The strategic behavior of rational novices

There is a growing amount of experimental evidence that suggests people often deviate from the predictions of game theory. Some scholars attempt to explain the observations by introducing errors into behavioral models. However, most of these modifications are situation dependent and do not generalize. A new theory, called the rational novice model, is introduced as an attempt to provide a general theory that takes account of erroneous behavior. The rational novice model is based on two central principals. The first is that people systematically make inaccurate guesses when they are evaluating their options in a game-like situation. The second is that people treat their decisions similar to a portfolio problem. As a result, non optimal actions in a game theoretic sense may be included in the rational novice strategy profile with positive weights.

The rational novice model can be divided into two parts: the behavioral model and the equilibrium concept. In a theoretical chapter, the mathematics of the behavioral model and the equilibrium concept are introduced. The existence of the equilibrium is established. In addition, the Nash equilibrium is shown to be a special case of the rational novice equilibrium. In another chapter, the rational novice model is applied to a voluntary contribution game. Numerical methods were used to obtain the solution. The model is estimated with data obtained from the Palfrey and Prisbrey experimental study of the voluntary contribution game. It is found that the rational novice model explains the data better than the Nash model. Although a formal statistical test was not used, pseudo R^2 analysis indicates that the rational novice model is better than a Probit model similar to the one used in the Palfrey and Prisbrey study.

The rational novice model is also applied to a first price sealed bid auction. Again, computing techniques were used to obtain a numerical solution. The data obtained from the Chen and Plott study were used to estimate the model. The rational novice model outperforms the CRRAM, the primary Nash model studied in the Chen and Plott study. However, the rational novice model is not the best amongst all models. A sophisticated rule-of-thumb, called the SOPAM, offers the best explanation of the data.

Cooperative and market-based solutions to pollution abatement problems

This work concerns itself with the possibility of solutions, both cooperative and market based, to pollution abatement problems. In particular, we are interested in pollutant emissions in Southern California and possible solutions to the abatement problems enumerated in the 1990 Clean Air Act. A tradable pollution permit program has been implemented to reduce emissions, creating property rights associated with various pollutants.

Before we discuss the performance of market-based solutions to LA's pollution woes, we consider the existence of cooperative solutions. In Chapter 2, we examine pollutant emissions as a trans boundary public bad. We show that for a class of environments in which pollution moves in a bi-directional, acyclic manner, there exists a sustainable coalition structure and associated levels of emissions. We do so via a new core concept, one more appropriate to modeling cooperative emissions agreements (and potential defection from them) than the standard definitions.

However, this leaves the question of implementing pollution abatement programs unanswered. While the existence of a cost-effective permit market equilibrium has long been understood, the implementation of such programs has been difficult. The design of Los Angeles' REgional CLean Air Incentives Market (RECLAIM) alleviated some of the implementation problems, and in part exacerbated them. For example, it created two overlapping cycles of permits and two zones of permits for different geographic regions. While these design features create a market that allows some measure of regulatory control, they establish a very difficult trading environment with the potential for inefficiency arising from the transactions costs enumerated above and the illiquidity induced by the myriad assets and relatively few participants in this market.

It was with these concerns in mind that the ACE market (Automated Credit Exchange) was designed. The ACE market utilizes an iterated combined-value call market (CV Market). Before discussing the performance of the RECLAIM program in general and the ACE mechanism in particular, we test experimentally whether a portfolio trading mechanism can overcome market illiquidity. Chapter 3 experimentally demonstrates the ability of a portfolio trading mechanism to overcome portfolio rebalancing problems, thereby inducing sufficient liquidity for markets to fully equilibrate.

With experimental evidence in hand, we consider the CV Market's performance in the real world. We find that as the allocation of permits reduces to the level of historical emissions, prices are increasing. As of April of this year, prices are roughly equal to the cost of the Best Available Control Technology (BACT). This took longer than expected, due both to tendencies to mis-report emissions under the old regime, and abatement technology advances encouraged by the program. Vve also find that the ACE market provides liquidity where needed to encourage long-term planning on behalf of polluting facilities.

Nanophotonic Light Trapping In Thin Solar Cells

Over the last several decades there have been significant advances in the study and understanding of light behavior in nanoscale geometries. Entire fields such as those based on photonic crystals, plasmonics and metamaterials have been developed, accelerating the growth of knowledge related to nanoscale light manipulation. Coupled with recent interest in cheap, reliable renewable energy, a new field has blossomed, that of nanophotonic solar cells.

In this thesis, we examine important properties of thin-film solar cells from a nanophotonics perspective. We identify key differences between nanophotonic devices and traditional, thick solar cells. We propose a new way of understanding and describing limits to light trapping and show that certain nanophotonic solar cell designs can have light trapping limits above the so called ray-optic or ergodic limit. We propose that a necessary requisite to exceed the traditional light trapping limit is that the active region of the solar cell must possess a local density of optical states (LDOS) higher than that of the corresponding, bulk material. Additionally, we show that in addition to having an increased density of states, the absorber must have an appropriate incoupling mechanism to transfer light from free space into the optical modes of the device. We outline a portfolio of new solar cell designs that have potential to exceed the traditional light trapping limit and numerically validate our predictions for select cases.

We emphasize the importance of thinking about light trapping in terms of maximizing the optical modes of the device and efficiently coupling light into them from free space. To further explore these two concepts, we optimize patterns of superlattices of air holes in thin slabs of Si and show that by adding a roughened incoupling layer the total absorbed current can be increased synergistically. We suggest that the addition of a random scattering surface to a periodic patterning can increase incoupling by lifting the constraint of selective mode occupation associated with periodic systems.

Lastly, through experiment and simulation, we investigate a potential high efficiency solar cell architecture that can be improved with the nanophotonic light trapping concepts described in this thesis. Optically thin GaAs solar cells are prepared by the epitaxial liftoff process by removal from their growth substrate and addition of a metallic back reflector. A process of depositing large area nano patterns on the surface of the cells is developed using nano imprint lithography and implemented on the thin GaAs cells.