Pricing Principles Research Articles

The role of electricity market design for energy storage in cost-efficient decarbonization

The role of electricity market design for energy storage in cost-efficient decarbonization

Design and Pricing of Wenzhou Geological Disaster Risk Bond

In this paper, the direct economic losses of geological disasters in Wenzhou from 2007 to 2021 are taken as the sample data, and according to the distribution characteristics of geological disasters, considering the moral hazard, the yield and price of geological disaster bonds are calculated by using capital asset pricing model (CAPM) and bond pricing principle, so as to carry out the preliminary design of geological disaster risk bonds. Finally, based on China's market environment, this paper puts forward some suggestions on how to promote the securitization mechanism of catastrophe insurance and improve the catastrophe insurance market.

Raising the Resilience of Industrial Manufacturers through Implementing Natural Gas-Fired Distributed Energy Resource Systems with Demand Response

The use of relatively small-scale distributed electric power generation sources is one of the key focus areas in the development of global industry and regional power generation. By integrating distributed generation sources into their on-site energy infrastructure, industrial consumers gain new characteristics and possibilities as entities of the power system that do not only consume power, but in fact can flexibly generate and deliver electricity to local and even centralized grids. This type of entity is called a distributed energy resource system with demand response (Russian: ‘active energy complex’). The purpose of this study is to lay the methodological foundation for the use of distributed energy resource systems with demand response in industrial sites under existing gas and power market conditions and for ensuring the synchronization of parameters that is necessary for managing complex energy consumption. This article provides an empirical study of the principles of the natural gas pricing under the demand volatility of regional markets and the Russian Mercantile Exchange. The article outlines the key drivers, as identified by the authors, that impact gas consumption by a distributed energy resource system, including demand characteristics, limitations and capacity of the gas network and the mode of gas consumption by an industrial enterprise and its generator. Accounting for all of these factors is essential for effective management and proper operational adjustment of a distributed energy resource system with demand response. The result of the study is a proprietary model and a tool for the management of distributed energy resource systems in integration with the gas demand management, which analyze the internal and external parameters of the industrial entity’s operations and its distributed energy resource system, as well as factors existing in the integrated distributed energy system where the consumer is able to buy natural gas in various market segments. The proprietary tool of distributed energy resource system management is based on the centralized control system, which combines performance analytics, operational scheduling of production and the distributed energy resource system, price planning for the wholesale and retail power markets, regional gas markets and exchange, monitoring all elements of the system, and assessment of different active energy management scenarios under various external and internal conditions impacting production and energy demand. Our proprietary tool has been successfully tested in a typical industrial site and was reported to deliver a significant electricity and gas cost-saving effect, which amounted to an 18 percent reduction in the total energy costs of the company, or more than USD 2.6 million per year. The resulting saving effect can recoup the costs of investing in a distributed energy resource system, including construction and installation of the local grid and automation infrastructure, and can be obtained in any country of the world.

The Price is Right? An Economic Analysis of Factors Influencing Cosmetic Surgery Prices.

Cosmetic surgery is a large portion of practice revenue for many plastic surgeons, and therefore understanding the economic principles of pricing is critical. While national averages provide a starting point for price determination, they may not reflect specific economic factors. Over the last decade, publicly reported pricing for cosmetic surgery has increased in prevalence, improving price transparency for patients and surgeons alike. This study aims to compare publicly reported prices to national cosmetic surgery averages and identify variables that have the greatest impact on price determination. An internet search was performed using the term "cosmetic surgery, price" for practices that publicly reported cosmetic surgery prices. Publicly reported prices were compared to national averages generated from the Aesthetic Society Plastic Surgery National Databank Statistics. The impact of regional prices, practice type, and surgeon accreditation were analyzed for the most popular cosmetic surgery procedures. Sixty-six practices were identified that reported cosmetic surgery pricing information. Publicly reported prices were significantly higher for all surgical procedures except "Nipple" procedures, "Excision of [Excess] Skin," "Fat Grafting," "Fat Harvest," and "Lip Enhancement." Facility/OR fees (n = 38) and anesthesia fees (n = 34) were the most common component included in a price, after surgeons' fees (n = 66). A significant price difference was appreciated when separating practices by region for all procedures except "Breast Augmentation" (p = 0.074) and "Liposuction" (p = 0.088). Publicly reported prices provide greater insight than national averages into specific pricing factors and strategies that can be employed when setting surgical prices.

