Regime-Switching in the Impact of Oil Price Shocks on Stock Market Volatility: Evidence from Oil-Importing and Oil-Exporting Countries

Research has highlighted the adequacy of Markov regime-switching model to address dynamic behavior in long term stock market movements. Employing a purposed Extended regime-switching GARCH(1,1) model, this thesis further investigates the regime dependent nonlinear relationship between changes in oil price and stock market volatility in Saudi Arabia, Norway and Singapore for the period of 2001-2014. Market selection is prioritized to national dependency on oil export or import, which also rationalizes the fitness of implied bivariate volatility model. Among two regimes identified by the mean model, high stock market return-low volatility regime reflects the stable economic growth periods. The other regime characterized by low stock market return-high volatility coincides with episodes of recession and downturn. Moreover, results of volatility model provide the evidence that shocks in stock markets are less persistent during the high volatility regime. While accelerated oil price rises the stock market volatility during recessions, it reduces the stock market risk during normal growth periods in Singapore. In contrast, oil price showed no significant notable impact on stock market volatility of target oil-exporting countries in either of the volatility regime. In light to these results, international investors and policy makers could benefit the risk management in relation to oil price fluctuation.

Forward-looking versus recursive-dynamic modeling in climate policy analysis: A comparison

This paper develops a multi-regional general equilibrium model for climate policy analysis based on the latest version of the MIT Emissions Prediction and Policy Analysis (EPPA) model. We develop two versions so that we can solve the model either as a fully inter-temporal optimization problem (forward-looking, perfect foresight) or recursively. The standard EPPA model on which these models are based is solved recursively, and it is necessary to simplify some aspects of it to make inter-temporal solution possible. The forward-looking capability allows one to better address economic and policy issues such as borrowing and banking of GHG allowances, efficiency implications of environmental tax recycling, endogenous depletion of fossil resources, international capital flows, and optimal emissions abatement paths among others. To evaluate the solution approaches, we benchmark each version to the same macroeconomic path, and then compare the behavior of the two versions under a climate policy that restricts greenhouse gas emissions. We find that the energy sector and CO(2) price behavior are similar in both versions (in the recursive version of the model we force the inter-temporal theoretical efficiency result that abatement through time should be allocated such that the CO(2) price rises at the interest rate.) The main difference that arises is that the macroeconomic costs are substantially lower in the forward-looking version of the model, since it allows consumption shifting as an additional avenue of adjustment to the policy. On the other hand, the simplifications required for solving the model as an optimization problem, such as dropping the full vintaging of the capital stock and fewer explicit technological options, likely have effects on the results. Moreover, inter-temporal optimization with perfect foresight poorly represents the real economy where agents face high levels of uncertainty that likely lead to higher costs than if they knew the future with certainty. We conclude that while the forward-looking model has value for some problems, the recursive model produces similar behavior in the energy sector and provides greater flexibility in the details of the system that can be represented. (C) 2009 Elsevier B.V. All rights reserved.

Paperitehtaan sähkötasehallinta ja sähkön kysyntäjousto energiakustannusten hallinnassa

