Number Of Market Participants Research Articles

Solving large-scale electricity market pricing problems in polynomial time

In centralized wholesale electricity markets worldwide, market operators use mixed-integer linear programming to solve the allocation problem. Prices are typically determined based on the duals of relaxed versions of this optimization problem. The resulting outcomes are efficient, but market operators must pay out-of-market uplifts to some market participants and incur a considerable budget deficit that was criticized by regulators. As the share of renewables increases, the number of market participants will grow, leading to larger optimization problems and runtime issues. At the same time, non-convexities will continue to matter, e.g., due to ramping constraints of the generators required to address the variability of renewables or non-convex curtailment costs. We draw on recent theoretical advances in the approximation of competitive equilibrium to compute allocations and prices in electricity markets using convex optimization. The proposed mechanism promises approximate efficiency, no budget deficit, and computational tractability. We present experimental results for this new mechanism in the context of electricity markets, and compare the runtimes, the average efficiency loss of the method, and the uplifts paid with standard pricing rules. We find that the computations with the new algorithm are considerably faster for relevant problem sizes. In general, the computational advantages come at the cost of efficiency losses and a price markup for the demand side. Interestingly, both are small with realistic problem instances. Importantly, the market operator does not incur a budget deficit and the uplifts paid to market participants are significantly lower compared to standard pricing rules.

Mitigating Market Power and Promoting Competition in Electricity Markets through a Preventive Approach: The Role of Forward Contracts

This paper proposes a novel approach to optimizing the structure of the electricity market by mitigating market power through the use of forward contracts. The IEEE 30 node test system is used as a case study for the paper, which employs nodal pricing and a Cournot model with recursive optimization. The findings show that forward contracts can reduce market power and lead to a more competitive market structure with fewer participants. The study emphasizes the importance of successor companies having a well-balanced mix of generation technology. Six players with a different generational mix are optimal in the constrained nodal pricing scenario, while five players with slightly different mixes are optimal in the Cournot case study. These findings have important implications for policymakers and industry stakeholders involved in the design and implementation of efficient electricity markets. Market power can be reduced by using forward contracts and establishing an appropriate number of market participants, resulting in more efficient and sustainable electricity markets. Overall, this study provides useful insights for improving electricity market structures and increasing competition in the electricity sector.

Subgroup fairness in two-sided markets.

It is well known that two-sided markets are unfair in a number of ways. For example, female drivers on ride-hailing platforms earn less than their male colleagues per mile driven. Similar observations have been made for other minority subgroups in other two-sided markets. Here, we suggest a novel market-clearing mechanism for two-sided markets, which promotes equalization of the pay per hour worked across multiple subgroups, as well as within each subgroup. In the process, we introduce a novel notion of subgroup fairness (which we call Inter-fairness), which can be combined with other notions of fairness within each subgroup (called Intra-fairness), and the utility for the customers (Customer-Care) in the objective of the market-clearing problem. Although the novel non-linear terms in the objective complicate market clearing by making the problem non-convex, we show that a certain non-convex augmented Lagrangian relaxation can be approximated to any precision in time polynomial in the number of market participants using semidefinite programming, thanks to its "hidden convexity". This makes it possible to implement the market-clearing mechanism efficiently. On the example of driver-ride assignment in an Uber-like system, we demonstrate the efficacy and scalability of the approach and trade-offs between Inter- and Intra-fairness.

