Perfect Price Research Articles

Research on Reclassification of Power Users for TOU Power Price Based on Fuzzy Clustering

Study on TOU (Time-of-Use) power price in our country almost treats power users as a unified whole, but different categories of users have the different power consumption and way in the actual condition. Therefore, they have different responses to TOU power price. According to the power load features of all kinds of users, the paper presents a solution to reclassify the users using fuzzy clustering algorithm, and provides theoretical basis for implementing categorized TOU power price. Finally comparatively perfect effect is obtained by simulation analysis, and it has great reference value to perfect TOU power price and improve load curve.

Determining optimal transit charges: the Kiel Canal in Germany

The Kiel Canal in Germany connects ports on the Baltic Sea with the rest of the world and is the most-used artificial waterway in the world. Despite this fact, it generates a balance sheet loss. Revenues, which are mainly generated by the transit charge, do not cover its operating expenses. This situation raises the question how the current charging system could be redesigned to make the canal generate a balance sheet profit.In this paper, we focus solely on the canal’s revenue. Because the canal is a monopoly that allows, in principle, for perfect price discrimination, we contrast the current charging system with an optimal charging system based on the willingness-to-pay (WTP) approach. We devise a general approach to calculate optimal transit charges and apply it in a case study that includes four ship types on three routes. The findings of the case study indicate that, in principle, much higher revenues could be generated if the transit charges were based not only on ship size but also on fuel prices and a ship’s departure and destination ports, as these affect a ship’s costs in terms of fuel costs and required sailing time.

In This Issue

In This Issue

Naive traders and mispricing in prediction markets

This paper studies pricing patterns in a speculative market with asymmetric information populated by both sophisticated and naive traders. Three pricing regimes arise in equilibrium: perfect pricing, with prices equalling asset values, partial mispricing and complete mispricing. Perfect pricing obtains when the presence of naive traders is small although not necessarily zero. When the fraction of naive traders is moderate prices are correct for some values but not for others. Finally, complete mispricing typically arises when the presence of naive traders is sufficiently high. Mispricing exhibits a systematic pattern of overpricing low values and underpricing high values.

New Warrant Issues Valuation with Leverage and Noisy Equity Values

The empirical analysis of new warrant issues in the context of a structural model of the firm typically assumes the absence of debt and a perfect equity pricing model. We examine here an approach relaxing these two assumptions. The proposed approach develops simple analytical expressions for the prices of warrant, debt and equity in the presence of leverage. An empirical strategy is proposed to implement the model with equity prices containing model errors. An illustration with a recent warrant issue deal between Bank of America and Berkshire Athaway is provided.

Day-ahead deregulated electricity market price classification using neural network input featured by DCT

The optimal profit is determined by applying a perfect price forecast. A price forecast with a less prediction errors, yields maximum profits for market players. The numerical electricity price forecasting is high in forecasting errors of various approaches. In this paper, discrete cosine transforms (DCTs) based neural network (NN) approach (DCT–NN) is used to classify the electricity markets of mainland Spain and New York are presented. These electricity price classifications are important because all market participants do not to know the exact value of future prices in their decision-making process. In this paper, classifications of electricity market prices with respect to pre-specified electricity price threshold are used. In this proposed approach, all time series (historical price series) are transformed from time domain to frequency domain using DCT. These discriminative spectral co-efficient forms the set of input features and are classified using NN. The price classification NN and the proposed DCT–NN were developed and compared to check the performance. The simulation results show that the proposed method provides a better and efficient method for day-ahead deregulated electricity market price classification.

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The Simulation of European Call Options’ Sensitivity Based on Black-Scholes Option Formula

As the Stock index futures with Cri 300 index for the subject matter launch, the research to stock options done by China’s financial market is gradually in-depth, which has great significance to the improvement of the financial markets. With the Black-Scholes option formula, this paper attempts to study the sensitivity of single stock’ call option named Industrial and Commercial Bank of China Limited to stock price changes, time changes and the situation that both of them occur. The simulation results were achieved based SAS, which not only has a very important practical significance to the launch of this kind financial derivative and the establish of a perfect pricing model of financial derivatives, but also can help financial market further promote economic growth.

