Market Equilibrium Conditions Research Articles

Adjustment strategies and chaos in duopoly supply chains: The impacts of carbon trading markets and emission reduction policies

Low-carbon policies serve as a core incentive mechanism to promote carbon reduction in duopoly supply chains. However, their directive impact may cause product prices and carbon emission adjustment speeds to accelerate too quickly, thereby triggering market instability. Current research is noticeably lacking in discussions on optimal configurations of supply chain management strategies and policy implementation under market equilibrium conditions. Therefore, this paper utilizes game theory and chaos theory to explore the dynamic operational strategies and optimal profits of duopoly supply chains under a single carbon trading mechanism and considering carbon reduction incentives. The findings indicate: (1) Price adjustment parameters significantly affect both parties' equilibrium strategies and system stability; (2) An increase in carbon prices and carbon reduction incentive intensity both narrow the stable areas for pricing and reduction strategies; (3) Both manufacturers and remanufacturers experience higher optimal pricing, reduced carbon reductions on their part, and more carbon reductions on the part of their counterparts due to the escalating costs of carbon reduction; (4) While enhancing carbon reduction incentives significantly aids both parties in achieving carbon reductions, as the reduction effect gradually diminishes, it also compresses their profit margins, whereas an increase in carbon quotas can linearly enhance business profits.

Long-term equilibrium in electricity markets with renewables and energy storage only

AbstractIn this paper, we study the optimal generation mix in power systems where only two technologies are available: variable renewable energy (VRE) and electric energy storage (EES). By using a net load duration curve approach, we formulate a least-cost optimization model in which EES is only limited by its power capacity. We solve this problem analytically and find least-cost and market equilibrium conditions that lead to the optimal capacities of VRE and EES. We show that, mathematically, an electricity price structure that depends on the period of the year (i.e. EES charging or discharging, VRE curtailment, load shedding) and on investments costs leads to cost recovery for VRE and EES. We show that when EES is the marginal technology (either charging or discharging) the price must be non-zero. More specifically, the equilibrium prices during EES charge or discharge are functions of the EES and VRE fixed costs. We confirm our analytical findings using a numerical model. We argue that, although the system we study is hypothetical and simplified, our findings provide insights and research directions for how to recover fixed costs in a future electricity market based on VRE and EES only.

Modeling Impacts of Implementation Policies of Tradable Credit Schemes on Traffic Congestion in the Context of Traveler’s Cognitive Illusion

A tradable credit scheme (TCS) is a novel traffic demand management (TDM) measure that can effectively mitigate traffic congestion in a revenue-neutral way. Under a given TCS, the cognitive illusion (CI) would occur when travelers instinctively use a specious thinking logic to estimate travel cost. The traveler’s CI would significantly influence his/her route choice behaviors, and thus the regulation effect of TCS on mitigating traffic congestion. To reveal the impacts of implementation policies of TCS on managing network mobility in the context of the traveler’s CI, this study investigated the traffic equilibrium assignment model with consideration of the traveler’s CI and the specific implementation policies of TCS. By incorporating the two types of factors into the generalized path travel cost (GPTC), the coupled user equilibrium (UE) and market equilibrium (ME) conditions are established to describe the equilibrium state of the traffic network under a given TCS. As the implementation policies of TCS are factored in the GPTC, different types of initial credit distribution scheme (ICDS) and the transaction costs (TC) of trading credits can be analyzed within the unified model framework. The coupled UE and ME conditions are then reformulated as an equivalent variational inequality (VI) model, and the sufficient conditions for the uniqueness of UE link flows and ME credit price are also provided. The system optimal (SO) TCS design problem is further investigated to achieve the minimum total travel time (TTT) of the transportation network, and two analytical methods are proposed to obtain the SO TCS in the context of the traveler’s CI. Numerical experiments are presented to verify the proposed model and methods. The results show that the presence of the traveler’s CI has an effect of lowering the ME credit price, and ICDS and TC have a complex network-wide influence on the ME credit price and UE link flows, which depends on the specific values of the relevant parameters.

Fon Biriktirim Sistemi ve Yaşlanma: Ampirik Bir İnceleme

The social security reform wave in the 1990s and the early 2000s responded to the rising deficits of the public PAYG (pay-as-you-go) systems. Privatisation of social security was regarded as a cure for the population ageing problem believed to lie under the situation. Some academics were sceptic and argued that privatisation was not a remedy to the ageing problem. This paper empirically investigates the validity of this claim. Using a simple market equilibrium condition, the implications of the ageing population for saving rates are examined for more than 150 countries for the 2000 to 2100 period. It is found that ageing may cause unsustainability in funded pension systems. The impact is especially profound for southern and eastern European countries, Korea, and Japan.

