the regional differences of these costs added to system operation, providing spatially disaggregated compliance costs estimates that consider the structural differences of the electricity industry within 26 Swiss cantons.

Exploitable biomass and acceptable biological catch (ABC) for spiny lobster Panulirus polyphagus from the coast of North Kalimantan, Indonesia using data-limited fisheries

The acceptable biological catch (ABC) can be applied as a management tool to maintain the lobster stock sustainability in North Kalimantan waters where the overfishing condition of lobsters has been detected. Using data-limited fisheries, this study determines the exploitable biomass and ABC of mud spiny lobster (Panulirus polyphagus). The biomass was estimated based on biomass-based length cohort analysis. The exploitable biomass is considered from the biomass at a size larger than the minimum landing size (≥80 mm). The results showed that the total exploitable biomass was estimated as 51,062 kg, and the ABC can be considered as 14,306 kg. The reduction of yields is needed as 26% from the current annual yield to reach the ABC. The catch quota can be given to each fisherman to manage their fishing effort to fill the allowable catch quota. The cooperation between the government, fisherman and market agents is critical to support the implementation of the catch quota system.

Российский рынок вагоноремонтных услуг: конкурентоспособность субъектов в эпоху цифровизации

The study is devoted to the analysis of the domestic market for carriage repair services as well as the prospects of its development under the conditions of digitalization. The authors emphasized rolling stock repair due to the ongoing reform of this industry and its transfer to a competitive basis through the development of independent market agents as well as a fully competitive market. Passenger carriage repair is realized by internal departments of the company. As a result of the research, the directions of digital transformation in the freight car repair market were revealed. In particular, it was suggested to introduce electronic document management, the development of a unified electronic register of spare parts and performed works, and the creation of digital “twins” (electronic copies) of freight cars. These measures would greatly decrease the operating costs of rolling stock by streamlining the time to process information about their condition and simplifying procedures for planning maintenance, scheduled repairs, and unscheduled repairs. In the car repair services market, a digital ecosystem is formed as a result of the integration of such digital platforms as automatic control systems, portals of electronic document management, specialized portals, and electronic databases of spare parts and other components. This allows for connections between car repair enterprises, owners of rolling stock, the owner of infrastructure (OJSC Russian Railways), as well as other participants in the market under analysis. These transformations lead to higher service, help to avoid the usage of low-quality spare parts, increase repair quality, and, as a result, increase railway transportation security. The work demonstrates the economic effect of digital ecosystems used for document management and the interaction process between carriage owners and repair enterprises.