What opportunities opens up for industrial enterprises the purchase of natural gas on the commodity exchange

Over the past 15 years, the fuel and energy complex of the Russian Federation has undergone significant systemic and structural changes. The need to implement changes is dictated by external challenges from the global energy markets, in the functioning of which the Russian economy plays a key role, as well as internal challenges, emerging in the form of requests from all sectors of the economy for the need to reduce the cost of consumed energy resources, and the need to increase the efficiency of the economy. Since 2006, a wholesale electricity (capacity) market has been operating in Russia, the mechanisms of which are based on the principle of competitive pricing for electricity supplied to consumers. Participation in the wholesale market for industrial enterprises opens up the possibility of reducing the cost of purchasing electricity, in the form of excluding the payment for the services of regional guaranteeing suppliers, whose share can range from 3% to 8% of the final electricity tariffs. Positive experience in creating competitive relations in the electric power industry determined the possibility for introducing energy market mechanisms into the Russian gas supply industry. In 2014, competitive natural gas trading was launched in Russia as part of the Commodity Exchange, in which large consumers and independent suppliers can participate.

Analisis Pengelolaan Keuangan (Studi Analisis Target Costing Dalam Meningkatkan Laba Pada Kaka Cake Jambi)

This research is entitled Financial Management Analysis (Target Costing Analysis Study in Increasing Profit at Kaka Cake Jambi City). The research method used by the researcher is a qualitative approach. The results of this study are: (1) Business management of Kaka Cake Jambi broadly consists of product management, price, marketing and business income details of Kaka Cake Jambi. In terms of products, most of the products produced by Kaka Cake Jambi are dessert boxes with 20 flavors. The price of Jambi's Kaka Cake products ranges from Rp.29,000 - Rp.38,000. Meanwhile, the promotion carried out by Kaka Cake Jambi is through social media such as Facebook, Instagram and marketplace where the wider community will be able to find products easily. In one month, Mrs. Yolanda's income from this Kaka Cake business reaches approximately 200 million per month, with a monthly profit of 40 million to 60 million per month. (2) The target costing method applied to the making of the Jambi Cake Kaka Dessert Box in determining the selling price of the dessert box, Kaka Cake applies the pricing principle by looking at the market price and the purchasing power of consumers to determine the selling price of the dessert box. At this stage of determining the profit target, Kaka Cake Jambi is targeting a profit of approximately 100% of production costs. Kaka Cake targets a profit of Rp.10,000 to Rp.20,000 for each variant of the dessert box produced. With this profit target, Kaka Cake Jambi must determine the target cost in accordance with the profit target to be obtained. While the maximum cost target that needs to be spent by Kaka Cake Jambi for the Dessert Box variant of Cheese Krunchy is Rp. 10,000, Kaka Cake can minimize costs so that profits are maximized or more than Rp. 19,000. (3) The target costing method applied by Kaka Cake in the production of dessert boxes is quite effective in obtaining an optimal level of profit. It is said to be quite effective because the profits obtained do not reach 100% of production costs as targeted for profit targets, this is due to the labor costs that must be incurred by Kaka Cake Jambi of Rp.17,200,000 per month for 9 employees.

Disputas contables en el Banco de España en 1859: valoración a precios de mercado vs valoración a precio de adquisición, el devengo y otras cuestiones

