Predicting price-tag for customized goods

We discuss a dynamic pricing model which will aid automobile manufacturer in choosing the right price for customer segment. Though there is oligopoly market structure, the customers get "locked" into a particular technology/company which virtually makes the situation akin to a monopoly. There are associated network externalities and positive feedback. The key idea in monopoly pricing lies in extracting the customer surplus by exploiting the respective elasticities of demand. We present a Walrasian general equilibrium approach to determine the segment price. We compare the prices obtained from optimization model with that from Walrasian dynamics. The results are encouraging and can serve as a critical factor in Customer Relationship Management (CRM) and thereby effectively manage the lock-in.

The management of large mammals in relation to male strategies and conflict with people

Many large mammals such as elephant, rhino and tiger often come into conflict with people by destroying agricultural crops and even killing people, thus providing a deterrent to conservation efforts. The males of these polygynous species have a greater variance in reproductive success than females, leading to selection pressures favouring a ‘high risk-high gain’ strategy for promoting reproductive success. This brings them into greater conflict with people. For instance, adult male elephants are far more prone than a member of a female-led family herd to raid agricultural crops and to kill people. In polygynous species, the removal of a certain proportion of ‘surplus’ adult males is not likely to affect the fertility and growth rate of the population. Hence, this could be a management tool which would effectively reduce animal-human conflict, and at the same time maintain the viability of the population. Selective removal of males would result in a skewed sex ratio. This would reduce the ‘effective population size’ (as opposed to the total population or census number), increase the rate of genetic drift and, in small populations, lead to inbreeding depression. Plans for managing destructive mammals through the culling of males will have to ensure that the appropriate minimum size in the populations is being maintained.

Land availability and biomass production potential in India

In this paper we have assessed the availability of land and the potential for biomass production in India to meet various demands for biomass, including modern bioenergy. This is estimated by considering the various demands on land and its suitability. The biomass production potential of energy plantations is assessed for different agroecological zones. The total woody biomass production is estimated to be 321 Mt, based on biomass productivity in the range 2 to 17 t/ha/yr for the different agro-ecological zones and considering the conservative estimate of 43 Mha land availability for biomass production. A surplus of 231 Mt of biomass (after meeting the increased demand for fuelwood and timber by the year 2010) is estimated to be available for energy, which has an electricity generation potential of 231 TWh. As a first step, only the feasible physical potential of biomass production is assessed, along with an analysis of barriers. The potential costs and benefits of biomass production strategy are not analysed. (C) 1999 Elsevier Science Ltd. All rights reserved.

Decentralized Sustainable Energy Planning of Tumkur District, India

Present work shows the feasibility of decentralized energy options for the Tumkur district in India. Decentralized energy planning (DEP) involves scaling down energy planning to subnational or regional scales. The important aspect of the energy planning at decentralized level would be to prepare an area-based DEP to meet energy needs and development of alternate energy sources at least-cost to the economy and environment. The geographical coverage and scale reflects the level at which the analysis takes place, which is an important factor in determining the structure of models. In the present work, DEP modeling under different scenarios has been carried out for Tumkur district of India for the year 2020. DEP model is suitably scaled for obtaining the optimal mix of energy resources and technologies using a computer-based goal programming technique. The rural areas of the Tumkur district have different energy needs. Results show that electricity needs can be met by biomass gasifier technology, using biomass feedstock produced by allocating only 12% of the wasteland in the district at 8 t/ha/yr of biomass productivity. Surplus electricity can be produced by adopting the option of biomass power generation from energy plantations. The surplus electricity generated can be supplied to the grid. The sustainable development scenario is a least cost scenario apart from promoting self-reliance, local employment, and environmental benefits. (C) 2010 American Institute of Chemical Engineers Environ Prog, 30: 248-258, 2011

Tatonnement Mechanisms for Combinatorial Exchanges

Combinatorial exchanges are double sided marketplaces with multiple sellers and multiple buyers trading with the help of combinatorial bids. The allocation and other associated problems in such exchanges are known to be among the hardest to solve among all economic mechanisms. It has been shown that the problems of surplus maximization or volume maximization in combinatorial exchanges are inapproximable even with free disposal. In this paper, the surplus maximization problem is formulated as an integer linear programming problem and we propose a Lagrangian relaxation based heuristic to find a near optimal solution. We develop computationally efficient tâtonnement mechanisms for clearing combinatorial exchanges where the Lagrangian multipliers can be interpreted as the prices of the items set by the exchange in each iteration. Our mechanisms satisfy Individual-rationality and Budget-nonnegativity properties. The computational experiments performed on representative data sets show that the proposed heuristic produces a feasible solution with negligible optimality gap.