The development of input-monitoring system on biofuel economics and social welfare analysis.

Biofuel production relies on stable supply of biomass which would be significantly influenced by climate-induced impacts. Since the actual agricultural outputs are relatively unpredictable in the face of uncertain environmental conditions and can only be realized in the harvest season, providing useful information regarding the stability of biomass supply to the downstream biofuel industry is crucial. This study firstly illustrates a theoretical framework to explore the resultant market equilibrium and optimal conditions of agricultural and bioenergy production in the face of highly uncertain environmental risks and then employs a two-stage stochastic programming model to investigate the optimal biofuel development and associated economic and environmental effects. The results show that total welfare may not always increase because the loss of other agricultural commodities induced by climate impacts may be greater than the gains received by biofuel production and emission reduction. This study provides insights into the area where artificial intelligence monitoring system can be implemented to analyze the input data associated with agricultural activities and help the biofuel industry to improve its production possibilities.

Distribution Optimal Power Flow With Energy Sharing Via a Peer-To-Peer Transactive Market

The technology advancement and cost decline of renewable and sustainable energy increase the penetration of distributed energy resources (DERs) in distribution systems. Transactive energy helps balance the local generation and demand. Peer-to-peer (P2P) energy trading is a promising business model for transactive energy. Such a market scheme can increase the revenue of DER owners and reduce the waste of renewable energy. This article proposes an equilibrium model of a P2P transactive energy market. Every participant seeks the maximum personal interest, with the options of importing or providing energy from/to any other peer across different buses of the distribution network. The market equilibrium condition is obtained by combining the Karush–Kuhn–Tucker conditions of all problems of individual participants together. The energy transaction price is endogenously determined from the market equilibrium condition, which is cast as a mixed-integer linear program and solved by a commercial solver. The transactive energy flow is further embedded in the optimal power flow problem to ensure operating constraints of the distribution network. We propose a remedy to recover a near optimal solution when the second-order cone relaxation is inexact. Finally, a case study demonstrates that the proposed P2P market benefits all participants.

The Racialization of Drug Fakery and Pharmaceutical Markets

ABSTRACT In this article, I show that fake drugs circulate widely in markets that chronically experience non-equilibrium. Moreover, those who manufacture, buy, and sell low priced drugs for African markets are negotiating chronic market volatility and downward pricing pressures that are transnational in scope. I argue that global policy experts; state, regional, and global regulation agencies and organizations; and international NGOs that have stakes in eradicating fake drugs falsely assume that pharmaceutical traders work within market equilibrium conditions. These assumptions are racialized because they hold actors and markets accountable to a market equilibrium and rational actor standard that are characterized by a European imagination that came into being at the height of trans-Atlantic slavery and capitalist formation. Yorùbá and Ìgbò non-equilibrium theories of the market, in contrast, have characterized markets as volatile and precarious since the 15th century arrival of the Portuguese to West Africa. The implications are that preconceived ideas of equilibrium de facto racialize those who have little opportunity in a deeply precarious system – they are labeled as “fraudsters” rather than seen as rational actors working under conditions of extreme market volatility.

PENGUKURAN KINERJA PORTOFOLIO OPTIMAL SAHAM LQ45 MENGGUNAKAN METODE CAPITAL ASSET PRICING MODEL (CAPM) DAN LIQUIDITY ADJUSTED CAPITAL ASSET PRICING MODEL (LCAPM)

Investment is planting some funds to get profit and the stock is one of the type of investment in fincancial that the most interested for investors. To avoid the risk of investing, investors try to diversify their invesments by using portfolio. Stock portfolio is investment which comprised of various stocks from different companies, with the expect when the price of one stock decreases, while the other increases, then the investments do not suffer losses. Models that can be used to make a portfolio, one of them is Capital Asset Pricing Model (CAPM) and Liquidity Adjusted Capital Asset Pricing Model (LCAPM). CAPM is a model that connects expected return with the risk of an asset under market equilibrium condition. LCAPM is a method of new development of the CAPM model which is influenced by liquidity risk. To analyze whether the formed portfolio have a good performance or not, so portfolio perfomance assessment will be done by using The Sharpe Index. This research uses data from closing prices, transaction volume and volume total of LQ45 Index stock on period March 2016-February 2020 and then data of JCI and interest rate of central bank of the Republic of Indonesia. Based on The Sharpe Index, optimal portfolio is LCAPM model portfolio with 3 stock composition and the proportion investment are 32,39% for LPPF, 49,86% for SRIL and 17,75% for TLKM. Keywords: LQ45 Index, Portfolio, Capital Asset Pricing Model (CAPM), Liquidity Adjusted Capital Asset Pricing Model (LCAPM), The Sharpe Index.