ФУНКЦІОНАЛЬНИЙ ФІНАНСОВИЙ БЕНЧМАРКІНГ НА СТРАХОВОМУ РИНКУ УКРАЇНИ

The article determines the importance of benchmarking as a tool for forming strategic decisions in the insurance business at the current stage. Functional benchmarking of financial parameters was chosen as an applied component of the study. Insurance companies as financial institutions operate exclusively with cash flows, which explain the approach chosen. Each sector of the Ukrainian economy has suffered from the war with russia. But the depth of losses and the time of the fall in individual industries differed significantly. The conducted analysis showed that the losses of the insurance business were immediate and very significant. Inefficiency and low financial stability were characteristic of most insurers in Ukraine even in the pre-war period. The market falls during the war only emphasized the previously accumulated problems. Benchmarking of financial parameters of TOP10 insurance companies was carried out based on real data of the non-life insurance sector. The first half of 2022 was chosen for the analysis, which is explained by heavy market and financial losses (related to the war) of all insurance market participants. A methodological problem (formation of statistical data and their systematization) was identified during the research. The methodological approach of conducting functional financial benchmarking, which was formed by the authors, made it possible to eliminate this problem. The main compared financial parameters, sources of initial information and presents the benchmarking procedure are defined. The basic financial parameters in comparison allow us to identify the strengths and weaknesses of the activities of insurers in today’s difficult conditions. The analysis showed that the market is in the conditions of a liquidity gap, which arose due to a sharp decrease in the receipt of insurance premiums and an increase in insurance payments. The problem of low capitalization, which is a common threat to all market participants, was identified. The problem of low efficiency also occurred in the pre-war period and worsened during the war. It is possible to predict a decrease in the number of market participants under the influence of the outlined problems in the near future. A number of solutions for overcoming crisis manifestations in the insurance market in the war and post-war periods are suggested in the article.

ФОРМУВАННЯ ІНФОРМАЦІЙНОЇ ОСНОВИ БЕЗПЕКОВОЇ ДІЯЛЬНОСТІ ТОРГОВЕЛЬНИХ ПІДПРИЄМСТВ

The previously existing orientation in security activities to eliminate the consequences of internal threats has lost its relevance due to the significant impact of two key factors within the last few years. COVID-19 and the new phase of military aggression require the transformation of the economic security system within the limits of each trade enterprise, regardless of the scale of its activity. These changes should directly affect the expansion of the information field, in particular its external part, for the implementation of security activities based on the need for early detection of external and internal threats and all new opportunities, the use of which allows improving competitive positions. The purpose of the study was to generalize official statistical data and the work of representatives of scientific schools to form one of the components of information support for the security activities of trade enterprises. In order to form the informational basis of the security activities of trade enterprises, the following methods were applied: induction and deduction, comparison and systematization – in the study of the principles of the functioning of wholesale and retail trade enterprises; synthesis and analysis – to assess the dynamics and determine trends in the change in the number of trading enterprises; morphological analysis – to specify the degree of influence of certain factors on the activity of trade enterprises within 2010–2022; graphic – for visual representation of theoretical and methodical material; abstract-logical – for theoretical generalizations and research conclusions. The parameters of one of the many points of the external information field are considered, which involves careful monitoring of changes in the number of market participants in order to establish trends and, on this basis, adjust the company's development strategy. It was established that within the period 2010–2022 there were several waves in the change in the number of trading enterprises under the influence of the beginning of military aggression in 2014–2015, the relative stability of the national economy until 2019, due to COVID-19 and a new phase of aggression on the part of the Russian Federation in 2022. The facts of constantly high competition on the part of individual entrepreneurs, as well as concentration and strengthening of specialization, which are excellent for enterprises specializing in the sale of food and non-food products, have been established.

An Updated Review and Outlook on Electric Vehicle Aggregators in Electric Energy Networks

Electric vehicles (EVs) are predicted to be highly integrated into future smart grids considering their significant role in achieving a safe environment and sustainable transportation. The charging/discharging flexibility of EVs, which can be aggregated by an agent, provides the opportunity of participating in the demand-side management of energy networks. The individual participation of consumers at the system level would not be possible for two main reasons: (i) In general, their individual capacity is below the required minimum to participate in power system markets, and (ii) the number of market participants would be large, and thus the volume of individual transactions would be difficult to manage. In order to facilitate the interactions between consumers and the power grid, an aggregation agent would be required. The EV aggregation area and their integration challenges and impacts on electricity markets and distribution networks is investigated in much research studies from different planning and operation points of view. This paper aims to provide a comprehensive review and outlook on EV aggregation models in electrical energy systems. The authors aim to study the main objectives and contributions of recent papers and investigate the proposed models in such areas in detail. In addition, this paper discusses the primary considerations and challenging issues of EV aggregators reported by various research studies. In addition, the proposed research outlines the future trends around electric vehicle aggregators and their role in electrical energy systems.

