nep-cmp New Economics Papers
on Computational Economics
Issue of 2017‒10‒01
thirteen papers chosen by
Stan Miles
Thompson Rivers University

  1. Robust Toll Pricing By Trivikram Dokka Venkata Satyanaraya; Fabrice Talla Nobibon; Sonali Sen Gupta; Alain Zemkoho
  2. Designing techniques for systemic impact: lessons from C-K theory and matroid structures By Pascal Le Masson; Armand Hatchuel; Olga Kokshagina; Benoit Weil
  3. Ownership Cost Calculations for Distributed Energy Resources Using Uncertainty and Risk Analyses By S. Ali Pourmousavi; Mahdi Behrangrad; Ali Jahanbani Ardakani; M. Hashem Nehrir
  4. Monetary Policy and Dark Corners in a stylized Agent-Based Model By Stanislao Gualdi; Marco Tarzia; Francesco Zamponi; Jean-Philippe Bouchaud
  5. Un modelo de equilibrio general dinámico para la evaluación de la política económica en Colombia By Rodrigo Suescún; Roberto Steiner
  6. Dynamic Programming Approaches for the Traveling Salesman Problem with Drone By Bouman, P.; Agatz, N.A.H.; Schmidt, M.E.
  7. Critique of Impact Assessment of Regional Trade Agreements using Non-Tariff Measures By Banga, Rashmi
  8. Model Averaging and its Use in Economics By Steel, Mark F. J.
  9. High-Dimensional $L_2$Boosting: Rate of Convergence By Ye Luo; Martin Spindler
  10. Is Rentier Capitalism That Bad? Rent, Efficiency and Inequality Dynamics By Mabrouk, Mohamed
  11. How to choose a contract type in the French Labor Market : an agent-based model By Olivier Goudet; Gérard Ballot; Jean-Daniel Kant
  12. Taxing consumption to mitigate carbon leakage By Kaushal, Kevin R.; Rosendahl, Knut Einar
  13. The market for scoops: A dynamic approach By Ascensión Andina-Díaz; José A. García-Martínez; Antonio Parravano

  1. By: Trivikram Dokka Venkata Satyanaraya; Fabrice Talla Nobibon; Sonali Sen Gupta; Alain Zemkoho
    Abstract: We study a robust toll pricing problem where toll setters and users have different level of information when taking their decisions. Toll setters do not have full information on the costs of the network and rely on historical information when determining toll rates, whereas users decide on the path to use from origin to destination knowing toll rates and having, in addition, more accurate traffic data. In this work, we first consider a single origin-destination parallel network and formulate the robust toll pricing problem as a distributionally robust optimization problem, for which we develop an exact algorithm based on a mixed-integer programming formulation and a heuristic based on two-point support distribution. We further extend our formulations to more general networks and show how our algorithms can be adapted for the general networks. Finally, we illustrate the usefulness of our approach by means of numerical experiments both on randomly generated networks and on the road network of the city of Chicago.
    Keywords: Toll-pricing, Conditional value at risk, Robust optimization
    JEL: C61 C63 D80
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:lan:wpaper:194217799&r=cmp
  2. By: Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Olga Kokshagina (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: As underlined in Arthur " s book " the nature of technology " we are very knowledgeable on the design of objects, services or technical systems, but we don " t know much on the dynamics of technologies. Still contemporary innovation often consists in designing techniques with systemic impact. They are pervasive– both invasive and perturbing-, they recompose the family of techniques. Can we model the impact and the design of such techniques? More specifically: how can one design generic technology, ie a single technology that provokes a complete reordering of families of techniques? Recent advances in design theories open new possibilities to answer these questions. In this paper we use C-K design theory and a matroid-based model of the set of techniques to propose a new model (C-K/Ma) of the dynamics of techniques, accounting for the design of generic technologies. We show: F1: C-K/Ma offers a computational model for designing a technique with systemic impact. This model sheds new light on the logics of combination in design – the model helps to identify four logics of " combinations " , from non-generative combinatorics to generative one.
    Keywords: Design theory, interdependences, matroid, systemic impact
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-01389630&r=cmp
  3. By: S. Ali Pourmousavi; Mahdi Behrangrad; Ali Jahanbani Ardakani; M. Hashem Nehrir
    Abstract: Ownership cost calculation plays an important role in optimal operation of distributed energy resources (DERs) and microgrids (MGs) in the future power system, known as smart grid. In this paper, a general framework for ownership cost calculation is proposed using uncertainty and risk analyses. Four ownership cost calculation approaches are introduced and compared based on their associated risk values. Finally, the best method is chosen based on a series of simulation results, performed for a typical diesel generator (DiG). Although simulation results are given for a DiG (as commonly used in MGs), the proposed approaches can be applied to other MG components, such as batteries, with slight modifications, as presented in this paper. The analyses and proposed approaches can be useful in MG optimal design, optimal power flow, and market-based operation of the smart grid for accurate operational cost calculations.