A Convex Optimization Framework for Almost Budget Balanced Allocation of a Divisible Good

We address the problem of allocating a single divisible good to a number of agents. The agents have concave valuation functions parameterized by a scalar type. The agents report only the type. The goal is to find allocatively efficient, strategy proof, nearly budget balanced mechanisms within the Groves class. Near budget balance is attained by returning as much of the received payments as rebates to agents. Two performance criteria are of interest: the maximum ratio of budget surplus to efficient surplus, and the expected budget surplus, within the class of linear rebate functions. The goal is to minimize them. Assuming that the valuation functions are known, we show that both problems reduce to convex optimization problems, where the convex constraint sets are characterized by a continuum of half-plane constraints parameterized by the vector of reported types. We then propose a randomized relaxation of these problems by sampling constraints. The relaxed problem is a linear programming problem (LP). We then identify the number of samples needed for ``near-feasibility'' of the relaxed constraint set. Under some conditions on the valuation function, we show that value of the approximate LP is close to the optimal value. Simulation results show significant improvements of our proposed method over the Vickrey-Clarke-Groves (VCG) mechanism without rebates. In the special case of indivisible goods, the mechanisms in this paper fall back to those proposed by Moulin, by Guo and Conitzer, and by Gujar and Narahari, without any need for randomization. Extension of the proposed mechanisms to situations when the valuation functions are not known to the central planner are also discussed. Note to Practitioners-Our results will be useful in all resource allocation problems that involve gathering of information privately held by strategic users, where the utilities are any concave function of the allocations, and where the resource planner is not interested in maximizing revenue, but in efficient sharing of the resource. Such situations arise quite often in fair sharing of internet resources, fair sharing of funds across departments within the same parent organization, auctioning of public goods, etc. We study methods to achieve near budget balance by first collecting payments according to the celebrated VCG mechanism, and then returning as much of the collected money as rebates. Our focus on linear rebate functions allows for easy implementation. The resulting convex optimization problem is solved via relaxation to a randomized linear programming problem, for which several efficient solvers exist. This relaxation is enabled by constraint sampling. Keeping practitioners in mind, we identify the number of samples that assures a desired level of ``near-feasibility'' with the desired confidence level. Our methodology will occasionally require subsidy from outside the system. We however demonstrate via simulation that, if the mechanism is repeated several times over independent instances, then past surplus can support the subsidy requirements. We also extend our results to situations where the strategic users' utility functions are not known to the allocating entity, a common situation in the context of internet users and other problems.