Competition in Multi-Sided Markets: Divide and Conquer

This paper studies Stackelberg price competition in a multi-sided market. The second-mover can engage in divide-and-conquer strategies, which involve cross-subsidies between sides. The paper recovers bounds on profits, and refines the results with a selection criteria whereby consumers resolve coordination failure in favor of a focal platform. It then analyzes perfect price discrimination with network effects, and two-sided market, sheding lights on inefficiencies and strategic choices by platforms. A leading platform may refrain from selling to some side in order to soften competition, it tends to favor excessively balanced market shares and may prefer compatibility to reduce price competition. (JEL D43, D85)

A Perfect Price Discrimination Market Model with Production, and a Rational Convex Program for It

Recent results showing PPAD-completeness of the problem of computing an equilibrium for Fisher's market model under additively separable, piecewise-linear, concave (PLC) utilities have dealt a serious blow to the program of obtaining efficient algorithms for computing equilibria in “traditional” market models, and has prompted a search for alternative models that are realistic as well as amenable to efficient computation. In this paper, we show that introducing perfect price discrimination into the Fisher model with PLC utilities renders its equilibrium polynomial time computable. Moreover, its set of equilibria are captured by a convex program that generalizes the classical Eisenberg-Gale program, and always admits a rational solution. We also give a combinatorial, polynomial time algorithm for computing an equilibrium. Next, we introduce production into our model, and again give a rational convex program that captures its equilibria. We use this program to obtain surprisingly simple proofs of both welfare theorems for this model. Finally, we also give an application of our price discrimination market model to online display advertising marketplaces.

Optimal conservation investment for a biodiversity‐rich agricultural landscape*

This study develops a theoretical and empirical framework for optimal conservation planning using satellite land cover data and economic data from a farm survey. A case study is presented for a region within the South‐west Australia Biodiversity Hotspot (Nature403, 853). This Biodiversity Hotspot is a focus for conservation investment as it combines a relatively high level of biodiversity with severe threat to the biodiversity from agriculture. The conservation planning model developed determines the optimal set of bush fragments for conservation. This model can also be used to assess the trade‐off between the budget and a vegetation species metric. Results from the case study show that, without an effective conservation scheme that at least fences fragments, significant plant biodiversity losses will occur in the North East Wheatbelt Regional Organisation of Councils region of the WA wheatbelt over a 10‐year period. A perfect price discriminating auction scheme could reduce the costs of conservation by around 17 per cent relative to a fixed‐payment scheme; however, a fixed payment on outcome (measured as change in the species metric) scheme represents a viable second‐best alternative, to a conservation auction, where conservation spending is spatially targeted.

The Evolving Price of Perfection

The Evolving Price of Perfection

The Price of Perfection

The Price of Perfection

The price of perfection: Individualism and society in the era of biomedical enhancement, by Maxwell J. Mehlman

Maxwell J. Mehlman, The price of perfection: Individualism and society in the era of biomedical enhancement, Baltimore: The Johns Hopkins University Press, 2009, reviewed by Anita Silvers

<em>The price of perfection: Individualism and society in the era of biomedical enhancement</em>. Maxwell J. Mehlman

<em>The price of perfection: Individualism and society in the era of biomedical enhancement</em>. Maxwell J. Mehlman

The Value of Future Earnings in Perfect Foresight Equilibrium

Abstract The present work considers the problem of valuing a future income stream in a perfect foresight economy. In this setting, with competitive equilibrium in labor and asset markets, market valuation of labor-generated income streams can be very simple. However, it can also be undone by moral hazard, in which case valuation may be based instead on fair compensation. I show that perfect foresight valuation emerges somewhat imperfectly in the forensic economics literature. To apply this type of valuation, the economist must form an expectation E[P] about perfect foresight price P. I consider several models of this expectation, some of which yield standard present value equations. I find that, while standard equations “fit” historical data well in some respects, they miss some dynamics that are better captured by more advanced econometric methods.

