Cost-Saving production technologies and strategic delegation

This work analyzes a managerial delegation model in which firms that produce a differentiated good can choose between two production technologies: a low marginal cost technology and a high marginal cost technology. For the former to be adopted more investment is needed than for the latter. By giving managers of firms an incentive scheme based on a linear combination of profit and sales revenue, we find that Bertrand competition provides a stronger incentive to adopt the cost-saving technology than the strict profit maximization case. However, the results may be reversed under Cournot competition. We show that if the degree of product substitutability is sufficiently low (high), the incentive to adopt the cost-saving technology is larger under strict profit maximization (strategic delegation).

Profit and Cost in "Modern" Post-Marxian Profit Theory: A Case Study from Varian's "Intermediate Microeconomics"

In this paper, I examine the treatment of competitive profit of professor Varian in his textbook on Microeconomics, as a representative of the “modern” post-Marxian view on competitive profit. I show how, on the one hand, Varian defines profit as the surplus of revenues over cost and, thus, as a part of the value of commodities that is not any cost. On the other hand, however, Varian defines profit as a cost, namely, as the opportunity cost of capital, so that, in competitive conditions, the profit or income of capital is determined by the opportunity cost of capital. I argue that this second definition contradicts the first and that it is based on an incoherent conception of opportunity cost.

Profit as Cost versus Profit as Surplus over Cost: A Case Study on Varian's "Intermediate Microeconomics"

On the analysis of Varian’s textbook on Microeconomics, which I take to be a representative of the standard view, I argue that Varian provides two contrary notions of profit, namely, profit as surplus over cost and profit as cost. Varian starts by defining profit as the surplus of revenues over cost and, thus, as the part of the value of commodities that is not any cost; however, he provides a second definition of profit as a cost, namely, as the opportunity cost of capital. I also argue that the definition of competitive profit as the opportunity cost of capital involves a self-contradictory notion of opportunity cost.

Understanding the ex-ante cost of liquidity in the limit order book: A note

This paper estimates a new measure of liquidity costs in a market driven by orders. It represents thecost of simultaneously buying and selling a given amount of shares, and it is given by a single measure of ex-ante liquidity that aggregates all available information in the limit order book for a given number of shares. The cost of liquidity is an increasing function relating bid-ask spreads with the amounts available for trading. This measure completely characterizes the cost of liquidity of any given asset. It does not suffer from the usual ambiguities related to either the bid-ask spread or depth when they are considered separately. On the contrary, with a single measure, we are able to capture all dimensions of liquidity costs on ex-ante basis.

Optimización dinámica con información híbrida: dos casos prácticos

[ES] La programación dinámica es un método de optimización de sistemas o de su representación matemática, donde se opera por fases, es decir, las decisiones se toman en forma secuencial.

The reverse self-dual serial cost-sharing rule

In this study we define a cost sharing rule for cost sharing problems. This rule is related to the serial cost-sharing rule defined by Moulin and Shenker (1992). We give some formulas and axiomatic characterizations for the new rule. The axiomatic characterizations are related to some previous ones provided by Moulin and Shenker (1994) and Albizuri (2010).

Design of an optimised wheel profile for rail vehicles operating on two track gauges

This paper sets out an optimum synthesis methodology for wheel profiles of railway vehicles in order to secure good dynamic behaviour with different track configurations. Specifically, the optimisation process has been applied to the case of rail wheelsets mounted on double gauge bogies, that move over two different gauges, which also have different types of rail: the Iberian gauge (1668 mm) and the UIC gauge (1435 mm). Optimisation is performed using Genetic Algorithms and traditional optimisation methods in a complementary way. The objective function used is based on an ideal equivalent conicity curve which ensures good stability on straight sections and also proper negotiation of curves. To this end the curve is constructed in such a way that it is constant with a low value for small lateral wheelset displacements (with regard to stability), and increases as the displacements increase (to facilitate negotiation of curved sections). Using this kind of ideal conicity curve also enables a wheel profile to be secured where the contact points have a larger distribution over the active contact areas, making wear more homogeneous and reducing stresses. The result is a wheel profile with a conicity that is closer to the target conicity for both gauges studied, producing better curve negotiation while maintaining good stability on straight sections of track. The paper shows the resultant wheel profile, the contact curves it produces, and a number of dynamic analyses demonstrating better dynamic behaviour of the synthesised wheel on curved sections with respect to the original wheel.