A convex programming approach for ridesharing user equilibrium under fixed driver/rider demand

With the proliferation of smartphone-based ridesharing apps around the world, traffic assignment with ridesharing is drawing increasing attention in recent years. A number of ridesharing user equilibrium (RUE) models have been proposed, but most of them are formulated as path-based mixed complementarity problems based on presumed ridesharing price and inconvenience functions, thus are inconvenient to implement in reality. In this study, by redefining the set of feasible driver trajectories and the market equilibrium conditions for ridesharing, we propose an alternative approach to modeling the RUE when the driver- and rider-demand for each OD pair are fixed and given. We show that the resulting RUE conditions can be equivalently transformed into a convex programming problem, and the existence and uniqueness of RUE link flows are guaranteed under mild conditions. The structure of the model is similar to the classic Beckmann’s formulation, except for the additional ridesharing demand-supply constraints. So a dual subgradient algorithm with averaging is proposed to solve the problem, and the dual sub-problem can be solved by the Frank-Wolfe method. The algorithm effectively avoids path enumeration, therefore is implementable on large networks. The impact of problem size on the computational efficiency of the algorithm is theoretically analyzed and numerically demonstrated.

A mean field game model for the evolution of cities

<p style='text-indent:20px;'>We propose a (toy) MFG model for the evolution of residents and firms densities, coupled both by labour market equilibrium conditions and competition for land use (congestion). This results in a system of two Hamilton-Jacobi-Bellman and two Fokker-Planck equations with a new form of coupling related to optimal transport. This MFG has a convex potential which enables us to find weak solutions by a variational approach. In the case of quadratic Hamiltonians, the problem can be reformulated in Lagrangian terms and solved numerically by an IPFP/Sinkhorn-like scheme as in [<xref ref-type="bibr" rid="b4">4</xref>]. We present numerical results based on this approach, these simulations exhibit different behaviours with either agglomeration or segregation dominating depending on the initial conditions and parameters.

Improving the efficacy of carbon tax policies

This paper examines the efficacy of carbon tax policies in view of the interactions between such policies and the firm’s carbon efficiency and financing decisions. We show that because the government, unlike capital markets, does not price its policy’s risk by taking into account default probabilities, the firm takes advantage of the government by using senior debt to minimize the carbon tax policy’s cost. The shift to debt financing, in turn, mitigates the carbon tax policy’s efficacy, resulting in lower carbon efficiency, thus higher carbon emissions. To remedy the government’s predicament, we propose a correct-pricing rule that mimics market equilibrium conditions, thereby forcing firms to consider government interests. Such a rule renders senior debt no longer useful for reducing the carbon tax policy’s cost. As a result, the tax policy’s efficacy increases, hence reducing carbon emissions. Finally, we briefly consider and comment on the case of a social-welfare maximizing government that strategically chooses its carbon tax.

RETRACTED: Agricultural labor market equilibrium based on FPGA platform and IoT communication

Increasing food demand in terms of quality and quantity is the need for industrialization and strengthening the agricultural sector. IoT is an upcoming technology that offers many innovative solutions to modernize the agricultural sector. Scientific research institutes and scientific groups continue to work hard to provide solutions and products that use the Internet of Things to solve different issues of agriculture. FPGA-based IoT (Internet of thing) systems are preferred as a source of communication in agricultural labor market equilibrium systems, for balancing marketability and flexibility in the economic sector. In the agriculture labor market, labor can be taken and given as a commodity. Agriculture performs these labor market equilibrium in a different application of non-farm labor markets, often relying on intermediaries such as contractors to market groups of workers and relocating them to the farm, using piece-rate wage systems to encourage workers and employers cooperating with the labor market. The economic market analysis is guided, and monetary boundaries influence the low and high performance of enrollment. Market Equilibrium conditions have been created to clarify the roundabout impacts of changes in money owed to the utilization of provisions. Labor market equilibrium models show the immediate and roundabout impacts of yield power, yield value, input use, and benefit of the rural segment on yield and salary approaches.

Are we explaining the movement of hotel room rates correctly?