Paperiteollisuus on energiaintensiivistä teollisuutta, jossa on tehty pitkään työtä tuotantoprosessien energiatehokkuuden parantamiseksi. Paperitehtaan energiakustannuksiin voidaan kuitenkin vaikuttaa myös sähkötaseen hallinnalla ja sähkön kysyntäjouston avulla. Tehtaan seuraavan vuorokauden sähkön kulutus pyritään ennustamaan mahdollisimman tarkasti, mutta esimerkiksi paperitehtaan häiriötilanteissa sähkötase poikkeaa ennustetusta. Tällöin sähkötasetta voidaan korjata ensisijaisesti sähkön jälkimarkkinoiden eli Elbas- kaupankäynnin avulla. Ellei tasetta saada korjattua sähkön jälkimarkkinoilla tase-ero korjataan tasesähköllä, jonka hinta muodostuu säätösähkömarkkinoilla. Tasesähkön hinta saattaa poiketa Elspot- markkinahinnasta voimakkaasti, jolloin tase-erosta joko hyödytään tai hävitään kustannusmielessä. Tämän työn tarkoituksena on selvittää sähkötasehallinnan parantamisen ja sähkön kysyntäjouston vaikutukset paperitehtaan energiakustannuksiin. Työssä tutkittiin tehtaan sähkö-tasehallinnan nykytilannetta ja selvitettiin tase-erojen kustannusvaikuttavuutta. Lisäksi työssä luotiin ajomalleja sähkön kysyntäjouston toteuttamiselle massatehtaan eri tuotantoprosesseille, sekä määritettiin rajahintoja seuraavan vuorokauden energiaennusteeseen. Onnistunut energiaennuste perustuu paperitehtaan käynnin tarkkoihin ja ajankohtaisiin lähtötietoihin. Sähkötaseen poikkeamiin voidaan puolestaan varautua paremmin, kun informaatio tehtaan prosessien alasajosta tulee voimalaitoksen tietoon mahdollisimman aikaisin. Sähkötaseen poikkeamien hallinta voidaan tehdä, joko Elbas- kaupan tai tasesähkön avulla. Ajankohdasta ja tasepoikkeaman volyymista riippuen täytyy tehdä valinta, kumpi vaihtoehdoista on kustannusmielessä kannattavampi. Paperitehtaan eri prosesseille luoduilla ajomalleilla saatiin esiin huomattava säästöpotentiaali. Ajomallien noudattaminen vaatii suunnitelmallista tuotannon hallintaa ja sähkön Elspot- hinnan käyttäytymisen säännöllistä seurantaa. Seuraavan vuorokauden rajahintatietojen määrittämisen pohjalta voidaan arvioida, millä Elspot- hinnalla sähkön myynti muuttuu paperin tuotantoa kannattavammaksi.

Dye-sensitized solar cells based on perylene derivatives

The oil price rises more and more, and the world energy consumption is projected to expand by 50 percent from 2005 to 2030. Nowadays intensive research is focused on the development of alternative energies. Among them, there are dye-sensitized nanocrystalline solar cells (DSSCs) “the third generation solar cells”. The latter have gained attention during the last decade and are currently subject of intense research in the framework of renewable energies as a low-cost photovoltaic. At present DSSCs with ruthenium based dyes exhibit highest efficiencies (ca 11%). The objective of the present work is to fabricate, characterize and improve the performance of DSSCs based on metal free dyes as sensitizers, especially on perylene derivatives. The work begins by a general introduction to the photovoltaics and dye-sensitized solar cells, such as the operating principles and the characteristics of the DSSCs. Chapter 2 and 3 discuss the state of the art of sensitizers used in DSSCs, present the compounds used as sensitizer in the present work and illustrate practical issues of experimental techniques and device preparation. A comparative study of electrolyte-DSSCs based on P1, P4, P7, P8, P9, and P10 are presented in chapter 4. Experimental results show that the dye structure plays a crucial role in the performance of the devices. The dye based on the spiro-concept (bipolar spiro compound) exhibited a higher efficiency than the non-spiro compounds. The presence of tert-butylpyridine as additive in the electrolyte was found to increase the open circuit voltage and simultaneously decrease the efficiency. The presence of lithium ions in the electrolyte increases both output current and the efficiency. The sensitivity of the dye to cations contained in the electrolyte was investigated in the chapter 5. FT-IR and UV-Vis were used to investigate the in-situ coordination of the cation to the adsorbed dye in the working devices. The open-circuit voltage was found to depend on the number of coordination sites in the dye. P1 with most coordination sites has shown the lowest potential drop, opposite to P7, which is less sensitive to cations in the working cells. A strategy to improve the dye adsorption onto the TiO2 surface, and thus the light harvesting efficiency of the photoanode by UV treatment, is presented in chapter 6. The treatment of the TiO2 film with UV light generates hydroxyl groups and renders the TiO2 surface more and more hydrophilic. The treated TiO2 surface reacts readily with the acid anhydride group of the dye that acts as an anchoring group and improves the dye adsorption. The short-circuit current density and the efficiency of the electrolyte-based dye cells was considerably improved by the UV treatment of the TiO2 film. Solid-state dye-sensitized solar cells (SSDs) based on spiro-MeOTAD (used as hole transport material) are studied in chapter 7. The efficiency of SSDs was globally found to be lower than that of electrolyte-based solar cells. That was due to poor pore filling of the dye-loaded TiO2 film by the spin-coated spiro-MeOTAD and to the significantly slower charge transport in the spiro-MeOTAD compared to the electrolyte redox mediator. However, the presence of the donor moieties in P1 that are structurally similar to spiro-MeOTAD was found to improve the wettability of the P1-loaded TiO2 film. As a consequence the performance of the P1-based solid-state cells is better compared to the cells based on non-spiro compounds.