En el presente artículo se abordan los antecedentes cercanos a la constitución del Banco de España - 1856-, partiendo de su antecesor el Banco Español de San Fernando, si bien su origen realmente se encuentra en 1782 con la fundación del Banco de San Carlos. Asimismo se analizan los cambios bancarios iniciados en esa época como consecuencia de un nuevo marco normativo. Esa configuración determinaría la base de donde arranca la banca española actual.
 El entorno económico fue impulsado por una legislación en varios frentes más favorable, lo que facilitó la entrada de capitales extranjeros como vía de fomento en el desarrollo económico del país.
 En un nuevo orden, la situación tradicional de supremacía del Banco de España en el sistema bancario se ve reducida y aumenta la presión por nuevos competidores directos, las Sociedades de Crédito, auténticos Bancos Privados bajo otra denominación. Por otro lado, el Banco debe aprender a asumir una oposición en las Juntas de accionistas a sus criterios de gestión, administración y contabilidad.
 Las pretensiones de los accionistas, algunas de ellas compartidas por individuos de los Órganos de gobierno del Banco de España, respecto a valoraciones del Balance a precios de mercado en Deuda e inmuebles, en contra del vigente principio del precio de adquisición; mayores exigencias de información contable; el modo de aplicar el principio del devengo e incluso los propios modelos de Balances publicados, fueron temas candentes con un trasfondo contable. Estos temas, incluso llevaron a pensar en renunciar al mismo Gobernador, máximo responsable de la Institución, y cuyo nombramiento correspondía al Gobierno y no a los accionistas.
 Al hilo de temas contables también otros supusieron debates y réplicas por parte del Banco en defensa de su actuación, y conservación de su reputación.
 Parece que en los tiempos actuales muchos de los argumentos que pueden utilizarse en defensa de unos fundamentos contables y en contra de otros, están superados. Sin embargo, la conclusión es que las mismas razones que aquellos esgrimían no ha mucho tiempo se han vuelto a escuchar con motivo de la aceptación de las Normas Internacionales de Contabilidad (NIC) en Europa. Unos 150 años después, de alguna manera, la cera sigue ardiendo en el candil de las controversias.

Pricing Principle via Tsallis Relative Entropy in Incomplete Markets

A pricing principle is introduced for nonattainable -exponential bounded contingent claims in an incomplete Brownian motion market setting. The buyer evaluates the contingent claim under the “distorted Radon–Nikodym derivative” and adjustment by Tsallis relative entropy over a family of equivalent martingale measures. The pricing principle is proved to be a time consistent and arbitrage-free pricing rule. More importantly, this pricing principle is found to be closely related to backward stochastic differential equations with generators of type. The pricing functional is compatible with prices for attainable claims. Except translation invariance, the pricing principle possesses lots of elegant properties, such as monotonicity and concavity. The pricing functional is shown between minimal martingale measure pricing and conditional certainty equivalent pricing under -exponential utility. The asymptotic behavior of the pricing principle for the ambiguity aversion coefficient is also investigated.

A risk-neutral approach to the RAROC method of loan pricing using account-level data

PurposeThis paper has used account-level data of corporate and retail borrowers, assessed their credit risk through the risk-neutral principle and examined its implication on loan pricing.Design/methodology/approachIt derives the capital charge and credit risk-premium for expected and unexpected losses through a risk-neutral approach. It estimates the risk-adjusted return on capital as the pricing principle for loans. Using GMM regression, the article has assessed the determinants of risk-based pricing.FindingsIt has been found that risk-premium is not reflected in the current loan pricing policy as per Basel II norms. However, the GMM estimation on RAROC can price risk premium and probability of default, LGD, risk weight, bank beta and capital adequacy, which are the prime determinants of loan pricing. The average RAROC for retail loans is more than that of corporate loans despite the same level of risk capital requirement for both categories of loans. The robustness tests indicate that the RAROC method of loan pricing and its determinants are consistent against the time and type of borrowers.Research limitations/implicationsThe RAROC method of pricing effectively assesses the inherent risk associated with loans. Though the empirical findings are confined to the sample bank, the model can be used for any bank implementing the Basel principle of risk and capital assessments.Practical implicationsThe article has developed and validated the model for estimating RAROC, as per Basel II guidelines, for loan pricing that any bank can use.Social implicationsIt has developed the risk-based loan pricing model for retail and corporate borrowers. It has significant practical utility for banks to manage their risk, reduce their losses and productively utilise the public deposits for societal developments.Originality/valueThe article empirically validated the risk-neutral pricing principle using a unique 1,520 retail and corporate borrowers dataset.