Demand function, inverse demand function or market equilibrium condition has been used to estimate the empirical models that explain the movement of hotel room rates. However, hotels generally face excess supply of rooms. This research paper develops a simple theoretical model to link hotel room rates to excess supply of hotel rooms. The annual data of Singapore from 1991 to 2017 is used to test this framework. Due to small sample size, with only 27 observations, the bounds testing approach to cointegration is applied on the annual data of hotel industry in Singapore because the obtained estimators are super-consistent. It is found that average hotel room rate and average hotel occupancy rate are cointegrated to confirm hotel room rates and excess supply of hotel rooms are inversely correlated. In order to avoid model mis-specification, major crises are captured by dummy variables which are treated as fixed regressors in the bounds testing approach to cointegration. The empirical and theoretical frameworks used in this study suggest that when hotel occupancy rate is used as an independent variable in modelling the determination of hotel room rates, a researcher is adopting excess supply framework developed in this paper. Furthermore, this framework teaches students in tourism a simplified way to explain the movement of hotel room rates, while still reminding students about the complexity of hotel industry.

Energy Trading and Market Equilibrium in Integrated Heat-Power Distribution Systems

The increasing utilization of cogeneration plants and energy conversion facilities accelerates the integration of energy systems, which introduces both opportunities and challenges into system operation and management. Thorough mathematical models and analytical methods that take into account the energy flow interdependence and strategic behaviors in multi-carrier energy systems are highly desired. This paper studies an integrated heat-power distribution system from the market perspective. The nonlinear AC optimal power flow (OPF) model is used to clear the distribution power market, which exactly accounts for network losses. To facilitate computation, convex relaxation is applied and polyhedral outer approximation of second-order cone is performed, leading to a linear market clearing model. An optimal thermal flow (OTF) model is employed to clear the heat market. Energy consumptions of heating devices are charged according to locational marginal prices. The market equilibrium is interpreted by a fixed point between OPF and OTF and reformulated as a mixed-integer linear program. Dedicated optimization models are set forth to investigate the market impact of strategic providers and elastic demands in which the market equilibrium condition serves as constraint. Case studies validate the effectiveness of the proposed model and method.

Decomposition and Equilibrium Achieving Distribution Locational Marginal Prices Using Trust-Region Method

We propose a new distribution locational marginal price (DLMP) model which is based on a linearized variant of the global energy balance formulation along with trust-region-based solution methodology. Compared to existing DLMP works in the literature, the proposed DLMP model has shown to depict the following features: 1) it decomposes into most general components, i.e., energy, loss, congestion, and voltage; 2) it presents market equilibrium conditions; and 3) it is capable of achieving an efficient flexibility resource allocation in local day-ahead distribution grid markets. The developed model is tested first on a benchmark IEEE 33-bus distribution grid and then on much larger grids with the inclusion of dispatch from flexible loads and distributed generators.

주택임대시장 균형조건을 이용한 주택매매가격 대비 전세가격 비율 결정요인 분석: 주택매매가격 변동성을 중심으로

Traditional approach to analyze the determinants of Chonsei deposit to housing sales price ratio is based on asset market equilibrium condition. However, this approach does not fully account for complexity involved in Korean rental housing market, where Chonsei, Monthly-rent-with-variable deposit, and pure monthly rental contracts coexist. In this paper, we utilize each rental type’s different rate of return structure and examine the determinants of Chonsei deposit to housing sales price ratio based on rental housing market equilibrium condition. We further incorporate housing price volatility into the analysis as a critical variable related to housing investment risks, which has been ignored in previous studies. Our empirical analysis using a sample of the apartment sales price and rent in Seoul confirm our theoretical predictions: Chonsei deposit to housing sales price ratio is positively linked to the rent-to-price ratio and housing price volatility, and the ratio is negatively affected by the expected housing price appreciation rate. The relationship between the Chonsei deposit to housing sales price ratio and housing price volatility was robust to different measures of housing price volatility. The long-run elasticity of Chonsei deposit to housing sales price ratio with respect to rentto- price ratio was estimated to be 1.04~1.22 and the long-run elasticity of the ratio with respect to housing price volatility was estimated to be 0.15~0.53. which is about 50 to 100 percent of the long-run elasticity with respect to expected housing price appreciation rate. These results show that previously ignored housing price volatility is one of important variables to affect Chonsei deposit to housing sales price ratio and risk factors are needed to be considered to better understand Korean housing market.

