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on Contract Theory and Applications |
| By: | Zlata Sergeeva (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Long-term natural gas contracts are necessary market instruments that provide supply security for customers and demand security for producers. Nevertheless, the European Commission recently announced a plan to ban long-term contracts for unabated fossil gas after 2049. This study shows that this plan may destabilize the market due to the lack of supply security for customers and demand security for producers. |
| Keywords: | Carbon, Carbon capture and storage, CCS, Carbon neutrality |
| Date: | 2023–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2022-dp15&r=cta |
| By: | Karsten Neuhoff; Fernanda Ballesteros; Mats Kröger; Jörn C. Richstein |
| Abstract: | Renewable energy installations are rapidly gaining market share due to falling technology costs and supportive policies. Meanwhile, the energy price crisis resulting from the Russian-Ukrainian war has shifted the energy policy debate toward the question of how consumers can benefit more from the low and stable generation costs of renewable electricity. Here we suggest a Renewable Pool (“RE-Pool”) under which the government passes the conditions of Contracts-for-Difference on to consumers who thereby benefit from reliably low-cost electricity supply. We assess the effect on financing costs, scale, and system friendliness of wind investments, as well risk hedging for consumers’ volume risks and hedging incentives. |
| Keywords: | Contracts-for-Difference, renewable policy, electricity markets, financing, PPA |
| JEL: | D44 D47 G32 L94 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2035&r=cta |
| By: | MohammadTaghi Hajiaghayi; Keivan Rezaei; Suho Shin |
| Abstract: | We consider a multi-agent delegated search without money, which is the first to study the multi-agent extension of Kleinberg and Kleinberg (EC'18). In our model, given a set of agents, each agent samples a fixed number of solutions, and privately sends a signal, e.g., a subset of solutions, to the principal. Then, the principal selects a final solution based on the agents' signals. Our model captures a variety of real-world scenarios, spanning classical economical applications to modern intelligent system. In stark contrast to single-agent setting by Kleinberg and Kleinberg (EC'18) with an approximate Bayesian mechanism, we show that there exist efficient approximate prior-independent mechanisms with both information and performance gain, thanks to the competitive tension between the agents. Interestingly, however, the amount of such a compelling power significantly varies with respect to the information available to the agents, and the degree of correlation between the principal's and the agent's utility. Technically, we conduct a comprehensive study on the multi-agent delegated search problem and derive several results on the approximation factors of Bayesian/prior-independent mechanisms in complete/incomplete information settings. As a special case of independent interest, we obtain comparative statics regarding the number of agents which implies the dominance of the multi-agent setting ($n \ge 2$) over the single-agent setting ($n=1$) in terms of the principal's utility. We further extend our problem by considering an examination cost of the mechanism and derive some analogous results in the complete information setting. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.03203&r=cta |