Present status of Gottigere Tank : Indicator of Decision maker’s apathy

Gottigere lake with a water spread area of about 14.98 ha is located in the Bellandur Lake catchment of the South Pennar River basin. In recent years, this lake catchment has been subjected to environmental stress mainly due to the rampant unplanned developmental activities in the catchment. The functional ability of the ecosystem is impaired due to structural changes in the ecosystem. This is evident from poor water quality, breeding of disease vectors, contamination of groundwater in the catchment, frequent flooding in the catchment due to topography alteration, decline in groundwater table, erosion in lake bed, etc. The development plans of the region (current as well as the proposed) ignore the integrated planning approaches considering all components of the ecosystem. Serious threats to the sustainability of the region due to lack of holistic approaches in aquatic resources management are land use changes (removal of vegetation cover, etc.), point and non-point sources of pollution impairing water quality, dumping of solid waste (building waste, etc.). Conservation of lake ecosystem is possible only when the physical and chemical integrity of its catchment is maintained. Alteration in the catchment either due to land use changes (leading to paved surface area from vegetation cover), alteration in topography, construction of roads in the immediate vicinity are detrimental to water yield in the catchment and hence, the sustenance of the lake. Open spaces in the form of lakes and parks aid as kidney and lung in an urban ecosystem, which maintain the health of the people residing in the locality. Identification of core buffer zones and conservation of buffer zones (500 to 1000 m from shore) is to be taken up on priority for conservation and sustainable management of Bangalore lakes. Bangalore is located over a ridge delineating four watersheds, viz. Hebbal, Koramangala, Challaghatta and Vrishabhavathi. Lakes and tanks are an integral part of natural drainage and help in retaining water during rainfall, which otherwise get drained off as flash floods. Each lake harvests rainwater from its catchment and surplus flows downstream spilling into the next lake in the chain. The topography of Bangalore has uniquely supported the creation of a large number of lakes. These lakes form chains, being a series of impoundments across streams. This emphasises the interconnectivity among Bangalore lakes, which has to be retained to prevent Bangalore from flooding or from water scarcity. The main source of replenishment of groundwater is the rainfall. The slope of the terrain allows most of the rainwater to flow as run-off. With the steep gradients available in the major valleys of Bangalore, the rainwater will flow out of the city within four to five hours. Only a small fraction of the rainwater infiltrates into the soil. The infiltration of water into the subsoil has declined with more and more buildings and paved road being constructed in the city. Thus the natural drainage of Bangalore is governed by flows from the central ridge to all lower contours and is connected with various tanks and ponds. There are no major rivers flowing in Bangalore and there is an urgent need to sustain these vital ecosystems through proper conservation and management measures. The proposed peripheral ring road connecting Hosur Road (NH 7) and Mysore Road (SH 17) at Gottigere lake falls within the buffer zone of the lake. This would alter the catchment integrity and hence water yield affecting flora, fauna and local people, and ultimately lead to the disappearance of Gottigere lake. Developmental activities in lake catchments, which has altered lake’s ecological integrity is in violation of the Indian Fisheries Act – 1857, the Indian Forest Act – 1927, Wildlife (Protection) Act – 1972, Water (Prevention and Control of Pollution) Act – 1974, Water (Prevention and Control of Pollution) Act – 1977, Forest (Conservation Act) – 1980, Environmental (Protection) Act – 1986, Wildlife (Protection) Amendment Act – 1991 and National Conservation Strategy and Policy Statement on Environment and Development – 1992. Considering 65% decline of waterbodies in Bangalore (during last three decades), decision makers should immediately take preventive measures to ensure that lake ecosystems are not affected. This report discusses the impacts due to the proposed infrastructure developmental activities in the vicinity of Gottigere tank.

A Shapley Value Analysis to Coordinate the Formation of Procurement Networks

In this paper we address the problem of forming procurement networks for items with value adding stages that are linearly arranged. Formation of such procurement networks involves a bottom-up assembly of complex production, assembly, and exchange relationships through supplier selection and contracting decisions. Research in supply chain management has emphasized that such decisions need to take into account the fact that suppliers and buyers are intelligent and rational agents who act strategically. In this paper, we view the problem of procurement network formation (PNF) for multiple units of a single item as a cooperative game where agents cooperate to form a surplus maximizing procurement network and then share the surplus in a fair manner. We study the implications of using the Shapley value as a solution concept for forming such procurement networks. We also present a protocol, based on the extensive form game realization of the Shapley value, for forming these networks.

The environmental and economic sustainability of potential bioethanol from willow in the UK.

Life cycle assessment has been used to investigate the environmental and economic sustainability of a potential operation in the UK in which bioethanol is produced from the hydrolysis and subsequent fermentation of coppice willow. If the willow were grown on idle arable land in the UK, or, indeed, in Eastern Europe and imported as wood chips into the UK, it was found that savings of greenhouse gas emissions of 70-90%, when compared to fossil-derived gasoline on an energy basis, would be possible. The process would be energetically self-sufficient, as the co-products, e.g. lignin and unfermented sugars, could be used to produce the process heat and electricity, with surplus electricity being exported to the National Grid. Despite the environmental benefits, the economic viability is doubtful at present. However, the cost of production could be reduced significantly if the willow were altered by breeding to improve its suitability for hydrolysis and fermentation.

