Role of price and enforcement in water allocation: Insights from Game Theory

As many countries are moving toward water sector reforms, practical issues of how water management institutions can better effect allocation, regulation, and enforcement of water rights have emerged. The problem of nonavailability of water to tailenders on an irrigation system in developing countries, due to unlicensed upstream diversions is well documented. The reliability of access or equivalently the uncertainty associated with water availability at their diversion point becomes a parameter that is likely to influence the application by users for water licenses, as well as their willingness to pay for licensed use. The ability of a water agency to reduce this uncertainty through effective water rights enforcement is related to the fiscal ability of the agency to monitor and enforce licensed use. In this paper, this interplay across the users and the agency is explored, considering the hydraulic structure or sequence of water use and parameters that define the users and the agency`s economics. The potential for free rider behavior by the users, as well as their proposals for licensed use are derived conditional on this setting. The analyses presented are developed in the framework of the theory of ""Law and Economics,`` with user interactions modeled as a game theoretic enterprise. The state of Ceara, Brazil, is used loosely as an example setting, with parameter values for the experiments indexed to be approximately those relevant for current decisions. The potential for using the ideas in participatory decision making is discussed. This paper is an initial attempt to develop a conceptual framework for analyzing such situations but with a focus on the reservoir-canal system water rights enforcement.

Phenolic composition of South American red wines classified according to their antioxidant activity, retail price and sensory quality

In this study, 73 South American red wines (Vitis vinifera) from 5 varietals were classified based on sensory quality, retail price and antioxidant activity and characterised in relation to their phenolic composition. ORAC and DPPH assays were assessed to determine the antioxidant activity, and sensory analysis was conducted by seven professional tasters using the Wine Spirits Education Trust`s structured scales. The use of multivariate statistical techniques allowed the identification of wines with the best combination of sensory characteristics, price and antioxidant activity. The most favourable varieties were Malbec, Cabernet Sauvignon, and Syrah produced in Chile and Argentina. Conversely, Pinot Noir wines displayed the lowest sensory characteristics and antioxidant activity. These results suggest that the volatile compounds may be the main substances responsible for differentiating red wines on the basis of sensory evaluation. (C) 2011 Elsevier Ltd. All rights reserved.

Asset Price Instability and Policy Responses: The Legacy of Liberalisation

The debate about the dynamics and potential policy responses to asset inflation has intensified in recent years. Some analysts, notably Borio and Lowe, have called for 'subtle' changes to existing monetary targeting frameworks to try to deal with the problems of asset inflation and have attempted to developed indicators of financial vulnerability to aid this process. In contrast, this paper argues that the uncertainties involved in understanding financial market developments and their potential impact on the real economy are likely to remain too high to embolden policy makers. The political and institutional risks associated with policy errors are also significant. The fundamental premise that a liberalised financial system is based on 'efficient' market allocation cannot be overlooked. The corollary is that any serious attempt to stabilize financial market outcomes must involve at least a partial reversal of deregulation.

Response to price and production risk: The case of Australian wheat

A model of Australian wheat grower supply response was specified under the constraints of price and yield uncertainty, risk aversion, partial adjustment, and quadratic costs. The model was solved to obtain area planted. The results of estimation indicate that risk arising from prices and climate have had a significant influence on producer decision making. The coefficient of relative risk aversion and short-run and long-run elasticities of supply with respect to price were calculated. Wheat growers' risk premium, expected at the start of the season for exposed price and yield risk, was 2.8 percent of revenue or 10.4 percent of profit as measured by producer surplus. (C) 2000 John Wiley & Sons, Inc.

Indirect certainty equivalents for the firm facing price and production uncertainty

Producer decisionmaking under uncertainty is characterized using indirect objective functions. The characterization is for the class of producers with continuous and nondecreasing preferences over stochastic incomes who face both price and production uncertainty. (C) 2002 Elsevier Science B.V. All rights reserved.

Flex cars and the alcohol price

We build a model that incorporates the effect of the innovative ""flex"" car, an automobile that is able to run with either gasoline or alcohol, on the dynamics of fuel prices in Brazil. Our model shows that differences regarding fuel prices will now depend on the proportions of alcohol, gasoline and flex cars in the total stock. Conversely, the demand for each type of car will also depend on the expected future prices of alcohol and gasoline (in addition to the car prices). The model reflects our findings that energy prices are tied in the long run and that causality runs stronger from gasoline to alcohol. The estimated error correction parameter is stable, implying that the speed of adjustment towards equilibrium remains unchanged. The latter result is probably due to a still small fraction of flex cars in the total stock (approx. 5%), despite the fact that its sales nearly reached 100% in 2006. (C) 2009 Elsevier B.V. All rights reserved.