Capacity Allocation of Unmonitored Railway Yards

The demand for railway service facilities in Europe has been rapidly increasing, prompting for more conflicts in capacity requests by railway undertakings. In Sweden, many of these facilities do not have any automatic monitoring possibilities and the infrastructure manager does not have accurate or real-time information about vehicles occupying the tracks. This introduces challenges in having efficient capacity utilization in such facilities. This paper proposes a framework for capacity allocation for facilities which are currently unmonitored in general and for railway yards in specific. The framework is proposed upon assessment of the feasibility of emerging technologies in monitoring railway service facilities, as well as evaluating the current capacity allocation process and the suitability of different pricing principles as a basis for a charging scheme for capacity reservation.

STUDY OF THE MECHANISM FOR THE IMPLEMENTATION OF THE TRIUNE CONCEPT IN THE PROCESS OF THE FORMATION OF A GREEN ECONOMY

The purpose of this article is to comprehend and analyze two closely interconnected categories - green economy and sustainable development - in the context of the current state of socio-economic development of society. These two economic forms - the green economy and sustainable development - from an economic and historical point of view, function in two parallel planes: sustainable development is a dynamic process that is realized only in the process of movement and formation of new forms and types of production in Azerbaijan, while the green economy involves research environmental taxation, i.e. introduction of green taxes; environmental liability, its insurance; the market for permits and quotas for production waste, the search for effective combinations of economic, social and environmental instruments; improvement of new pricing principles in line with the principles of green economy and sustainable development; research and use of the experience of foreign countries in this area.

Особливості обліку розрахунків у сфері е-комерції віртуальними активами (криптовалютою): міжнародний та вітчизняний досвід

Over the past few years, the term «cryptocurrency» has firmly entered the public consciousness. Virtual assets are gaining popularity because of their main advantages: availability, anonymity, the ability to make quick money, etc. Cryptocurrency is a code in a large book called «blockchain». Owing to the fact that the technology of «blockchain» is inherently similar to an accounting book, the world’s leading scientists are studying the issue of its implementation in the accounting system. This would allow to record each transaction automatically, reduce the cost and increase the speed of transactions. The article discusses the issue of accounting for settlements in the field of e-commerce using speculative assets. The regulatory framework for taxation of transactions with cryptocurrencies in Ukraine is analyzed. Several approaches to accounting for transactions with risky assets in Ukraine are proposed. The results of the study provide a detailed assessment of the situation in the international trade market and the state of development of settlements using cryptocurrencies, highlights the problematic aspects of normative regulation and accounting for transactions with risky assets in Ukraine and over the world. The field of e-commerce includes all transactions carried out via the Internet. This is indeed doing business online, i. e., by means of websites, social networks or mobile applications. The introduction of a method of making payments with cryptocurrency will greatly simplify the processing of transactions. This payment in digital currency is delivered anywhere in the world, regardless of the place of departure without intermediaries. At this, the cost of the transaction, or the payment fee, is much lower than with a regular bank transfer. The cryptocurrency market is currently quite volatile, classifying transactions with digital assets as «high-risk». The introduction of cryptocurrencies as a full-fledged means of payment is impossible without market regulation by financial institutions. Until that happens, commodity prices in cryptocurrency can fluctuate up to 25% compared to the previous day. Trading under such price conditions is impossible. However, a type of cryptocurrency such as «stablecoins» is protected from market fluctuations, since their pricing principle is based on the exchange rate of the real currency. For example, the USDT stablecoin is pegged to the US dollar, so its value changes along with the value of the real currency. In this case, an electronic currency such as USDT can be considered a means of payment and used in e-commerce.

