The talk with present the key results of the IPCC Working Group III 5th assessment report. Concluding four years of intense scientific collaboration by hundreds of authors from around the world, the report responds to the request of the world's governments for a comprehensive, objective and policy neutral assessment of the current scientific knowledge on mitigating climate change. The report has been extensively reviewed by experts and governments to ensure quality and comprehensiveness.

Climate change 2014 - Mitigation of climate change

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The Theory of Industrial Organization

We develop a cointegrating nonlinear autoregressive distributed lag (NARDL) model in which short- and long-run nonlinearities are introduced via positive and negative partial sum decompositions of the explanatory variables. We demonstrate that the model is estimable by OLS and that reliable long-run inference can be achieved by bounds-testing regardless of the integration orders of the variables. Furthermore, we derive asymmetric dynamic multipliers that graphically depict the traverse between the short- and the long-run. The salient features of the model are illustrated using the example of the nonlinear unemployment-output relationship in the US, Canada and Japan.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2344046_code1643826.pdf?abstractid=1807745&mirid=5

Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework

The smart grid is conceived of as an electric grid that can deliver electricity in a controlled, smart way from points of generation to active consumers. Demand response (DR), by promoting the interaction and responsiveness of the customers, may offer a broad range of potential benefits on system operation and expansion and on market efficiency. Moreover, by improving the reliability of the power system and, in the long term, lowering peak demand, DR reduces overall plant and capital cost investments and postpones the need for network upgrades. In this paper a survey of DR potentials and benefits in smart grids is presented. Innovative enabling technologies and systems, such as smart meters, energy controllers, communication systems, decisive to facilitate the coordination of efficiency and DR in a smart grid, are described and discussed with reference to real industrial case studies and research projects.

Demand response and smart grids—A survey

This paper examines a potential agency conflict between mutual fund investors and mutual fund companies. Investors would like the fund company to use its judgment to maximize risk‐adjusted fund ret...

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Risk taking by mutual funds as a response to incentives

We present a method for decomposing wholesale electricity payments into production costs, inframarginal competitive rents, and payments resulting from the exercise of market power. The method also parses actual variable costs into the minimum variable costs necessary to meet demand and increased production costs caused by market power and other market inefficiencies. Using data from June 1998 to October 2000 in California, we find significant departures from competitive pricing, particularly during the high-demand summer months. Electricity expenditures in the state's restructured wholesale market rose from $2.04 billion in summer 1999 to $8.98 billion in summer 2000. We find that 21% of this increase was due to increased production costs, 20% was due to increased competitive rents, and the remaining 59% was attributable to increased market power.

/pdf/measuring-market-inefficiencies-in-california-s-restructured-1w2ag7tu82.pdf

Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market

The authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices. Among the possible sources of this asymmetry are production/inventory adjustment lags and market power of some sellers. By analyzing price transmission at different points in the distribution chain, the authors attempt to shed light on these theories. Spot prices for generic gasoline show asymmetry in responding to crude oil price changes, which may reflect inventory adjustment effects. Asymmetry also appears in the response of retail prices to wholesale price changes, possibly indicating short-run market power among retailers.

/pdf/do-gasoline-prices-respond-asymmetrically-to-crude-oil-price-1sn8j647zi.pdf

Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes

Our empirical investigation confirms the common belief that retail gasoline prices react more quickly to increases in crude oil prices than to decreases. Nearly all of the response to a crude oil price increase shows up in the pump price within 4 weeks, while decreases are passed along gradually over 8 weeks. The asymmetry could indicate market power of some producers or distributors, or it could result from inventory adjustment costs. By analyzing price transmission at different points in the distribution chain we investigate these theories. We find that some asymmetry occurs at the level of the competitive spot market for gasoline, perhaps reflecting inventory costs. Wholesale gasoline prices, however, exhibit no asymmetry in responding to crude oil price changes, indicating that refiners who set wholesale prices are not the source of the asymmetry. The most significant asymmetry appears in the response of retail prices to wholesale price changes. We argue that this probably reflects short run market power among retail gasoline sellers.

This article examines the importance of route and airport dominance in determining the degree of market power exercised by an airline. The results indicate that an airline's share of passengers on a route and at the endpoint airports significantly influences its ability to mark price above cost. The high markups of a dominant airline, however, do not create much of an "umbrella" effect from which carriers with smaller operations in the same market can benefit. The article suggests a number of possible explanations for this asymmetry.

Hubs and high fares: dominance and market power in the u.s. airline industry

This article estimates the importance of route and airport dominance in determining the degree of market power exercised by an airline. The results indicate that an airline's share of passengers on a route and at the endpoint airports significantly influences its ability to mark up price above cost. The high markups of a dominant airline, however, do not create much of an "umbrella" effect from which carriers with smaller operations in the same markets can benefit. The article suggests a number of possible explanations for this asymmetry.

Severin Borenstein

Papers

Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market

Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes

Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes

Hubs and high fares: dominance and market power in the u.s. airline industry

Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry