Essays on Energy Economics and Industrial Organization

The dissertation consists of three chapters related to the low-price guarantee marketing strategy and energy efficiency analysis. The low-price guarantee is a marketing strategy in which firms promise to charge consumers the lowest price among their competitors. Chapter 1 addresses the research question "Does a Low-Price Guarantee Induce Lower Prices'' by looking into the retail gasoline industry in Quebec where there was a major branded firm which started a low-price guarantee back in 1996. Chapter 2 does a consumer welfare analysis of low-price guarantees to drive police indications and offers a new explanation of the firms' incentives to adopt a low-price guarantee. Chapter 3 develops the energy performance indicators (EPIs) to measure energy efficiency of the manufacturing plants in pulp, paper and paperboard industry.

Chapter 1 revisits the traditional view that a low-price guarantee results in higher prices by facilitating collusion. Using accurate market definitions and station-level data from the retail gasoline industry in Quebec, I conducted a descriptive analysis based on stations and price zones to compare the price and sales movement before and after the guarantee was adopted. I find that, contrary to the traditional view, the stores that offered the guarantee significantly decreased their prices and increased their sales. I also build a difference-in-difference model to quantify the decrease in posted price of the stores that offered the guarantee to be 0.7 cents per liter. While this change is significant, I do not find the response in comeptitors' prices to be significant. The sales of the stores that offered the guarantee increased significantly while the competitors' sales decreased significantly. However, the significance vanishes if I use the station clustered standard errors. Comparing my observations and the predictions of different theories of modeling low-price guarantees, I conclude the empirical evidence here supports that the low-price guarantee is a simple commitment device and induces lower prices.

Chapter 2 conducts a consumer welfare analysis of low-price guarantees to address the antitrust concerns and potential regulations from the government; explains the firms' potential incentives to adopt a low-price guarantee. Using station-level data from the retail gasoline industry in Quebec, I estimated consumers' demand of gasoline by a structural model with spatial competition incorporating the low-price guarantee as a commitment device, which allows firms to pre-commit to charge the lowest price among their competitors. The counterfactual analysis under the Bertrand competition setting shows that the stores that offered the guarantee attracted a lot more consumers and decreased their posted price by 0.6 cents per liter. Although the matching stores suffered a decrease in profits from gasoline sales, they are incentivized to adopt the low-price guarantee to attract more consumers to visit the store likely increasing profits at attached convenience stores. Firms have strong incentives to adopt a low-price guarantee on the product that their consumers are most price-sensitive about, while earning a profit from the products that are not covered in the guarantee. I estimate that consumers earn about 0.3% more surplus when the low-price guarantee is in place, which suggests that the authorities should not be concerned and regulate low-price guarantees. In Appendix B, I also propose an empirical model to look into how low-price guarantees would change consumer search behavior and whether consumer search plays an important role in estimating consumer surplus accurately.

Chapter 3, joint with Gale Boyd, describes work with the pulp, paper, and paperboard (PP&PB) industry to provide a plant-level indicator of energy efficiency for facilities that produce various types of paper products in the United States. Organizations that implement strategic energy management programs undertake a set of activities that, if carried out properly, have the potential to deliver sustained energy savings. Energy performance benchmarking is a key activity of strategic energy management and one way to enable companies to set energy efficiency targets for manufacturing facilities. The opportunity to assess plant energy performance through a comparison with similar plants in its industry is a highly desirable and strategic method of benchmarking for industrial energy managers. However, access to energy performance data for conducting industry benchmarking is usually unavailable to most industrial energy managers. The U.S. Environmental Protection Agency (EPA), through its ENERGY STAR program, seeks to overcome this barrier through the development of manufacturing sector-based plant energy performance indicators (EPIs) that encourage U.S. industries to use energy more efficiently. In the development of the energy performance indicator tools, consideration is given to the role that performance-based indicators play in motivating change; the steps necessary for indicator development, from interacting with an industry in securing adequate data for the indicator; and actual application and use of an indicator when complete. How indicators are employed in EPA’s efforts to encourage industries to voluntarily improve their use of energy is discussed as well. The chapter describes the data and statistical methods used to construct the EPI for plants within selected segments of the pulp, paper, and paperboard industry: specifically pulp mills and integrated paper & paperboard mills. The individual equations are presented, as are the instructions for using those equations as implemented in an associated Microsoft Excel-based spreadsheet tool.

Politics vs economics: unintended consequences of Governments’ interventions in airlines’ markets

Overlaying theories of market inefficiencies and/or failure onto airline economics indicates that the industry encounters at least seven of the indicators which have triggered interventions by national, multi-national or supranational governments (NMSGs) trying to resolve political, social or environmental problems. The NMSGs’ interventions aimed to resolve lack of competition, fill missing markets, and neuter the presence of negative externalities, free riders, social inequalities and moral panic. Desk research showed that their interventions (many lacking preliminary economic analysis) either intentionally solved and/or unintentionally triggered market inefficiencies or failures. It is possible that some of the interventions could eventually make advanced world airlines subsidise their advancing world competitors.

The economics of credit markets: theory and evidence.

Doutoramento em Economia.

Knowmore (House of Commons)

Knowmore (House of Commons) is a large scale generative interactive installation that incorporates embodied interaction, dynamic image creation, new furniture forms, touch sensitivity, innovative collaborative processes and multichannel generative sound creation. A large circular table spun by hand and a computer-controlled video projection falls on its top, creating an uncanny blend of physical object and virtual media. Participants’ presence around the table and how they touch it is registered, allowing up to five people to collaboratively ‘play’ this deeply immersive audiovisual work. Set within an ecological context, the work subtly asks what kind of resources and knowledges might be necessary to move us past simply knowing what needs to be changed to instead actually embodying that change, whilst hinting at other deeply relational ways of understanding and knowing the world. The work has successfully operated in two high traffic public environments, generating a subtle form of interactivity that allows different people to interact at different paces and speeds and with differing intentions, each contributing towards dramatic public outcomes. The research field involved developing new interaction and engagement strategies for eco-political media arts practice. The context was the creation of improved embodied, performative and improvisational experiences for participants; further informed by ‘Sustainment’ theory. The central question was, what ontological shifts may be necessary to better envision and align our everyday life choices in ways that respect that which is shared by all - 'The Commons'. The methodology was primarily practice-led and in concert with underlying theories. The work’s knowledge contribution was to question how new media interactive experience and embodied interaction might prompt participants to reflect upon the kind of resources and knowledges required to move past simply knowing what needs to be changed to instead actually embodying that change. This was achieved through focusing on the power of embodied learning implied by the works' strongly physical interface (i.e. the spinning of a full size table) in concert with the complex field of layered imagery and sound. The work was commissioned by the State Library of Queensland and Queensland Artworkers Alliance and significantly funded by The Australia Council for the Arts, Arts Queensland, QUT, RMIT Centre for Animation and Interactive Media and industry partners E2E Visuals. After premiering for 3 months at the State Library of Queensland it was curated into the significant ‘Mediations Biennial of Modern Art’ in Poznan, Poland. The work formed the basis of two papers, was reviewed in Realtime (90), was overviewed at Subtle Technologies (2010) in Toronto and shortlisted for ISEA 2011 Istanbul and included in the edited book/catalogue ‘Art in Spite of Economics’, a collaboration between Leonardo/ISAST (MIT Press); Goldsmiths, University of London; ISEA International; and Sabanci University, Istanbul.

Working at the interface : the descriptive relevance of Grunig and Hunt’s theories to public relations practices in south east Queensland schools

This article examines the relevance of James Grunig and Todd Hunt’s (1984) theories to public relations practitioners’ roles in south east Queensland schools. It focuses in particular on the two-way symmetric model in this context. The geographical boundaries of the research mean that this article is intended primarily as an exploratory, descriptive analysis of a specific area rather than an exhaustive treatise on the general topic of public relations in Australian schools. However, it is hoped that it will prove useful in identifying bases for further study and discussion.

Articulating cooperative systems and driver behaviour theories

There has been increased research interest in Co-operative Vehicle Infrastructure Systems (CVIS) from the eld of Intelligent Transport Systems (ITS). However most of the research have focused on the engineering aspects and overlooked their relevance to the drivers' behaviour. This paper argues that the priority for cooperative systems is the need to improve drivers decision making and reduce drivers' crash risk exposure to improve road safety. Therefore any engineering solutions need to be considered in conjuction with traffic psychology theories on driver behaviour. This paper explores the advantages and limitations of existing systems and emphasizes various theoretical issues that arise in articulating cooperative systems' capabilities and drivers' behaviour.

Theories and ideas you just have to know about - Introduction

Theories provide us with a frame of reference or model of how something works. Theoreticians who focus on the human state try to make a best-fit model. They try to imagine a typical case and generate a set of frameworks that might assist us to predict behaviour or some outcome, or simply explain how things work. They aim to understand how elements of interest might impact upon each other, and give rise to or predict behavioural, emotional, moral, physical, cognitive or social change for individuals and groups. Theories help give us insight. However, theories do not provide the templates for growth and change. They are simply someone’s informed and researched view regarding what might happen as people grow and interact with the physical and social world.