Application of ARX neural networks to model the rate of penetration of petroleum wells drilling

Bit performance prediction has been a challenging problem for the petroleum industry. It is essential in cost reduction associated with well planning and drilling performance prediction, especially when rigs leasing rates tend to follow the projects-demand and barrel-price rises. A methodology to model and predict one of the drilling bit performance evaluator, the Rate of Penetration (ROP), is presented herein. As the parameters affecting the ROP are complex and their relationship not easily modeled, the application of a Neural Network is suggested. In the present work, a dynamic neural network, based on the Auto-Regressive with Extra Input Signals model, or ARX model, is used to approach the ROP modeling problem. The network was applied to a real oil offshore field data set, consisted of information from seven wells drilled with an equal-diameter bit.

Millennium development goals: progress towards the right to health in Latin america and the Caribbean

Includes bibliography

The EU regime on biofuels in transport: Still in search of sustainability. Egmont Paper No. 68, July 2014

Like other regions of the world, the EU is developing biofuels in the transport sector to reduce oil consumption and mitigate climate change. To promote them, it has adopted favourable legislation since the 2000s. In 2009 it even decided to oblige each Member State to ensure that by 2020 the share of energy coming from renewable sources reached at least 10% of their final consumption of energy in the transport sector. Biofuels are considered the main instrument to reach that percentage since the development of other alternatives (such as hydrogen and electricity) will take much longer than expected. Meanwhile, these various legislative initiatives have driven the production and consumption of biofuels in the EU. Biofuels accounted for 4.7% of EU transport fuel consumption in 2011. They have also led to trade and investment in biofuels on a global scale. This large-scale expansion of biofuels has, however, revealed numerous negative impacts. These stem from the fact that first-generation biofuels (i.e., those produced from food crops), of which the most important types are biodiesel and bioethanol, are used almost exclusively to meet the EU’s renewable 10% target in transport. Their negative impacts are: socioeconomic (food price rises), legal (land-grabbing), environmental (for instance, water stress and water pollution; soil erosion; reduction of biodiversity), climatic (direct and indirect land-use effects resulting in more greenhouse gas emissions) and public finance issues (subsidies and tax relief). The extent of such negative impacts depends on how biofuel feedstocks are produced and processed, the scale of production, and in particular, how they influence direct land use change (DLUC) and indirect land use change (ILUC) and the international trade. These negative impacts have thus provoked mounting debates in recent years, with a particular focus on ILUC. They have forced the EU to re-examine how it deals with biofuels and submit amendments to update its legislation. So far, the EU legislation foresees that only sustainable biofuels (produced in the EU or imported) can be used to meet the 10% target and receive public support; and to that end, mandatory sustainability criteria have been defined. Yet they have a huge flaw. Their measurement of greenhouse gas savings from biofuels does not take into account greenhouse gas emissions resulting from ILUC, which represent a major problem. The Energy Council of June 2014 agreed to set a limit on the extent to which firstgeneration biofuels can count towards the 10% target. But this limit appears to be less stringent than the ones made previously by the European Commission and the European Parliament. It also agreed to introduce incentives for the use of advanced (second- and third-generation) biofuels which would be allowed to count double towards the 10% target. But this again appears extremely modest by comparison with what was previously proposed. Finally, the approach chosen to take into account the greenhouse gas emissions due to ILUC appears more than cautious. The Energy Council agreed that the European Commission will carry out a reporting of ILUC emissions by using provisional estimated factors. A review clause will permit the later adjustment of these ILUC factors. With such legislative orientations made by the Energy Council, one cannot consider yet that there is a major shift in the EU biofuels policy. Bolder changes would have probably meant risking the collapse of the high-emission conventional biodiesel industry which currently makes up the majority of Europe’s biofuel production. The interests of EU farmers would have also been affected. There is nevertheless a tension between these legislative orientations and the new Commission’s proposals beyond 2020. In any case, many uncertainties remain on this issue. As long as solutions have not been found to minimize the important collateral damages provoked by the first generation biofuels, more scientific studies and caution are needed. Meanwhile, it would be wise to improve alternative paths towards a sustainable transport sector, i.e., stringent emission and energy standards for all vehicles, better public transport systems, automobiles that run on renewable energy other than biofuels, or other alternatives beyond the present imagination.

