New Economics Papers
on Computational Economics
Issue of 2005‒07‒11
four papers chosen by

  1. An Agent-Based Computational Laboratory for Testing the Economic Reliability of Wholesale Power Market Designs By Koesrindartoto, Deddy; Sun, Junjie; Tesfatsion, Leigh S.
  2. Democracy and Economic Development: a Fuzzy Classification Approach By Ana Margarida Oliveira Brochado; Francisco Vitorino Martins
  3. SOM-based Data Analysis of Speculative Attacks' Real Effects By Ismael E Arciniegas Rueda; Fabio Arciniegas
  4. A Single-Product Inventory Model for Multiple Demand Classes By Arslan, Hasan; Graves, Stephen C.; Roemer, Thomas

  1. By: Koesrindartoto, Deddy; Sun, Junjie; Tesfatsion, Leigh S.
    Abstract: In April 2003 the U.S. Federal Energy Regulatory Commission (FERC) proposed the Wholesale Power Market Platform (WPMP) for common adoption by U.S. wholesale power markets. The WPMP is a complicated market design that has been adopted in some regions of the U.S. but resisted in others on the grounds that its reliability has not yet been sufficiently tested. This article reports on the development of an agent-based computational framework for exploring the economic reliability of the WPMP. The key issue under study is the extent to which the WPMP is capable of sustaining efficient, orderly, and fair market outcomes over time despite attempts by market participants to gain advantage through strategic pricing, capacity withholding, and/or induced transmission congestion.
    JEL: B4 C0 C6 C7 L1 L5 Q4
    Date: 2005–07–06
  2. By: Ana Margarida Oliveira Brochado (Faculdade de Economia, Universidade do Porto); Francisco Vitorino Martins (Faculdade de Economia, Universidade do Porto)
    Abstract: The aim of this work is to (1) analyse whether countries differ on political indicators (democracy, rule of law, government effectiveness and corruption) and (2) study whether countries with different political profiles are associated with different levels of economic, human development and gender-related development indicators. Using a fuzzy classification approach (fuzzy k-means algorithm), we propose a typology of 124 countries based on 10 political variables. Six segments are identified; these political groups implicate the access to different levels of economic and human development. In this study evidence of a positive but not perfect relationship between democracy and economic and human development is observed, thus presenting new insights for the understanding of the heterogeneity of behaviors relatively to political indicators.
    Keywords: Democracy, Economic Development, Fuzzy k-means
    JEL: C21 C61 O10 O57
    Date: 2005–07
  3. By: Ismael E Arciniegas Rueda (Constellation New Energy); Fabio Arciniegas (Central American Bank of Economic Integration)
    Abstract: In some cases, currency crises are followed by strong recessions (e.g., recent Asian and Argentinean crises), but in other cases they are not. This paper uses Self-Organizing Maps (SOM) to search for meaningful associations between speculative attacks' real effects and 28 variables that characterize the economic, financial, legal, and socio-political structure of the country at the onset of the attack. SOM is a neural network-based generalization of Principal Component Analysis (PCA) that provides an efficient non-linear projection of the multidimensional data space on a curved surface. This paper finds a strong association of speculative attacks' real effects with fundamentals and the banking sector structure
    Keywords: exploratory data analysis, self-organizing maps, neural networks, speculative attacks' real effects
    JEL: F3 F4
    Date: 2005–07–04
  4. By: Arslan, Hasan; Graves, Stephen C.; Roemer, Thomas
    Abstract: We consider a single-product inventory system that serves multiple demand classes, which differ in their shortage costs or service level requirements. We assume a critical-level control policy, and show the equivalence between this inventory system and a serial inventory system. Based on this equivalence, we develop a model for cost evaluation and optimization, under the assumptions of Poisson demand, deterministic replenishment lead-time, and a continuous-review (Q, R) policy with rationing. We propose a computationally-efficient heuristic and develop a bound on its performance. We provide a numerical experiment to show the effectiveness of the heuristic and the value from a rationing policy. Finally, we describe how to extend the model to permit service times, and to embed within a multi-echelon setting.
    Keywords: Single-Product Inventory Model,
    Date: 2005–05–27

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