APPLICATION OF MULTI-AGENT SYSTEMS IN ELECTRICITY MARKET SIMULATORS

Since the liberalization and deregulation of the electricity markets throughout the world are in full swing, the number of market participants, as well as their diversity, is sharply increasing. In the traditional monopolistic market model, all the processes that occur in a power system have been supervised by vertically integrated companies. Since market logic is changing from that oriented toward minimizing generation costs for electrical energy to the trend of maximizing profit, the risk is being distributed among all the market participants uniformly and is no longer entirely borne by the final consumers. Under such uncertain conditions, in which the prices of electrical energy change from hour to hour, each market participant wants a reliable tool to facilitate optimal and quality decisions and strategic performance.

The Impact of Competition on Building Material Prices in Russia on the Example of Ready-Mixed Con-crete Markets

The study examines whether the factor of intensity of competition by firms was the reason for the recent price increase in the building materials markets in Russia. The author develops a price estimation model to explain the role of market power factor in ready-mixed concrete and crushed stone regional markets’ prices increase during 2021 by applying “difference in difference” approach. The analysis shows that it wasn’t the factor of market power that was responsible for the recent price increase in the considered building materials markets. Thus, the results based on such imperfect indicators of intensity of competition as number of market participants and market concentration, that are, nevertheless, widely used by the FAS of Russia, provide criticism for the manner of implementing instruments of antitrust policy in Russia, namely the concept of abuse of collective dominance.

SOCIO-ECONOMIC PREREQUISITES FOR THE DEVELOPMENT OF THE DESIGN SERVICES MARKET

Abstract. The purpose of the article is to substantiate the economic and social prerequisites for the development of the market of design services, which operates successfully only subject to the integration of the global market of design services, creative abilities and business qualities of domestic designers whose activities should meet the expectations of the ever-increasing demands of consumers and the individual needs of design professionals. The theoretical significance of the article is to recognize and generalize analytical and critical research of Ukrainian and foreign scientists, the authors’ own experience in business and design activities and identify on this basis the leading socio-economic prerequisites for the development of the design services market. The ground is being held that one of the main roles in the functioning of the market of design services is played by the customer, who focuses on his aesthetics and, given this, dictates prices. The domestic design market is characterized by growth and it is substantiated that the key to its progress is to increase the quality of products, including design projects, and, of course, the number of market participants (designers, manufacturers, consultants), able, on the one hand, to create products and services demanded by society and individual consumers, and on the other — to influence the growth of their aesthetic perception. Therefore, the professional self-realization of manufacturers of designer products in the modern market economy is positioned as one of the key socio-economic prerequisites for the development of the market of design services and a powerful motivator for maximum creative expression of individual qualities of designers. It has been established that designers have an insufficient level of business competencies, and formal and non-formal education do not pay due attention to them. In this regard, the main ways of undertaking business activities in the field of design have been recognized and systematized, which allows to solve the problem of professional self-realization of the prospective professionals. The practical significance of the article is to formulate specific recommendations for improving the professional content of design education and positioning the best training methods for competitive professionals, as most graduates of art faculties of higher and professional pre-higher educational institutions, including graphic designers, in order to adapt to market economies make great efforts, for this purpose, to realize their individual creative potential in the realities of today. The conclusion is substantiated that the socio-economic prerequisites for the development of the market of design services are as follows: the progress of design, its focus on meeting consumer needs, the level of aesthetic tastes of the customer, professional and entrepreneurial competences of designers, opportunities for self-realization. Since design is a product of intellectual and creative activity and it is specialists in this field who largely ensure its development. But in the context of business development in the field of design success depends not only on the creative abilities of the designer, but also his ability to create an idea that will draw attention of investors and consumers, unite around this idea like-minded people able to implement it, create a competitive and ultimately profitable product which will justify all costs and meet the expectations of investors, producers and consumers of this product. Keywords: design services, economic and social preconditions, design education, professional self-realization, professional recognition, Self employment, Educational innovation, College, Course design, Self development. JEL Classification L82 Formulas: 0; fig.: 0; tabl.: 1; bibl.: 26.