    Date: 2017–09
    URL: http://d.repec.org/n?u=RePEc:arx:papers:1709.08023&r=cmp
  4. By: Stanislao Gualdi (CentraleSupélec); Marco Tarzia (LPTMC - Laboratoire de Physique Théorique de la Matière Condensée - UPMC - Université Pierre et Marie Curie - Paris 6 - CNRS - Centre National de la Recherche Scientifique); Francesco Zamponi (LPTENS - Laboratoire de Physique Théorique de l'ENS - ENS Paris - École normale supérieure - Paris - UPMC - Université Pierre et Marie Curie - Paris 6 - CNRS - Centre National de la Recherche Scientifique); Jean-Philippe Bouchaud (CFM - Capital Fund Management - Capital Fund Management)
    Abstract: We generalise the stylised macroeconomic Agent-Based model introduced in our previous paper [1], with the aim of investigating the role and efficacy of monetary policy of a 'Central Bank', that sets the interest rate such as to steer the economy towards a prescribed inflation and employment level. Our major finding is that provided its policy is not too aggressive (in a sense detailed in the paper) the Central Bank is successful in achieving its goals. However, the existence of different equilibrium states of the economy, separated by phase boundaries (or " dark corners "), can cause the monetary policy itself to trigger instabilities and be counter-productive. In other words, the Central Bank must navigate in a narrow window: too little is not enough, too much leads to instabilities and wildly oscillating economies. This conclusion strongly contrasts with the prediction of DSGE models.
    Keywords: Agent-based Computational Economics
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-01370217&r=cmp
  5. By: Rodrigo Suescún; Roberto Steiner
    Abstract: Este documento presenta un modelo de equilibrio general dinámico para el análisis de la economía colombiana. A diferencia de la mayoría de modelos de equilibrio general aplicado, este integra simultáneamente (i) el modelamiento dinámico de la toma de decisiones; (ii) la posibilidad de simular política económica discrecional; y (iii) un tratamiento explícito de los encadenamientos intersectoriales en la economía. Gracias a esto, resulta idóneo para responder preguntas que no se prestan para ser estudiadas con otros modelos económicos, como los modelos de equilibrio general dinámico estocástico (DSGE) o los modelos de equilibrio general computable (CGE). El trabajo consta de cuatro capítulos. En el primero se hace una detallada revisión de la literatura, tanto teórica como de modelos aplicados al caso de Colombia. Queremos con ello hacer plena claridad respecto del vacío que pretendemos llenar con nuestro trabajo. El segundo capítulo desarrolla el modelo mientras que en el tercero se presenta la calibración de los parámetros. El cuarto capítulo se presenta un par de simulaciones para ilustrar el uso del modelo.
    Keywords: Modelos de Equilibrio General Computable, Política EconómicaEconomía Colombiana, Evaluación Económica, Colombia
    JEL: C68 D58 E60 C52 D04
    Date: 2017–07–31
    URL: http://d.repec.org/n?u=RePEc:col:000124:015736&r=cmp
  6. By: Bouman, P.; Agatz, N.A.H.; Schmidt, M.E.
    Abstract: A promising new delivery model involves the use of a delivery truck that collaborates with a drone to make deliveries. Effectively combining a drone and a truck gives rise to a new planning problem that is known as the Traveling Salesman Problem with Drone (TSP-D). This paper presents an exact solution approach for the TSP-D based on dynamic programming and present experimental results of different dynamic programming based heuristics. Our numerical experiments show that our approach can solve larger problems than the mathematical programming approaches that have been presented in the literature thus far. Moreover, we show that restrictions on the number of operations can help significantly reduce the solution times while having relatively little impact on the overall solution quality.
    Keywords: Traveling salesman problem, Vehicle routing, Drones, Dynamic Programming
    Date: 2017–09–11
    URL: http://d.repec.org/n?u=RePEc:ems:eureri:101691&r=cmp
  7. By: Banga, Rashmi
    Abstract: Abstract A recent study undertaken by Kawasaki (2017) uses a computable general equilibrium (CGE) model to estimate the impact of removal tariffs and non-tariff measures on trade flows and the overall gross domestic product (GDP) of the remaining 11 countries in the Trans-Pacific Partnership (TPP11) partner countries. This note attempts to provide insights into such estimations so as to help in real impact assessments of the tariff and non-tariff provisions of agreements such as the TPP11. It warns that policy makers who seek to rely on such studies need to be aware of the large number of assumptions that underlie the quantification of the non-tariff measures, including that regulation is necessarily negative for trade, and other limitations of the methodology used. The paper also notes these are only one aspect of the broader economic impacts of an agreement that includes chapters on intellectual property, investor protections, government procurement, and state-owned enterprises, among others.