A Multi-Period Tradable Credit Scheme Incorporating Interest Rate and Traveler Value-of-Time Heterogeneity to Manage Traffic System Emissions

This study focuses on a tradable credit scheme (TCS)-based multi-period equilibrium modeling framework to address the planning problem of a central authority which seeks to minimize the vehicular emissions in a traffic network over a planning horizon (PH). In this context, the multi-period TCS (MPTCS) equilibrium conditions consist of traffic and market equilibrium conditions. To develop an effective TCS design in practice, this study factors the heterogeneity in travelers' value of time (VOT) to enable realism in capturing the traffic equilibrium conditions, and the interest rate to reflect market realism. The VOT is an important factor in the route choice process as travelers tradeoff the credit consumption and travel time costs of each route. Further, travelers decide between selling or transferring unused credits across periods based on the dynamic interest rates over the PH as they can accrue interest by selling credits in the market. The study investigates the existence and uniqueness of multi-period equilibrium credit prices, aggregate link flows and travel demand rates. Then, the equilibrium credit prices under the MPTCS are analyzed and it is demonstrated that while credit price volatility increases with increasing interest rates, it can be dampened by the ability of travelers to transfer credits under the MPTCS. Finally, a system optimal (SO) MPTCS is designed to determine the TCS parameters (credit allocation and charging schemes) that minimize vehicular emissions in a traffic network over the PH. The study insights suggest that the SO design of MPTCS provides a capability to manage network vehicular emissions over the PH. Further, they suggest that if VOT is not factored, the TCS would be socially inequitable, and ignoring interest rates creates inefficiencies in achieving desired emissions levels.

THE DISTRIBUTION OF BETAS IN PRESENCE OF NONTRADED ASSETS

ABSTRACTThis study considers a capital assets pricing model (CAPM) in an incomplete financial market wherein not all risky assets are traded and the risk from non‐traded assets is not orthogonal to that of the existing or traded assets. The model shows the extent of the divergence of the CAPM betas (true betas) from the traditional CAPM betas (perceived betas) in market equilibrium conditions in an incomplete market. Specifically, it implies that the more incomplete a financial market is, the wider is the discrepancy between the true and perceived betas, and the distribution of the perceived betas tends to centre more around 1 in an incomplete market than that of true betas. Empirical evidence in various settings support these results.

An equilibrium-conserving taxation scheme for income from capital

Under conditions of market equilibrium, the distribution of capital income follows a Pareto power law, with an exponent that characterizes the given equilibrium. Here, a simple taxation scheme is proposed such that the post-tax capital income distribution remains an equilibrium distribution, albeit with a different exponent. This taxation scheme is shown to be progressive, and its parameters can be simply derived from (i) the total amount of tax that will be levied, (ii) the threshold selected above which capital income will be taxed and (iii) the total amount of capital income. The latter can be obtained either by using Piketty’s estimates of the capital/labor income ratio or by fitting the initial Pareto exponent. Both ways moreover provide a check on the amount of declared income from capital.

IS – LM model revisited in the perspective of underground economy

PurposeThe purpose of this paper is to review the investment-savings, liquidity-money (IS–LM) model used in the traditional macroeconomic theory as an important tool to analyze the dynamics of product and money market. The IS curve represents product market equilibrium condition and the LM curve represents money market equilibrium condition. However, the traditional IS–LM model was formulated mainly keeping in mind the dynamics of the product and money markets of developed economies. Thus, there was an urgent need to explore the pre-established IS–LM model in the light of existing enormous, illicit underground economies prevalent all around the world.Design/methodology/approachIn this paper, an exploratory attempt has been made to review the IS–LM model in the light of various illicit practices and by incorporating some assumptions that are relevant to this discussion. In this model, ISil curve could be defined as a locus of points each representing a combination of evaded tax and output of the illicit economy that will keep the illicit economy in equilibrium and, the LMil curve could be defined as a locus of points each representing a combination of illicit supply of money and output of the illicit economy that will keep the illicit economy in equilibrium.FindingsThis paper is aimed at analyzing the traditional IS–LM model from a different perspective, namely, the pervasive underground economy thriving all around the world regardless of the stages of growth and development. A sincere attempt has been made to keep the assumptions simple and closest to the real-world scenario as well as pertinent to the logic of economic theory. In this paper, two major factors of illicit practices, i.e. tax evasion and bribery, are given prime importance and the discussion is focused on those two factors of corruption.Originality/valueThis paper has been prepared keeping in view the standard technical procedures and findings that are described in the relevant academic materials like textbooks and journal publications (mentioned under the “References” column). The analysis and findings appearing in the article are based on logical explanations and are completely free from plagiarism.