Low severity Fischer-Tropsch synthesis for the production of synthetic hydrocarbon fuels

Currently, the main source for the production of liquid transportation fuels is petroleum, the continued use of which faces many challenges including depleting oil reserves, significant oil price rises, and environmental concerns over global warming which is widely believed to be due to fossil fuel derived CO2 emissions and other greenhouse gases. In this respect, lignocellulosic or plant biomass is a particularly interesting resource as it is the only renewable source of organic carbon that can be converted into liquid transportation fuels. The gasification of biomass produces syngas which can then be converted into synthetic liquid hydrocarbon fuels by means of the Fischer-Tropsch (FT) synthesis. This process has been widely considered as an attractive option for producing clean liquid hydrocarbon fuels from biomass that have been identified as promising alternatives to conventional fossil fuels like diesel and kerosene. The resulting product composition in FT synthesis is influenced by the type of catalyst and the reaction conditions that are used in the process. One of the issues facing this conversion process is the development of a technology that can be scaled down to match the scattered nature of biomass resources, including lower operating pressures, without compromising liquid composition. The primary aims of this work were to experimentally explore FT synthesis at low pressures for the purpose of process down-scaling and cost reduction, and to investigate the potential for obtaining an intermediate FT synthetic crude liquid product that can be integrated into existing refineries under the range of process conditions employed. Two different fixed-bed micro-reactors were used for FT synthesis; a 2cm3 reactor at the University of Rio de Janeiro (UFRJ) and a 20cm3 reactor at Aston University. The experimental work firstly involved the selection of a suitable catalyst from three that were available. Secondly, a parameter study was carried out on the 20cm3 reactor using the selected catalyst to investigate the influence of reactor temperature, reactor pressure, space velocity, the H2/CO molar ratio in the feed syngas and catalyst loading on the reaction performance measured as CO conversion, catalyst stability, product distribution, product yields and liquid hydrocarbon product composition. From this parameter study a set of preferred operating conditions was identified for low pressure FT synthesis. The three catalysts were characterized using BET, XRD, TPR and SEM. The catalyst selected was an unpromoted Co/Al2O3 catalyst. FT synthesis runs on the 20cm3 reactor at Aston were conducted for 48 hours. Permanent gases and light hydrocarbons (C1-C5) were analysed in an online GC-TCD/FID at hourly intervals. The liquid hydrocarbons collected were analyzed offline using GC-MS for determination of fuel composition. The parameter study showed that CO conversion and liquid hydrocarbon yields increase with increasing reactor pressure up to around 8 bar, above which the effect of pressure is small. The parameters that had the most significant influence on CO conversion, product selectivity and liquid hydrocarbon yields were reactor temperature and catalyst loading. The preferred reaction conditions identified for this research were: T = 230ºC, P = 10 bar, H2/CO = 2.0, WHSV = 2.2 h-1, and catalyst loading = 2.0g. Operation in the low range of pressures studied resulted in low CO conversions and liquid hydrocarbon yields, indicating that low pressure BTL-FT operation may not be industrially viable as the trade off in lower CO conversions and once-through liquid hydrocarbon product yields has to be carefully weighed against the potential cost savings resulting from process operation at lower pressures.