Pricing Policy and Partial Collusion

We study the pricing policy equilibria emerging in a partial collusion duopolistic framework where firms in the first stage of the game choose non-cooperatively the pricing strategy (perfect price discrimination or uniform pricing), and from the second stage onward collude on prices. We show that for intermediate discount factors and high firms’ asymmetry, the unique equilibrium is characterized by only the smaller firm choosing price discrimination. In the case of intermediate discount factors and low firms’ asymmetry, there are two possible equilibria: both firms price discriminate or no firm price discriminates. When the discount factor is particularly high or particularly low both firms price discriminate in equilibrium.

Price Discrimination in Two-Sided Markets

We examine the profitability and welfare implications of targeted price discrimination in two-sided markets. First, we show that equilibrium discriminatory prices exhibit novel features relative to discriminatory prices in one-sided models and uniform prices in two-sided models. Second, we compare the profitability of perfect price discrimination, relative to uniform prices in a two-sided market. The conventional wisdom from one-sided horizontally differentiated markets is that price discrimination hurts the firms and benefits consumers, prisoners' dilemma. We show that price discrimination, in a two-sided market, may actually soften the competition. Our results suggest that the conventional advice that price discrimination is good for competition based on one-sided markets may not carry over to two-sided markets.

The price of perfection: individualism and society in the era of biomedical enhancement

Few would question the necessity of artificial limbs for amputees. But what of surgery to lengthen the legs of children who are merely shorter than average? Hardly anyone would challenge the decision to prescribe Aricept to people with dementia. But is it acceptable to give the same medication to airline pilots seeking sharper mental focus on long-haul flights? Humans have engaged in biological self-improvement since long before recorded history, from the impotence-curing wild lotus brew of the ancient Egyptians to the herbal energy drink favored by early Olympians. Now biomedical enhancements are pushing the boundaries of possibility and acceptability. Where do we draw the line? How do we know the true ramifications of pioneering medicine? What price are we willing to pay for perfection? Maxwell J. Mehlman's provocative examination of these issues speaks to fundamental questions of what it means to be human. He finds public officials ill-equipped to handle the ethical, scientific, and public policy quandaries of biomedical enhancement. Instead of engaging difficult questions of morality, access, fairness, and freedom, elected officials have crafted toothless and counterproductive laws and regulations. Mehlman outlines policy options to boost the societal benefits and minimize the risks from these technologies. In the process, he urges the public to face the ethical issues surrounding biomedical enhancement, lest our quest for perfection compromise our very humanity.

Sacrifice ratio dispersion within the Euro Zone: what can be learned about implementing a single monetary policy?

This article focuses on the comparison of sacrifice ratios as an indicator for structural dispersion within the euro area over the period 1972–2003. Estimates of the sacrifice ratio, defined as the cumulative output cost arising from permanent inflation reduction, are obtained using structural VAR models. Results from sub‐period analysis as well as 10‐year‐period rolling estimates lead to two main conclusions. First, empirical evidence displays a recent increase in the average sacrifice ratio, which can be linked to the simultaneous decrease in the average inflation rate: this negative relationship between the initial level of inflation and the cost of disinflation can be seen as a justification for the choice of an inflation objective close to 2% for the European Central Bank (ECB) rather than a target of perfect price stability, potentially very damaging. Second, we cannot provide evidence of any reduction in European sacrifice ratio dispersion, which would suggest that the nominal convergence triggered by the Maastricht Treaty did not involve a true reduction of structural differences. It is likely to be a problem in the stance of a single monetary policy, because structural differences imply asymmetric responses of real national economies to the same monetary impulse.