Fiscal imbalances, inflation and sovereign default dynamics

Resumen: La cuestión central que este artículo busca responder es como la política monetaria puede afectar el comportamiento de equilibrio de primas por riesgo soberano y cesación de pagos. El artículo se basa en el modelo de “una-tasa-interés”. La deuda pública se hace riesgosa a causa de una política fiscal activa, como en Uribe (2006), reflejando la habilidad limitada de la autoridad fiscal para controlar el superávit primario. El problema de insolvencia es debido a una oleada de mala suerte (shocks negativos que afectan el superávit primario). Pero en contraste a los resultados de Uribe, a medida que aumenta el costo de la deuda soberana (que resulta de un excedente primario débil), la cesación de pagos se anticipa y es reflejada por una creciente prima de riesgo en el país y una probabilidad de cesación de pagos. La cesación de pagos se define como un incumplimiento de un acuerdo contractual y por ende la decisión es tomada por la autoridad fiscal. Mientras tanto, objetivos conflictivos entre la autoridad monetaria y fiscal juegan un rol importante en llevar a la autoridad fiscal a la cesación de pagos sobre sus pasivos. La característica de la política del gobierno necesaria para restaurar el equilibrio después de la cesación de pagos también es analizada.

Teoría de la plusvalía en Marx

Resumen: El artículo presenta un recorrido por algunos de los postulados de la economía británica clásica, a fin de comprender acabadamente la teoría de la plusvalía de Carlos Marx. Así, el autor analiza algunos conceptos fundamentales para tal efecto. Define –entrecruzando los postulados de Adam Smith y David Ricardo– las nociones de: el valor de las cosas, el precio de los salarios, y el beneficio empresario. Luego, dedica una sección a describir las críticas de Adam Smith y Carlos Marx al capitalismo. Desarrolla cabalmente lo relativo a la obtención y magnitud de la plusvalía, y realiza una reflexión final que define a la teoría de la plusvalía como conceptualmente falsa.

The scientific project of the small satellite of china

The efforts involved in developing a small satellite for scientific purposes in China in recent years are introduced in the present paper. The project is arranged on a case to case principle depending upon requirements and financial support. The space technology of a satellite and rockets, which have been developed over a relatively longer period in China, have been transferred to the scientific research of small satellites for improvement of the quality requirements. The surplus payloads of the rocket and satellite are used as the payloads of the small satellite and scientific experiments at a low cost. As an example, the project of balloon satellites for atmospheric research was successfully completed in 1991. The experience of the project management is of great benefit for further organization and arrangement of other projects. Opportunities exist for surplus payloads to be used in the future, and a small satellite for magnetospheric research will be launched in 1993.

A Fundamental Contradiction in Standard Rent Theory: A Case Study on Varian's "Intermediate Microeconomics"

In this paper, I examine Varian’s treatment of rent in his textbook on Microeconomics. I argue that he holds contradictory conceptions: sometimes rent is defined as surplus over cost whereas sometimes it is defined as cost, as the opportunity cost of fixed factors. I start by arguing that the distinction between fixed and variable factors is not the key for the definition of rent; ultimately, it is monopoly. Varian’s conception of rent is, essentially, Ricardo’s: rent is extraordinary profit turned rent. On the basis of a selfinconsistent notion of opportunity cost, Varian introduces the idea that rent is the opportunity cost of land, when what he actually defines is the opportunity cost of not renting the land. I also critically examine the related notion of “producer’s surplus”, and show that Varian’s treatment repeats the same contradiction as in rent.

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.

Does Immigration Raise Natives’ Income? National and Regional Evidence from Spain

How immigration affects the labor market of the host country is a topic of major concern for many immigrant-receiving nations. Spain is no exception following the rapid increase in immigrant flows experienced over the past decade. We assess the impact of immigration on Spanish natives’ income by estimating the net immigration surplus accruing at the national level and at high immigrant-receiving regions while taking into account the imperfect substitutability of immigrant and native labor. Specifically, using information on the occupational densities of immigrants and natives of different skill levels, we develop a mapping of immigrant-to-native self-reported skills that reveals the combination of natives across skills that would be equivalent to an immigrant of a given self-reported skill level, which we use to account for any differences between immigrant self-reported skill levels and their effective skills according to the Spanish labor market. We find that the immigrant surplus amounts to 0.04 percent of GDP at the national level and it is even higher for some of the main immigrant-receiving regions, such as Cataluña, Valencia, Madrid, and Murcia.