Techno-economic assessment and uncertainty analysis of thermochemical processes for second generation biofuels

Biomass-To-Liquid (BTL) is one of the most promising low carbon processes available to support the expanding transportation sector. This multi-step process produces hydrocarbon fuels from biomass, the so-called “second generation biofuels” that, unlike first generation biofuels, have the ability to make use of a wider range of biomass feedstock than just plant oils and sugar/starch components. A BTL process based on gasification has yet to be commercialized. This work focuses on the techno-economic feasibility of nine BTL plants. The scope was limited to hydrocarbon products as these can be readily incorporated and integrated into conventional markets and supply chains. The evaluated BTL systems were based on pressurised oxygen gasification of wood biomass or bio-oil and they were characterised by different fuel synthesis processes including: Fischer-Tropsch synthesis, the Methanol to Gasoline (MTG) process and the Topsoe Integrated Gasoline (TIGAS) synthesis. This was the first time that these three fuel synthesis technologies were compared in a single, consistent evaluation. The selected process concepts were modelled using the process simulation software IPSEpro to determine mass balances, energy balances and product distributions. For each BTL concept, a cost model was developed in MS Excel to estimate capital, operating and production costs. An uncertainty analysis based on the Monte Carlo statistical method, was also carried out to examine how the uncertainty in the input parameters of the cost model could affect the output (i.e. production cost) of the model. This was the first time that an uncertainty analysis was included in a published techno-economic assessment study of BTL systems. It was found that bio-oil gasification cannot currently compete with solid biomass gasification due to the lower efficiencies and higher costs associated with the additional thermal conversion step of fast pyrolysis. Fischer-Tropsch synthesis was the most promising fuel synthesis technology for commercial production of liquid hydrocarbon fuels since it achieved higher efficiencies and lower costs than TIGAS and MTG. None of the BTL systems were competitive with conventional fossil fuel plants. However, if government tax take was reduced by approximately 33% or a subsidy of £55/t dry biomass was available, transport biofuels could be competitive with conventional fuels. Large scale biofuel production may be possible in the long term through subsidies, fuels price rises and legislation.

Markets, Depots and Sales Tables: The Women's Institute's Rural Retailing

In 1917 the Coventry Evening Telegraph noted that the problems of ‘surplus garden produce’ had arisen and that ‘smallholders were being encouraged to group together in order to bring their supplies in quantity to market. Women’s Institutes have been formed, and these arrange for the opening of a market for a certain number of hours one day a week’. WIs, which had begun being formed under the auspices of the Agricultural Organisation Society from 1915 could be seen to be one of the earliest examples of Farmers Markets. These rural women were to improve the food supply in wartime when there was a food crisis; shortages, queues, price rises and in 1918 the introduction of rationing. The WIs encouraged food saving and preservation their markets enabled small holders, cottage gardeners and allotment holders to find a financial non- exploitive outlet for their produce. Markets and retail outlets developed in a number of towns or even cities in rural areas: Worcester, Leamington Spa and Lichfield and in post-war Britain depot trading centres were set up in some county towns Maidstone in Kent in 1919, Winchester in 1920. Between them they provided rural women with a retail space initially for their garden produce and then in time for the preserves, baking and craftwork. Jam, cakes, toys, knitted toys and garments even a wedding trousseau were ordered or sold through these retail outlets. The Markets were not restricted to WI members and often sold work produced by small­holders, the disabled and ex-servicemen. Membership required buying at least one share; as they were a co-operative venture there was a limit on the number of shares it was possible to purchase. Sales tables at some monthly WI meeting provided yet another retail outlet for rural women. This paper will explore the significance of these retail opportunities to rural women: as a chance to earn much needed cash, in placing a value on domestic labour and as an indication that when looking at rural women’s lives, in first half of the twentieth century, divisions between being consumers and producers of food and domestic products may be more fluid than it is something assumed.

