Competition with forward contracts: a laboratory analysis motivated by electricity market design

We use experiments to study the efficiency effects for a market as a whole of adding the possibility of forward contracting to a pre-existing spot market. We deal separately with the cases where spot market competition is in quantities and where it is in supply functions. In both cases we compare the effect of adding a contract market with the introduction of an additional competitor, changing the market structure from a triopoly to a quadropoly. We find that, as theory suggests, for both types of competition the introduction of a forward market significantly lowers prices. The combination of supply function competition with a forward market leads to high efficiency levels.

Seasonal changes of whole root system conductance by a drought-tolerant grape root system

The role of root systems in drought tolerance is a subject of very limited information compared with above-ground responses. Adjustments to the ability of roots to supply water relative to shoot transpiration demand is proposed as a major means for woody perennial plants to tolerate drought, and is often expressed as changes in the ratios of leaf to root area (AL:AR). Seasonal root proliferation in a directed manner could increase the water supply function of roots independent of total root area (AR) and represents a mechanism whereby water supply to demand could be increased. To address this issue, seasonal root proliferation, stomatal conductance (gs) and whole root system hydraulic conductance (kr) were investigated for a drought-tolerant grape root system (Vitis berlandieri×V. rupestris cv. 1103P) and a non-drought-tolerant root system (Vitis riparia×V. rupestris cv. 101-14Mgt), upon which had been grafted the same drought-sensitive clone of Vitis vinifera cv. Merlot. Leaf water potentials (ψL) for Merlot grafted onto the 1103P root system (–0.91±0.02 MPa) were +0.15 MPa higher than Merlot on 101-14Mgt (–1.06±0.03 MPa) during spring, but dropped by approximately –0.4 MPa from spring to autumn, and were significantly lower by –0.15 MPa (–1.43±0.02 MPa) than for Merlot on 101-14Mgt (at –1.28±0.02 MPa). Surprisingly, gs of Merlot on the drought-tolerant root system (1103P) was less down-regulated and canopies maintained evaporative fluxes ranging from 35–20 mmol vine−1 s−1 during the diurnal peak from spring to autumn, respectively, three times greater than those measured for Merlot on the drought-sensitive rootstock 101-14Mgt. The drought-tolerant root system grew more roots at depth during the warm summer dry period, and the whole root system conductance (kr) increased from 0.004 to 0.009 kg MPa−1 s−1 during that same time period. The changes in kr could not be explained by xylem anatomy or conductivity changes of individual root segments. Thus, the manner in which drought tolerance was conveyed to the drought-sensitive clone appeared to arise from deep root proliferation during the hottest and driest part of the season, rather than through changes in xylem structure, xylem density or stomatal regulation. This information can be useful to growers on a site-specific basis in selecting rootstocks for grape clonal material (scions) grafted to them.

Poverty and children's work in Spain and Latin America. Some preliminary remarks.

In the first part of this paper we try to test the relationship between mothers earnings, fertility and children's work in the Spanish (Catalan) context of the first third of the 20th century. Specific human capital investment of adult working women had as an outcome the sharp increase of their real wage and also the increase of the opportunity cost of time devoted to house work including child rearing. Fertility evolution is endogenous to the model and decreases as a result of women real wage increases. Human capital investment of labouring women and mandatory schooling of children shift the labour supply function to a new steady state in which the slope is steeper. According to recent papers this model applies to 20th century Spain and it causes the abolition of children's work. Nonetheless the model do not apply to 20th century Latin America. Despite the positive evolution of literacy and life expectancy in this region, other factors involved poor results of the educational human capital investment. In this paper we remark the role of the increasing share of the informal sector of the economy ruled on the bases of women's and children's work. Second we stress the role of high income inequality evolution and endogamic school supplies to explain the limits of increasing literacy on more remarkable human capital improvements.

Imperfect competition and market liquidity with a supply informed trader

We develop a model of insider trading where agents have private information either about liquidation value or about supply and behave strategically to maximize their profits. The supply informed trader plays a dual role in market making and in information revelation. This trader not only reveals a part of the information he owns, but he also induces the other traders to reveal more of their private information. The presence of different types of information decreases market liquidity and induces non-monotonicity of the market indicators with respect to the variance of liquidation value. Replacing the noise introduced by liquidity traders with a random supply also allows us to study the effect the shocks on different components of supply have on prices and quantities.

Lobbying, political competition, and local land supply: recent evidence from Spain

We analyze whether local land supply is influenced by the degree of political competition, and interpret the findings as being indicative of the influence wielded by land development lobbies. We use a new database including both political and land supply data for more than 2,000 Spanish municipalities for the period 2003-2007. In Spain, land use policies are largely a local responsibility with municipalities having periodically to pass compre- hensive land use plans. The main policy variable in these plans, and the one analyzed here, is the amount of land classified for potential development. We measure local political competition as the margin of victory of the incumbent government. We instrument this variable using the number of votes obtained by parties represented in local government when standing at the first national legislative elections following the re-establishment of democracy, and the number of votes they actually obtained regionally at the national legislative elections. The results indicate that stiffer political competition does indeed reduce the amount of new land designated for development. This effect is found to be most marked in suburbs, in towns with a high percent of commuters and homeowners, and in municipalities governed by the left.

Lobbying, political competition, and local land supply: recent evidence from Spain

We analyze whether local land supply is influenced by the degree of political competition, and interpret the findings as being indicative of the influence wielded by land development lobbies. We use a new database including both political and land supply data for more than 2,000 Spanish municipalities for the period 2003-2007. In Spain, land use policies are largely a local responsibility with municipalities having periodically to pass compre- hensive land use plans. The main policy variable in these plans, and the one analyzed here, is the amount of land classified for potential development. We measure local political competition as the margin of victory of the incumbent government. We instrument this variable using the number of votes obtained by parties represented in local government when standing at the first national legislative elections following the re-establishment of democracy, and the number of votes they actually obtained regionally at the national legislative elections. The results indicate that stiffer political competition does indeed reduce the amount of new land designated for development. This effect is found to be most marked in suburbs, in towns with a high percent of commuters and homeowners, and in municipalities governed by the left.

Do market conditions affect gift exchange? Evidence from experimental markets with excess supply and excess demand

We study whether people's behavior in unbalanced gift exchange markets with repeated interaction are affected by whether they are on the excess supply side or the excess demand side of the market. Our analysis is based on the comparison of behavior between two types of experimental gift exchange markets, which vary only with respect to whether first or second movers are on the long side of the market. The direction of market imbalance could influence subjects' behavior, as second movers (workers) might react differently to favorable actions by first movers (firms) in the two cases. While our data show strong deviations from the standard game-theoretic prediction, we find mainly secondary treatment effects. Wage offers are not higher when there is an excess supply of firms, and workers do not respond more favorably to a given wage when there is an excess supply of labor. The state of competition does not appear to have strong effects in our data. We also present data from single-period sessions that show substantial gift exchange even without repeated interactions.

Monopolistic competition and different wage setting systems

In this paper we match the static disequilibrium unemployment model without frictions in the labor market and monopolistic competition with an infinite horizon model of growth. We compare the wages set at the firm, sector and national (centralized) levels, their unemployment rates and growth of the economic variables, for the Cobb-Douglas production function, in order to see under wich conditions the inverse U hypothesis between unemployment and centralization of wage bargain is confirmed. We also analyze, in the three wage setting systems, the effect of an increase in the monopoly power on employment and growth.

Simulating the Impact of Sectorial Productivity Gains on Two Regional Economies: Key Sectors from a Supply Side Perspective

In this paper we simulate and analyse the economic impact that sectorial productivity gains have on two regional Spanish economies (Catalonia and Extremadura). In particular we study the quantitative effect that each sector’s productivity gain has on household welfare (real disposable income and equivalent variation), on the consumption price indices and factor relative prices, on real production (GDP) and on the government’s net income (net taxation revenues of social transfers to households). The analytical approach consists of a computable general equilibrium model, in which we assume perfect competition and cleared markets, including factor markets. All the parameters and exogenous variables of the model are calibrated by means of two social accounting matrices, one for each region under study. The results allow us to identify those sectors with the greatest impact on consumer welfare as the key sectors in the regional economies. Keywords: Productivity gains, key sectors, computable general equilibrium

Aerotropolis: an aviation-linked space

This paper examines the conditions allowing the formation of aeropolitan areas as large industrial areas with a high concentration of commercial activities in the proximity of selected airports. We assume that firms deliver their production by plane and land competition takes place among service operators, firms and farmers. Service operators supply facilities that firms can absorb. Our framework identifies a unique land equilibrium characterized by the spatial sequence Airport - Industrial park - Rural area (A-I-R). Aerotropolis-type configurations are associated with the level of transport costs and the degree of intensity of facilities. Keywords: aerotropolis; facilities; bid-rent function. JEL Classification Numbers: L29; L90; R14.

Supply Multipliers in Two Regional Economies

This paper focuses on the analysis of the economic impact that sectorial total factor productivity – or valued added - gains have on two regional Spanish economies (Catalonia and Extremadura). In particular it is studied the quantitative effect that each sector’s valued added injections has on household welfare (real disposable income), on the consumption price indices and factor relative prices, on real production (GDP) and on the government and foreign net income. To do that, we introduce the concept of supply multiplier. The analytical approach consists of a computable general equilibrium model, in which it is assumed perfect competition and cleared markets of goods and factors. All the parameters and exogenous variables of the model are calibrated by means of two social accounting matrices, one for each region under study. The results allow identifying those sectors with the greatest multipliers impact on consumer welfare as the key sectors in the regional economies. Keywords: efficiency gains, supply multipliers, key sectors, computable general equilibrium. JEL Classification: C68, R13.

Avoiding transcription factor competition at promoter level increases the chances of obtaining oscillations

Background: The ultimate goal of synthetic biology is the conception and construction of genetic circuits that are reliable with respect to their designed function (e.g. oscillators, switches). This task remains still to be attained due to the inherent synergy of the biological building blocks and to an insufficient feedback between experiments and mathematical models. Nevertheless, the progress in these directions has been substantial. Results: It has been emphasized in the literature that the architecture of a genetic oscillator must include positive (activating) and negative (inhibiting) genetic interactions in order to yield robust oscillations. Our results point out that the oscillatory capacity is not only affected by the interaction polarity but by how it is implemented at promoter level. For a chosen oscillator architecture, we show by means of numerical simulations that the existence or lack of competition between activator and inhibitor at promoter level affects the probability of producing oscillations and also leaves characteristic fingerprints on the associated period/amplitude features. Conclusions: In comparison with non-competitive binding at promoters, competition drastically reduces the region of the parameters space characterized by oscillatory solutions. Moreover, while competition leads to pulse-like oscillations with long-tail distribution in period and amplitude for various parameters or noisy conditions, the non-competitive scenario shows a characteristic frequency and confined amplitude values. Our study also situates the competition mechanism in the context of existing genetic oscillators, with emphasis on the Atkinson oscillator.

Interbank Competition with Costly Screening

We analyse credit market equilibrium when banks screen loan applicants. When banks have a convex cost function of screening, a pure strategy equilibrium exists where banks optimally set interest rates at the same level as their competitors. This result complements Broecker s (1990) analysis, where he demonstrates that no pure strategy equilibrium exists when banks have zero screening costs. In our set up we show that interest rate on loans are largely independent of marginal costs, a feature consistent with the extant empirical evidence. In equilibrium, banks make positive profits in our model in spite of the threat of entry by inactive banks. Moreover, an increase in the number of active banks increases credit risk and so does not improve credit market effciency: this point has important regulatory implications. Finally, we extend our analysis to the case where banks have differing screening abilities.

Supply chain management: An opportunity for metaheuristics

In today s highly competitive and global marketplace the pressure onorganizations to find new ways to create and deliver value to customersgrows ever stronger. In the last two decades, logistics and supply chainhas moved to the center stage. There has been a growing recognition thatit is through an effective management of the logistics function and thesupply chain that the goal of cost reduction and service enhancement canbe achieved. The key to success in Supply Chain Management (SCM) requireheavy emphasis on integration of activities, cooperation, coordination andinformation sharing throughout the entire supply chain, from suppliers tocustomers. To be able to respond to the challenge of integration there isthe need of sophisticated decision support systems based on powerfulmathematical models and solution techniques, together with the advancesin information and communication technologies. The industry and the academiahave become increasingly interested in SCM to be able to respond to theproblems and issues posed by the changes in the logistics and supply chain.We present a brief discussion on the important issues in SCM. We then arguethat metaheuristics can play an important role in solving complex supplychain related problems derived by the importance of designing and managingthe entire supply chain as a single entity. We will focus specially on theIterated Local Search, Tabu Search and Scatter Search as the ones, but notlimited to, with great potential to be used on solving the SCM relatedproblems. We will present briefly some successful applications.

Do market conditions affect preferences? Evidence from experimental markets with excess supply and excess demand

We study whether people's preferences in an unbalanced market are affected by whether they are on the excess supply side or the excess demand side of the market. Our analysis is based on the comparison of behavior between two types of experimental gift exchange markets, which vary only with respect to whether first or second movers are on the long side of the market. The direction of market imbalance could influence subjects' motivation, as second movers, workers, might react differently to favorable actions by first movers, firms, in the two cases. Our data show strong deviations from the standard game-theoretic prediction. However, we only find secondary treatment effects. First movers are not more generous when they are in excess supply and second movers do not respond less favorably when they are in excess demand. Competition has only minor psychological effects in our data.