    Keywords: TPP11, CGE, NTMS
    JEL: D58 F13 F14 F15 F17
    Date: 2017–09–15
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:81394&r=cmp
  8. By: Steel, Mark F. J.
    Abstract: The method of model averaging has become an important tool to deal with model uncertainty, in particular in empirical settings with large numbers of potential models and relatively limited numbers of observations, as are common in economics. Model averaging is a natural response to model uncertainty in a Bayesian framework, so most of the paper deals with Bayesian model averaging. In addition, frequentist model averaging methods are also discussed. Numerical methods to implement these methods are explained, and I point the reader to some freely available computational resources. The main focus is on the problem of variable selection in linear regression models, but the paper also discusses other, more challenging, settings. Some of the applied literature is reviewed with particular emphasis on applications in economics. The role of the prior assumptions in Bayesian procedures is highlighted, and some recommendations for applied users are provided
    Keywords: Bayesian methods; Model uncertainty; Normal linear model; Prior specification; Robustness
    JEL: C11 C15 C20 C52 O47
    Date: 2017–09–19
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:81568&r=cmp
  9. By: Ye Luo; Martin Spindler
    Abstract: Boosting is one of the most significant developments in machine learning. This paper studies the rate of convergence of $L_2$Boosting, which is tailored for regression, in a high-dimensional setting. Moreover, we introduce so-called \textquotedblleft post-Boosting\textquotedblright. This is a post-selection estimator which applies ordinary least squares to the variables selected in the first stage by $L_2$Boosting. Another variant is \textquotedblleft Orthogonal Boosting\textquotedblright\ where after each step an orthogonal projection is conducted. We show that both post-$L_2$Boosting and the orthogonal boosting achieve the same rate of convergence as LASSO in a sparse, high-dimensional setting. We show that the rate of convergence of the classical $L_2$Boosting depends on the design matrix described by a sparse eigenvalue constant. To show the latter results, we derive new approximation results for the pure greedy algorithm, based on analyzing the revisiting behavior of $L_2$Boosting. We also introduce feasible rules for early stopping, which can be easily implemented and used in applied work. Our results also allow a direct comparison between LASSO and boosting which has been missing from the literature. Finally, we present simulation studies and applications to illustrate the relevance of our theoretical results and to provide insights into the practical aspects of boosting. In these simulation studies, post-$L_2$Boosting clearly outperforms LASSO.
    Date: 2016–02
    URL: http://d.repec.org/n?u=RePEc:arx:papers:1602.08927&r=cmp
  10. By: Mabrouk, Mohamed
    Abstract: The current economic context shows a tendency to inequality and rather weak growth. Rent-seeking behavior is often blamed for that. The purpose of this paper is to analyze the consequences, on the accumulation trajectory, of the existence of a rent levied by the rich on the poor. The model is inspired by the articles Stiglitz 1969, Schilcht 1975 and Bourguignon 1981. In particular, convex saving is used. We seek to see to what extent the introduction of a rent may call into question the Pareto-superiority of inequality proved by Bourguignon 1981 or alter the risk of decline highlighted in Mabrouk 2016. Within the limits of the assumptions of the model and of the numerical simulations carried out, we arrive at interesting and rather unexpected observations. Namely, a moderate rent levied by the rich on the poor may not only allow a Pareto-improvement of the economy and prevent the risk of decline, but also, it may unlock the economy from under-accumulation trap even if initial capital endowment is insufficient. The disadvantages of such a rent for the poor are felt only if the economy approaches or exceeds the golden rule where the net marginal productivity of capital is zero.