ТЕОРЕТИЧНІ ЗАСАДИ ФУНКЦІОНУВАННЯ РИНКУ СІЛЬСЬКОГОСПОДАРСЬКОЇ ТЕХНІКИ

The article considers and analyzes the views of domestic and foreign scholars on the theoretical definition of the market in general and the agricultural machinery market in particular, and forms a critical assessment of their statements. A detailed analysis of the place of each subject of market relations and their impact on the functioning of the market is carried out. The author emphasizes the special place occupied by financial institutions and agricultural producers in market relations. The author emphasizes the need to direct the efforts of agricultural machinery market participants to ensure the most favorable conditions for the activities of agricultural enterprises as the main source of effective activity of each of the participants. The essence of the market is defined through its functions and principles. In modern conditions, the market performs the following functions: intermediary, pricing, information, regulatory, stimulating, and health-improving. The principles on which the market economy is based are: the principle of freedom of economic and entrepreneurial activity of an individual, family, social group, enterprise in all spheres of life within the framework of the rule of law; the principle of state regulation of the market and market relations; the principle of market pricing; the principle of contractual relations; the principle of openness of the economy; the principle of competition. The development and formation of the agricultural machinery market is influenced by historical processes, as well as by socio-economic factors which define it as an integral system of interdependent components which are united for one purpose - to make a profit. Based on a critical assessment of the definition of the essence of the category “market”, analysis of research by classical and contemporary economists, both domestic and foreign, the concept of the agricultural machinery market should be interpreted as a set of relations between producers, sellers (dealers), financial institutions, logistics companies and the State, on the one hand, and buyers, on the other, regarding the purchase, operation and repair of agricultural machinery to maximize the economic effect of all parties to the relations.

Ценовые параметры поставки электроэнергии как базис управления спросом на электропотребление в регионе

Energy cost management (more than 45 % in the structure of total costs) can significantly reduce own energy supply costs and improve operational efficiency of an enterprise. The study examines regional electricity price parameters, affected by retail and wholesale electricity markets, in terms of the possibilities for industrial enterprises to implement price-dependent demand management to reduce energy purchase costs. The article aims to distribute Russian regions according to the prospects for reducing energy purchase costs by managing electricity demand schedules. The following methods were utilised: statistical analysis of hourly average electricity prices per year, month and day in the regional context; mathematical modelling and calculation of authors’ coefficients of average electricity prices and coefficients of daily price volatility for assessing prospects for effective energy demand management in Russian regions; construction of positioning maps for grouping and identifying regions where the implementation of price-dependent demand management is possible. Electricity price parameters of all Russian regions were examined. The paper analysed principles of electricity pricing for domestic industrial enterprises, researched the impact of price volatility on energy purchase costs, assessed the contribution of electricity costs to total energy consumption costs of enterprises. Coefficients of average electricity prices, coefficients of daily price volatility and coefficients of efficiency of price-dependent electricity consumption were applied to study electricity price parameters in the regional context. As a result, the article presented a map of electricity price parameters, where regions are grouped according to the possibility of implementing demand management mechanisms. Additionally, specific practical recommendations on price-dependent demand management for electricity consumption of industrial enterprises were given for each identified regional group.

Solution Proposals based on Fuzzy AHP-TOPSIS Hybrid Model to the Problems in Public Works Procurement in Turkey

In the transition from price-based bid evaluation to multi-criteria bid evaluation process in public procurements pioneered by academic research, the aim is to ensure the delivery of the project at the desired quality without exceeding the time and budget of the contract process. In the tenders made according to the Public Procurement Law (PPL), while the lowest price principle was used in the bid evaluation stage, non-price elements began to be used in time. In this study, solutions to current problems such as the evaluation of extremely low bids in the tenders made within the scope of the law, the long duration of the bid evaluation process, and the high number of conflicts are proposed through the model created by Fuzzy AHP-TOPSIS methods.

Optimal design for network mutual aid

AbstractNetwork mutual aid platforms is one of the popular risk-sharing models in recent years, and they have almost 200 million members in China. However, current mutual aid platforms does not satisfy the actuarial rules in either the apportionment method or the pricing principle. Hence, a variety of mutual aid models which enable mutual aid members with different risks to exchange their risks in a transparent and actuarial fair way have been proposed in this paper. Besides, the decision-making frameworks for participants choosing between the mutual aid platform and similar insurance products, or choosing no risk sharing are constructed, respectively. Decisions are made based on the principle of maximizing expected utility. Moreover, the optimization problems of maximizing profit and minimizing risk are constructed, respectively. Through the principle of individual fairness and relative fairness, the problem of adverse selection of the platform can also be reduced. Finally, the actual mutual aid plan is compared with similar insurance products to discuss the advantages of the optimized plan.

