Maximum-revenue tariff with different roles in a price-setting competition

Published also at Lecture Notes in Engineering and Computer Science

Desirable role in a price-setting international mixed duopoly

In this paper, we study the order of moves in a mixed international duopoly for differentiated goods, where firms choose whether to set prices sequentially or simultaneously. We discuss the desirable role of the public firm by comparing welfare among three games. We find that, in the three possible roles, the domestic public firm put a lower price, and then produces more than the foreign private firm.

Performance evaluation of a cooperative reputation system for vehicular delay-tolerant networks

In the last decade, both scientific community and automotive industry enabled communications among vehicles in different kinds of scenarios proposing different vehicular architectures. Vehicular delay-tolerant networks (VDTNs) were proposed as a solution to overcome some of the issues found in other vehicular architectures, namely, in dispersed regions and emergency scenarios. Most of these issues arise from the unique characteristics of vehicular networks. Contrary to delay-tolerant networks (DTNs), VDTNs place the bundle layer under the network layer in order to simplify the layered architecture and enable communications in sparse regions characterized by long propagation delays, high error rates, and short contact durations. However, such characteristics turn contacts very important in order to exchange as much information as possible between nodes at every contact opportunity. One way to accomplish this goal is to enforce cooperation between network nodes. To promote cooperation among nodes, it is important that nodes share their own resources to deliver messages from others. This can be a very difficult task, if selfish nodes affect the performance of cooperative nodes. This paper studies the performance of a cooperative reputation system that detects, identify, and avoid communications with selfish nodes. Two scenarios were considered across all the experiments enforcing three different routing protocols (First Contact, Spray and Wait, and GeoSpray). For both scenarios, it was shown that reputation mechanisms that punish aggressively selfish nodes contribute to increase the overall network performance.

Delay approximation of fractional integrals

This paper explores the calculation of fractional integrals by means of the time delay operator. The study starts by reviewing the memory properties of fractional operators and their relationship with time delay. Based on the time response of the Mittag-Leffler function an approximation of fractional integrals consisting of time delayed samples is proposed. The tuning of the approximation is optimized by means of a genetic algorithm. The results demonstrate the feasibility of the new perspective and the limits of their application.

Effects of hotel characteristics on room rates in Porto: a hedonic price approach

According to the hedonic price method, a price of a good is related with the characteristics or the services it provides. Within this framework, the aim of this study it is to examine the effect on room rates of different characteristics of hotels in and around the city of Porto, such as star category, size, room and service quality, hotel facilities and location. It was estimated a hedonic price function, using data for 51 hotels. The results enable to identify the attributes that are important to consumers and hoteliers and to which extent. This information can be used by hotel managers to define a price strategy and helpful in new investment decisions.

Demand Response Programs Definition Using Demand Price Elasticity to Define Consumers Aggregation for an Improved Remuneration Structure

The positioning of the consumers in the power systems operation has been changed in the recent years, namely due to the implementation of competitive electricity markets. Demand response is an opportunity for the consumers’ participation in electricity markets. Smart grids can give an important support for the integration of demand response. The methodology proposed in the present paper aims to create an improved demand response program definition and remuneration scheme for aggregated resources. The consumers are aggregated in a certain number of clusters, each one corresponding to a distinct demand response program, according to the economic impact of the resulting remuneration tariff. The knowledge about the consumers is obtained from its demand price elasticity values. The illustrative case study included in the paper is based on a 218 consumers’ scenario.

European Union emissions trading scheme impact on the Spanish electricity price during phase II and phase III implementation

The European Union Emissions Trading Scheme (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The purpose of the present work is to evaluate the influence of CO2 opportunity cost on the Spanish wholesale electricity price. Our sample includes all Phase II of the EU ETS and the first year of Phase III implementation, from January 2008 to December 2013. A vector error correction model (VECM) is applied to estimate not only long-run equilibrium relations, but also short-run interactions between the electricity price and the fuel (natural gas and coal) and carbon prices. The four commodities prices are modeled as joint endogenous variables with air temperature and renewable energy as exogenous variables. We found a long-run relationship (cointegration) between electricity price, carbon price, and fuel prices. By estimating the dynamic pass-through of carbon price into electricity price for different periods of our sample, it is possible to observe the weakening of the link between carbon and electricity prices as a result from the collapse on CO2 prices, therefore compromising the efficacy of the system to reach proposed environmental goals. This conclusion is in line with the need to shape new policies within the framework of the EU ETS that prevent excessive low prices for carbon over extended periods of time.

Price-setting dynamical duopoly with incomplete information

We consider a price competition in a duopoly with substitutable goods, linear and symmetric demand. There is a firm (F 1) that chooses first the price p 1 of its good; the other firm (F 2) observes p 1 and then chooses the price p 2 of its good. The conclusions of this price-setting dynamical duopoly are substantially altered by the presence of either differentiated goods or asymmetric information about rival’s production costs. In this paper, we consider asymmetric information about rival’s production costs. We do ex-ante and ex-post analyses of firms’ profits and market prices. We compare the ex-ante firms’ expected profits with the ex-post firms’ profits.

Asymmetric dynamic price competition with uncertainty

We consider a dynamic setting-price duopoly model in which a dominant (leader) firm moves first and a subordinate (follower) firm moves second. We suppose that each firm has two different technologies, and uses one of them according to a certain probability distribution. The use of either one or the other technology affects the unitary production cost. We analyse the effect of the production costs uncertainty on the profits of the firms, for different values of the intercept demand parameters.