    Keywords: Rent, Inequality, Efficiency, Accumulation
    JEL: D31 E13 E21 E25 O4
    Date: 2017–09–24
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:81565&r=cmp
  11. By: Olivier Goudet (SMA - Systèmes Multi-Agents - LIP6 - Laboratoire d'Informatique de Paris 6 - UPMC - Université Pierre et Marie Curie - Paris 6 - CNRS - Centre National de la Recherche Scientifique); Gérard Ballot (CRED - Centre de Recherches en Economie et Droit - UP2 - Université Panthéon-Assas - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche); Jean-Daniel Kant (SMA - Systèmes Multi-Agents - LIP6 - Laboratoire d'Informatique de Paris 6 - UPMC - Université Pierre et Marie Curie - Paris 6 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The Fixed Duration Contracts (FDC) have taken an importance place in the European labor markets, notably in France and Spain. They represent a dominant share of the hires, although most workers hold an Open Ended Contract (OEC) at any given date. There is then a permanent coexistence of the two types of contract that we explain through a trade-off that firms compute between their costs and benefits when deciding to open a vacancy. For the first time are taken simultanously into account for the OEC the firing costs, the advance notice costs, and the losses when the firm is unable to meet the legal requirements to initiate economic dismissals. For the FDC, the specific costs are the termination costs and the waiting cost when a new FDC cannot be opened immediately after a termination. Training and vacancy costs are common to both contracts and included but they are amortized over very different durations among the two contracts and these costs influence the trade-off. We extend WorkSim, an agent-based model of the French labor market which reproduces the gross flows of workers between the different states, employment (FDC and OEC), unemployment and inactivity. The theoretical framework is the costly search by the heterogenous agents, firms and individuals, who interact on the market, taking rationally bounded decisions but learning from their mistakes. The competition takes place in a labor stock-flow consistent framework, taking into account crowding out effects. The model is scaled and calibrated through a poweful algorithm to reach a steady state which reproduces the main observed variables in the labor market in the year 2011 with a correct fit. We generate the main effects of FDC, churning, screening, stepping stone, but also model in detail the buffer effect which is built on an option into an intertemporal decision framework with idiosyncratic anticipations of firms demand. The results of the sensitivity analysis show that pessimistic anticipations and the volatility of demand shocks raise the recourse to FDC but also unemployment. Increasing firing costs also raises unemployment but not in very significant way. Forbidding FDC does not change the employment significantly since the opposite effects of FDC seem to compensate each other. While the model puts into a unified framework the main theoretical ideas that yield the trade-off between FDC and OEC, and can be applied to different countries, it also offers sufficent detail to allow for labor market policy discussion in a given country.
    Keywords: contract choice,employment contract,agent-based model,Labor market,France
    Date: 2015–09–03
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-01512938&r=cmp
  12. By: Kaushal, Kevin R. (School of Economics and Business, Norwegian University of Life Sciences); Rosendahl, Knut Einar (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: Unilateral actions to reduce CO2 emissions could lead to carbon leakage such as relocation of emission-intensive and trade-exposed industries (EITE). To mitigate such leakage, countries often supplement an emissions trading system (ETS) with free allocation of allowances to exposed industries, e.g. in the form of output-based allocation (OBA). This paper examines the welfare effects of supplementing OBA with a consumption tax on EITE goods. In particular, we investigate the case when only a subset of countries involved in a joint ETS introduces such a tax. The analytical results suggest that the consumption tax would have unambiguously global welfare improving effects, and under certain conditions have welfare improving effects for the tax introducing country as well. Numerical simulations in the context of the EU ETS support the analytical findings, including that the consumption tax is welfare improving for the single country that implements the tax.
    Keywords: Carbon leakage; Output-based allocation; Consumption tax
    JEL: D61 F18 H23 Q54
    Date: 2017–09–21
    URL: http://d.repec.org/n?u=RePEc:hhs:nlsseb:2017_005&r=cmp
  13. By: Ascensión Andina-Díaz (Department of Economics, University of Málaga); José A. García-Martínez (Department of Economics, University of Málaga); Antonio Parravano (Department of Economics, University of Málaga)
    Abstract: We present a dynamic model of competition and reputation in the media industry, in which firms compete for the publication of scoops and both the publication of scoops and their veracity determine a firm's future reputation. We study the dynamics of firms' reputations and how it relates to two issues: The consumers' preferences for information and the dispersion of the firms' editorial standards for quality. We obtain that in the case of a duopoly, there is only one stable steady state. In this equilibrium the two firms coexist and the identity of the firm that leads the market (i.e., whether it is the firm with the high editorial standard or with the low standard) depends on a combination of the two issues above. We then use numerical simulations to analyze the stochastic dynamics for a larger number of firms. We obtain that most of the insights gained for the duopoly case are robust to the consideration of a higher number of firms. We also draw predictions on the number of firms surviving in the long run, showing that the more severe consumers are with the publication of false stories and/or the more similar the firms' standards for quality are, the higher the number of firms in the stationary state.
    Keywords: Media industry; Competition; Reputation; Stochastic dynamics; Deterministic dynamics
    JEL: L10 L82
    Date: 2017–09
    URL: http://d.repec.org/n?u=RePEc:mal:wpaper:2017-3&r=cmp

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