Bi-level optimal scheduling of virtual energy station based on equal exergy replacement mechanism

Integrated Demand Response (IDR) is an effective way to make full use of the resources of the integrated energy system (IES) to achieve a positive interaction between supply and demand. Energy cascade utilization is one of the important technical principles of the IES to improve energy utilization efficiency and realize comprehensive benefit optimization. The design of an incentive mechanism is an important prerequisite for realizing IDR. When formulating the incentive mechanism, the coupling between the conversion efficiency of multiple energy sources and the depreciation of energy quality in the process of energy cascade utilization should be comprehensively considered. The exergy is the index that can evaluate the engineering value of any form of energy. Therefore, this paper unifies the multiple heterogeneous energy sources in the IES in the form of exergy through the energy quality coefficient. To more accurately reflect the difference in energy value of multiple heterogeneous energy sources during the time of invocation, an equal exergy replacement mechanism is designed according to the principle of high energy quality and high price. The regulated energy of the customer participating in the IDR is stored in the form of exergy, and the customer can exchange any form of energy at any time under the same exergy. On this basis, a bi-level optimal scheduling model for virtual energy station (VES) to participate in the day-ahead market is established, which realizes the improvement of multi-subject interests. And use Information Gap Decision Theory (IGDT) to deal with the risks posed by uncertainty in day-ahead market prices. Finally, the case study shows that the designed incentive mechanism can further reduce the energy purchase cost of customers, and VES can obtain higher benefits than only providing internal energy sales services. The IGDT method can reduce operational risk, which verifies the feasibility of the method.

Features of Antimonopoly Regulation in the Hospitality Industry

The article is devoted to the study of the role of competition law in the development of the hospitality industry in Russia in the first half of 2022. We considered the issue of regulating prices for services, the basic principles of dynamic pricing in the hospitality industry, as well as the peculiarities of the control of this industry by the state. Based on the findings of the study, a way to increase the transparency of pricing by developing a provision on dynamic tariffs in the hospitality industry is proposed.

A Dynamic Evaluation of Ecosystem Services Value in the Beijing–Tianjin–Hebei Region Based on Scarcity Modification of Spatiotemporal Supply–Demand Influence

It is of great significance to study the spatiotemporal differences between supply and demand of regional ecosystem services (ES) and evaluate the dynamic impact of changes in supply and demand on the ecosystem services value (ESV) so as to provide scientific guidance for human activities and maintain healthy ecosystem development. This study proposes a novel method to calculate the scarcity value of ecosystem service (SESV) as a function of the temporal and spatial changes in supply and demand to divided ecological zones with differentiated land-use strategies. Then, it explores the changes in ESV and SESV in the Beijing–Tianjin–Hebei (BTH) region from 2000 to 2015. Firstly, the native ecosystem services value (NESV) and demand of ES in the BTH region were evaluated. Secondly, the spatiotemporal influence mechanism of supply and demand on ESV was analyzed according to the equilibrium price principle of supply and demand in economics, and a model for evaluating the SESV was constructed on the basis of supply and demand. Lastly, the ecological zoning method was proposed for of the BTH region. Result shows that the NESV in the BTH region was 2775.54 billion CNY in 2000, and it decreased to 2722.44 billion CNY in 2015. Taking into account the changes in supply and demand, the SESV in 2015 was 2884.85 billion CNY. Secondly, the NESV in 2000 and 2015 and the SESV in 2015 exhibited a gradual downward trend from north to south. Lastly, according to the changes in ecosystem service supply and demand and NESV/SESV in the BTH region, the ecological zones of the BTH region were divided, and differentiated land-use policies were put forward. The research can not only enrich ESV evaluation theories and methods, but also provide a scientific basis for the coordinated development of the BTH region and promote regional ecological civilization construction strategies.

Distribution Locational Marginal Pricing (DLMP) for Unbalanced Three-Phase Networks

This paper applies the principles of distribution locational marginal pricing (DLMP) to unbalanced three-phase distribution networks. We first propose a linear model for AC optimal power flow derived through a series of approximation and reformulation techniques. Then a scenario-generation algorithm is proposed to properly model the uncertain parameters in the linear model. Through a proposed No U-Turn sampler (NUTS) based algorithm, probability density functions (PDFs) of DLMPs are calculated. These PDFs provide statistical information about the locational and temporal price risks. By means of applications to two IEEE unbalanced test networks, the numerical results show promising performance for the proposed linear model and the NUTS-based algorithm in creating PDFs of DLMPs. DLMP price densities will be increasingly useful as distribution system operators seek flexible, low risk solutions from embedded generators and aggregators of distributed energy resources.