Analysis of real estate services digitalisation: current situation and development prospects

The article analyses the digitalisation of real estate services in Russia. Empirical works of leading analytical agencies and experts’ academic papers in the field of economic sciences has been summarised and sysrematised. The development key indicators of Russian digital economy, digitalisation level of certain service sectors, digital production features and digital consumption which characterise the digital economy development, have been considered. It has been noted that at present the digital services of in real estate services are at an early stage of development due to the small number of market participants who have fully implemented digital services and online technologies in their activities. It has been revealed that most of the stages of real estate services for the sale or purchase of residential property can be partly or fully realised using digital services and online technologies. Generalised characteristics of real estate services digitalisation at present and prospects for its development have been formulated.

Kisüzemi gyümölcsös sör termékfejlesztésének kezdeti mikrobiológiai tapasztalatai

The market share of small-scale breweries in the total Hungarian beer market was 3 percent in 2020. The goal of the law affecting the sale of small-scale beers (the so-called “Beer Act”, published in Issue 275 of 2020 of the Hungarian Gazette on December 11, 2020) is to create an opportunity for small-scale breweries to gain a better market position. The measure is expected to have a positive effect on the trends that have been going on in Hungary for years, such as the increase in the number of market participants, the expansion of the product range and the increase in consumer interest. In addition to the above encouraging trends, as consumers, we find that, on average, small-scale breweries lag behind large-scale producers in terms of producing a constant high quality and in ensuring the stability and shelf life of the bottles of beers. The quality deficit mentioned is mainly due to the deficiencies in the quality management systems of small breweries, the inadequate level of expertise available and the specific sales conditions. In this article, small-scale product development of a fruit beer representing one of the most sensitive product categories in terms of packaged product stability because of its low alcohol content and, at the same time, high sugar content is presented. Mainly the experience related to the achievement of microbiological stability is summarized in the paper, while also dealing with the development of the manufacturing environment, summarizing the most important sources of danger and possibilities for failure, and drawing the attention of existing and future manufacturers to the possibility that the certificates of conformity of manufacturers of brewing equipment do not always guarantee their proper functioning, and in many cases they may have to be reviewed and modified. The microbiological relationships mentioned in our manuscript are based on our own observations. The product-specific test methods used in the course of the project are also presented in detail.

Developing a regional milk processing market: A competitive aspect

Subject. This article examines the impact of competition in the dairy industry on the formation of the regional milk processing market structure. Objectives. The article aims to analyze the risks and threats to the economic security of the region arising from the creation of competitive advantages by different types of dairy enterprises. The Saratov Oblast is considered as a case study. Methods. For the study, the neoclassical Structure–Conduct–Performance (SCP) paradigm is used, which is explained through the market positioning theory, resource-based view (RBV), and the transaction approach. Results. The article notes that a moderately concentrated structure of the milk processing market has been formed in the Saratov Oblast. There are two leading enterprises that are able to influence not only the less strong local processing factories and producers of raw milk, but also the Oblast's economic security. Conclusions. Leading dairy companies of the region, following industry leaders, are seeking to expand their competitive position in inter-regional markets. The needs of processors in raw milk constantly exceed the production capacity of dairy farming, and market power enables them to displace local processors from the market and contributes to the reduction of the number of market participants in the dairy industry. The consequences of these actions go beyond antitrust policy and relate to the broader regulation of agri-food markets.

Factoring as a Method of Funding Commercial Companies

Aim. The presented study aims to examine the essence of factoring and explore potential directions for its development in the current economic environment.Tasks. The authors determine the economic substance of factoring, making allowance for the turbulence of the global market environment and the impact of new challenges for the Russian economy.Methods. This study analyzes legislative and regulatory acts as well as works of Russian and foreign scientists regarding the theoretical and practical problems of funding companies through factoring.Results. The factoring market is actively developing, particularly at the times of macroeconomic instability, which slows the turnover of funds in the economy and increases the need for funding sources among market participants. The stability of the factoring market during the COVID crisis serves to illustrate the heightened interest of business entities in factoring as a tool for solving a number of problems in corporate financial management. Some characteristic trends in the development of the Russian factoring market include its synchronization with the international market, active development of blockchain technologies, growing number of market participants and expanding range of services provided within the framework of factoring transactions.Conclusions. Having summarized the theory and practice of factoring development in Russia and abroad, the author concludes that factoring retains its potential as a tool for funding commercial organizations in the context of the development of digital technologies. The demand for factoring services among business entities will continue to grow in the post-COVID economy, which substantiates the practicability of further developing the factoring market and improving the technology behind factoring transactions.

Contracts as regulation: the ISDA Master Agreement

This article proposes a rule of contractual interpretation for regulatory contracts defined as contracts 1) used by a large number of market participants, 2) subject to limitations on deviation, and 3) designed with market problems (such as negative externalities) in addition to transactional problems (such as transaction costs) in mind. The rule states that the outcome of the interpretation of regulatory contracts must not be inconsistent with the objectives of the regulatory framework applicable to the market in which the contract is used. The article suggests that the reliance on that rule is normatively justified in cases where the regulatory objectives are clearly defined and particularly when the alternative outcome is to void the contract or its provision. By adopting the regulatory rule for contract interpretation, courts can preserve the autonomy of private regulatory regimes created through contracts without sacrificing public policy objectives. Several examples of the application of the rule to the interpretation of selected provisions of the ISDA Master Agreement and the ISDA Credit Definitions are discussed.

ON THE THEORY OF INNOVATION DIFFUSION THAT TAKES INTO ACCOUNT SEASONAL PERIODIC FLUCTUATIONS IN THE NUMBER OF CONSUMERS

In the published article, a generalization of the mathematical model of the diffusion of consumer innovations in the market with a variable total volume, developed by the authors, is proposed for the case of periodic seasonal changes in the number of potential buyers. A system has been built, consisting of diffusion equations for an innovative product, taking into account periodic fluctuations in the number of market participants, and equations for changing the total number of potential buyers of an innovative product.

ТЕОРЕТИКО-МЕТОДОЛОГІЧНІ ЗАСАДИ ВИЗНАЧЕННЯ ТА ОЦІНКИ КОНЦЕНТРАЦІЇ РЕСУРСІВ ТЕРИТОРІЙ В УМОВАХ РОЗБУДОВИ ІНТЕГРАЦІЙНИХ ПРОЦЕСІВ

Introduction. Today, quite a number of researchers of integration processes pay attention to the fact that they are closely related to such a phenomenon as the concentration of resources. As concentration (as well as integration) is a multi-level phenomenon, it can affect individual enterprises, companies and organizations (micro level), individual industries and sectoral markets, including commodity, financial, labor markets (meso level), regions, national economies and their territories. (macro level), the world economy (megalevel). In this regard, the processes of concentration in modern scientific publications are studied and analyzed at almost all levels of the economic system.Purpose. The purpose of the article is to substantiate the methods of determining and assessing the concentration of resources of territories in the development of integration processes.Results. The results of the study are to determine the feasibility of using the market concentration index and the Herfindahl-Hirschman index to assess the concentration of regional resources and develop ways to address their shortcomings. The market concentration index is one of the simplest and one of the first indicators, which began to be used by economists to analyze market structures. No wonder this indicator deserves to be actively used to assess the concentration and concentration of regional resources. In turn, the Herfindahl-Hirschman index occupies the position of the main characteristic (market structure, market concentration), which is widely used by governments around the world in the practice of antitrust regulation of the United States, Europe and other countries.Originality. The originality of the article lies in the proposal to eliminate the shortcomings of indicators to assess the concentration of regional resources, which previously scientists have not done. Comparing the possibilities of using the two considered indices to assess the concentration and concentration of regional resources, it is necessary to take into account the following features: the disadvantage of the market concentration index is its insensitivity to different options for distribution of shares between regions; the number of market participants (number of regions) for which it is necessary to calculate to get the most accurate result remains uncertain; the use of this indicator requires additional comparisons of different options for its calculation. As for the Herfindahl-Hirschman index, it allows you to neutralize the shortcomings of other indicators and get more reliable results; takes into account the share of each of the market participants; its disadvantage is that when calculating the squares of market shares, more weight is given to the indicators of larger regions, and less - respectively, smaller.Conclusion. Thus, the outlined provisions and generalized theoretical and methodological approaches require their practical implementation in modern conditions of solving the problems of regional studies of Ukraine. In particular, this focuses on the use of the market concentration index and the Herfindahl-Hirschman index to assess the concentration of regional resources. The identified shortcomings of these indicators should be eliminated by using the proposed methods to eliminate them. Further research should focus on the application of these methods and indicators to assess the processes of concentration, the level of concentration of resources of the regions of Ukraine.