Design and Development of a Low-Cost Optical Current Sensor

In this paper we demonstrate the design of a low-cost optical current sensor. The sensor principle is the Faraday rotation of a light beam through a magneto-optical material, SF2, when a magnetic field is present. The prototype has a high sensitivity and a high linearity for currents ranging from 0 up to 800 A. The error of the optical fibre sensor is smaller than 1% for electric currents over 175 A.

Cost effectiveness of a combination of instruments for global warming: a quantitative approach for Spain

Climate change is an important environmental problem and one whose economic implications are many and varied. This paper starts with the presumption that mitigation of greenhouse gases is a necessary policy that has to be designed in a cost effective way. It is well known that market instruments are the best option for cost effectiveness. But the discussion regarding which of the various market instruments should be used, how they may interact and what combinations of policies should be implemented is still open and very lively. In this paper we propose a combination of instruments: the marketable emission permits already in place in Europe for major economic sectors and a CO(2) tax for economic sectors not included in the emissions permit scheme. The study uses an applied general equilibrium model for the Spanish economy to compute the results obtained with the new mix of instruments proposed. As the combination of the market for emission permits and the CO(2) tax admits different possibilities that depend on how the mitigation is distributed among the economic sectors, we concentrate on four possibilities: cost-effective, equalitarian, proportional to emissions, and proportional to output distributions. Other alternatives to the CO(2) tax are also analysed (tax on energy, on oil and on electricity). Our findings suggest that careful, well designed policies are needed as any deviation imposes significant additional costs that increase more than proportionally to the level of emissions reduction targeted by the EU.

Intermediate serial cost-sharing rules

In this paper we give a generalization of the serial cost-sharing rule defined by Moulin and Shenker (1992) for cost sharing problems. According to the serial cost sharing rule, agents with low demands of a good pay cost increments associated with low quantities in the production process of that good. This fact might not always be desirable for those agents, since those cost increments might be higher than others, for example with concave cost functions. In this paper we give a family of cost sharing rules which allocates cost increments in all the possible places in the production process. And we characterize axiomatically each of them by means of an axiomatic characterization related to the one given for the serial cost-sharing rule by Moulin and Shenker (1994).

Cost effectiveness of a combination of instruments for global warming: a quantitative approach for Spain

4 p.

Which policy option can be more cost-effective in promoting the use of energy efficient appliances in Europe? A comparison of energy taxes, subsidies, tax credits and bans.

4 p.

Economic Assessment of Forest Ecosystem Services Losses: Cost of Policy Inaction

52 p.

Recursos de combustible en central nuclear de fusión en el País Vasco

[ES]Este trabajo surge de la inquietud del alumno sobre la energía nuclear y mas concretamente sobre la energía de fusión. Esta inquietud se plasma en una recopilación de información sobre los combustibles necesarios , su abundancia y su forma de obtención actual. Analizaremos la posibilidad de implantar alguna de estas plantas de combustible en el País Vasco, junto con un estudio de una posible central nuclear de fusión con la suma de la potencia de cada uno de los reactores de fisión que se encuentran actualmente en funcionamiento en el estado Español. Compararemos las cantidades de combustible necesarias en un año de uranio y el combustible de fusión, así como el coste de construcción de cada una.

The minimal overlap cost sharing rule

In this paper we introduce a new cost sharing rule-the minimal overlap cost sharing rule-which is associated with the minimal overlap rule for claims problems defined by O'Neill (1982). An axiomatic characterization is given by employing a unique axiom: demand separability. Variations of this axiom enable the serial cost sharing rule (Moulin and Shenker, 1992) and the rules of a family (Albizuri, 2010) that generalize the serial cost sharing rule to be characterized. Finally, a family that includes the minimal overlap cost sharing rule is defined and obtained by means of an axiomatic characterization.