Contratos futuros sobre o petróleo: um estudo sobre a assimetria na volatilidade

Mestrado em Contabilidade e Análise Financeira

Essays on Wage and Price Formation in Sweden

Study IReal Wage Determination in the Swedish Engineering Industry This study uses the monopoly union model to examine the determination of real wages and in particular the effects of active labour market programmes (ALMPs) on real wages in the engineering industry. Quarterly data for the period 1970:1 to 1996:4 are used in a cointegration framework, utilising the Johansen's maximum likelihood procedure. On a basis of the Johansen (trace) test results, vector error correction (VEC) models are created in order to model the determination of real wages in the engineering industry. The estimation results support the presence of a long-run wage-raising effect to rises in the labour productivity, in the tax wedge, in the alternative real consumer wage and in real UI benefits. The estimation results also support the presence of a long-run wage-raising effect due to positive changes in the participation rates regarding ALMPs, relief jobs and labour market training. This could be interpreted as meaning that the possibility of being a participant in an ALMP increases the utility for workers of not being employed in the industry, which in turn could increase real wages in the industry in the long run. Finally, the estimation results show evidence of a long-run wage-reducing effect due to positive changes in the unemployment rate. Study IIIntersectoral Wage Linkages in Sweden The purpose of this study is to investigate whether the wage-setting in certain sectors of the Swedish economy affects the wage-setting in other sectors. The theoretical background is the Scandinavian model of inflation, which states that the wage-setting in the sectors exposed to international competition affects the wage-setting in the sheltered sectors of the economy. The Johansen maximum likelihood cointegration approach is applied to quarterly data on Swedish sector wages for the period 1980:1–2002:2. Different vector error correction (VEC) models are created, based on assumptions as to which sectors are exposed to international competition and which are not. The adaptability of wages between sectors is then tested by imposing restrictions on the estimated VEC models. Finally, Granger causality tests are performed in the different restricted/unrestricted VEC models to test for sector wage leadership. The empirical results indicate considerable adaptability in wages as between manufacturing, construction, the wholesale and retail trade, the central government sector and the municipalities and county councils sector. This is consistent with the assumptions of the Scandinavian model. Further, the empirical results indicate a low level of adaptability in wages as between the financial sector and manufacturing, and between the financial sector and the two public sectors. The Granger causality tests provide strong evidence for the presence of intersectoral wage causality, but no evidence of a wage-leading role in line with the assumptions of the Scandinavian model for any of the sectors. Study IIIWage and Price Determination in the Private Sector in Sweden The purpose of this study is to analyse wage and price determination in the private sector in Sweden during the period 1980–2003. The theoretical background is a variant of the “Imperfect competition model of inflation”, which assumes imperfect competition in the labour and product markets. According to the model wages and prices are determined as a result of a “battle of mark-ups” between trade unions and firms. The Johansen maximum likelihood cointegration approach is applied to quarterly Swedish data on consumer prices, import prices, private-sector nominal wages, private-sector labour productivity and the total unemployment rate for the period 1980:1–2003:3. The chosen cointegration rank of the estimated vector error correction (VEC) model is two. Thus, two cointegration relations are assumed: one for private-sector nominal wage determination and one for consumer price determination. The estimation results indicate that an increase of consumer prices by one per cent lifts private-sector nominal wages by 0.8 per cent. Furthermore, an increase of private-sector nominal wages by one per cent increases consumer prices by one per cent. An increase of one percentage point in the total unemployment rate reduces private-sector nominal wages by about 4.5 per cent. The long-run effects of private-sector labour productivity and import prices on consumer prices are about –1.2 and 0.3 per cent, respectively. The Rehnberg agreement during 1991–92 and the monetary policy shift in 1993 affected the determination of private-sector nominal wages, private-sector labour productivity, import prices and the total unemployment rate. The “offensive” devaluation of the Swedish krona by 16 per cent in 1982:4, and the start of a floating Swedish krona and the substantial depreciation of the krona at this time affected the determination of import prices.

E-contracting with price configuration for Web services and QoS

The large amount of information in electronic contracts hampers their establishment due to high complexity. An approach inspired in Software Product Line (PL) and based on feature modelling was proposed to make this process more systematic through information reuse and structuring. By assessing the feature-based approach in relation to a proposed set of requirements, it was showed that the approach does not allow the price of services and of Quality of Services (QoS) attributes to be considered in the negotiation and included in the electronic contract. Thus, this paper also presents an extension of such approach in which prices and price types associated to Web services and QoS levels are applied. An extended toolkit prototype is also presented as well as an experiment example of the proposed approach.

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.