The value of network investment coordination to reduce environmental externalities when integrating renewables: Case on the Chilean transmission network

The need to decarbonize the power sector through increased participation of renewable generation has originated an escalating necessity for transmission network investments that can be undertaken by a number of market participants, including planning authorities/system operators, network companies and project developers. The expansion of the power network, however, presents various environmental and social conflicts, in particular, with land uses that are valuable by society such as the presence of communities, national parks, protected forests, tourism zones, archaeological sites, etc. In this context of environmental and social awareness, we assess the benefits of two strategies that coordinate network investments among various participants and compare them against the current counterfactual approach, where no coordination is undertaken and thus renewable generation projects are connected to the main transmission system in an individual, project-by-project basis. Through various case studies based on the main Chilean transmission system, we show that the lack of coordination in network investments may present severe impacts in terms of the socio-environmental externalities of transmission network expansions. Furthermore, we demonstrate that attempting to reduce externalities of new network investments without proper coordination of new developments may significantly limit the success of a land use policy associated with network developments.

The Master Trust Structure: A Structural Innovation for Chinese Asset-Backed Securitization

Chinese asset-backed securitization (ABS) started from the release of the Pilot Administrative Measures for Pilot Securitization of Credit Assets in 2005 by the China Banking Regulatory Commission (CBRC). Since then, ABS has gradually become a regular financing channel for hundreds of Chinese corporations. However, despite the dramatic increase in both issuance volume and the number of market participants, the Chinese ABS market is still in its infancy in some respects, such as transaction structures and secondary market liquidity. All issuance to date has used a stand-alone trust format. We have found that there is an impetus for innovation by Chinese originators so that the market can attain the full range of benefits that ABS offers (e.g., reducing funding costs, lowering transaction expenses, expediting the funding process, improving capital efficiency, etc.). In this article, we discuss the details of the master trust structure, a potential innovation that can benefit originators by lowering transaction costs and improving the efficiency of capital utilization in China.

Effective extension of trading hours

To uncover the complex feature of the effect of extending trading hours, I analyze what kind of the extension is effective on price efficiency and price stability, by utilizing an agent-based market model. Specifically, I examine whether the partial extension of trading hours—namely implementing the pre-market session and the after-hours session—and what duration of the session is effective. The simulation result reveals that the implementation of both sessions could have a negative impact on price efficiency and stability if investors’ participation during the session is limited; it could result in more concentrated trading in the opening session, wider divergence between market prices and the fundamental value, and lower price stability. In addition, longer sessions are less beneficial (or more harmful). My result also shows that there are very few benefits to trade during the extended-hours sessions. Thus, my findings suggest that the extended-hours trading has a structural weakness which causes illiquidity during the session and lowers price efficiency and price stability during the regular-hour session. However, I find that the implementation of the pre-market session is far more beneficial than that of the after-hours session; exceptionally, the implementation of the short-term pre-market session could induce higher price efficiency and higher price stability regardless of the number of market participants during the session.

Impact of Virtual Bidding on Forward Premia in the California Independent System Operator

In the California wholesale electricity market, physical power is sold competitively in a multi-unit multi-settlement single-price auction comprised of a day-ahead forward market and a real-time spot market. Historically, significant divergences have arisen between forward and spot prices, leading to market inefficiencies. In 2011, the California Independent System Operator implemented virtual bidding as a partial solution to converge prices between markets by opening the forward market to financial speculators without any ties to physical generation or load. Using 5 years of data between April 2009 and March 2014, I estimate hourly time-series models of the system-wide forward premium, and forward premia at the two largest trading hubs. I find virtual bids and off ers to have had no effect on the forward premia during off -peak hours. During peak hours, I find virtual bidding to have caused forward and spot prices to diverge due to the large number of market participants looking to hedge against — or speculate on — the occurrence of infrequent but large spot price spikes by placing virtual demand bids. Virtuals placed at the largest trading hubs were associated with even larger price divergences, suggesting virtual demand bids also distorted the price of congestion and losses at the nodal level.