Dorsal cutaneous branch of the ulnar nerve: a light and electron microscopy histometric study

This study describes the normal morphology and morphometry of the dorsal cutaneous branch of the ulnar nerve (DCBU) in humans. Fourteen nerves of eight donors were prepared by conventional techniques for paraffin and epoxy resin embedding. Semiautomatic morphometric analysis was performed by means of specific computer software. Histograms of the myelinated and unmyelinated fiber population and the G-ratio distribution of fibers were plotted. Myelinated fiber density per nerve varied from 5,910 to 10,166 fibers/mm(2), with an average of 8,170 +/- 393 fibers/mm(2). The distribution was bimodal with peaks at 4.0 and 9.5 mu m. Unmyelinated fiber density per nerve varied from 50,985 to 127,108, with an average of 78,474 +/- 6, 610 fibers/mm(2), with a unimodal distribution displaying a peak at 0.8 mu m. This study thus adds information about the fascicles and myelinated and unmyelinated fibers of DCBU nerves in normal people, which may be useful in further studies concerning ulnar nerve neuropathies, mainly leprosy neuropathy.

A congestion management and transmission price simulator for competitive electricity markets

In a liberalized electricity market, the Transmission System Operator (TSO) plays a crucial role in power system operation. Among many other tasks, TSO detects congestion situations and allocates the payments of electricity transmission. This paper presents a software tool for congestion management and transmission price determination in electricity markets. The congestion management is based on a reformulated Optimal Power Flow (OPF), whose main goal is to obtain a feasible solution for the re-dispatch minimizing the changes in the dispatch proposed by the market operator. The transmission price computation considers the physical impact caused by the market agents in the transmission network. The final tariff includes existing system costs and also costs due to the initial congestion situation and losses costs. The paper includes a case study for the IEEE 30 bus power system.

Residential property loans and performance during property price booms: evidence from European banks

Understanding the performance of banks is of the utmost relevance, because of the impact of this sector on economic growth and financial stability. Of all the different assets that make up a bank portfolio, the residential mortgage loans constitute one of its main. Using the dynamic panel data method, we analyse the influence of residential mortgage loans on bank profitability and risk, using a sample of 555 banks in the European Union (EU-15), over the period from 1995 to 2008. We find that banks with larger weights of residential mortgage loans show lower credit risk in good times. This result explains why banks rush to lend on property during booms due to the positive effects it has on credit risk. The results show further that credit risk and profitability are lower during the upturn in the residential property price cycle. The results also reveal the existence of a non-linear relationship (U-shaped marginal effect), as a function of bank’s risk, between profitability and the residential mortgage loans exposure. For those banks that have high credit risk, a large exposure of residential mortgage loans is associated with higher risk-adjusted profitability, through lower risk. For banks with a moderate/low credit risk, the effects of higher residential mortgage loan exposure on its risk-adjusted profitability are also positive or marginally positive.

Residential property loans and performance during property price booms: evidence from European

Understanding the performance of banks is of the u tmost importance due to the impact the sector may have on economic growth and financial stability. Residential mortgage loans constitute a large proportion of the portfolio of many banks and are one of the key assets in the determination of performance. Using a dynamic panel model , we analyse the impact of res idential mortgage loans on bank profitability and risk , based on a sample of 555 banks in the European Union ( EU - 15 ) , over the period from 1995 to 2008. We find that banks with larger weight s in residential mortgage loans display lower credit risk in good market conditions . This result may explain why banks rush to lend on property during b ooms due to the positive effect it has on credit risk . The results also show that credit risk and profitability are lower during the upturn in the residential property cy cle. Furthermore, t he results reveal the existence of a non - linear relationship ( U - shaped marginal effect), as a function of bank’s risk, between profitability and residential mortgage exposure . For those banks that have high er credit risk, a large exposur e to residential loans is associated with increased risk - adjusted profitability, through a reduction in risk. For banks with a moderate to low credit risk, the impact of higher exposure are also positive on risk - adjusted profitability.

Genus for knots and links in renormalizable templates with several branch nodes

We apply kneading theory to describe the knots and links generated by the iteration of renormalizable nonautonomous dynamical systems with reducible kneading invariants, in terms of the links corresponding to each factor. As a consequence we obtain explicit formulas for the genus for this kind of knots and links.

Scheduling of a hydro producer considering head-dependency, price scenarios and risk-aversion

In this paper, a mixed-integer quadratic programming approach is proposed for the short-term hydro scheduling problem, considering head-dependency, discontinuous operating regions and discharge ramping constraints. As new contributions to earlier studies, market uncertainty is introduced in the model via price scenarios, and risk aversion is also incorporated by limiting the volatility of the expected profit through the conditional value-at-risk. Our approach has been applied successfully to solve a case Study based on one of the main Portuguese cascaded hydro systems, requiring a negligible computational time.

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.