Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework

In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated market design—the Wholesale Power Market Platform (WPMP)—for common adoption by all US wholesale power markets. Versions of the WPMP have been implemented in New England, New York, the mid-Atlantic states, the Midwest, the Southwest, and California. Strong opposition to the WPMP persists among some industry stakeholders, however, due largely to a perceived lack of adequate performance testing. This study reports on the model development and open-source implementation (in Java) of a computational wholesale power market organized in accordance with core WPMP features and operating over a realistically rendered transmission grid. The traders within this market model are strategic profit-seeking agents whose learning behaviors are based on data from human-subject experiments. Our key experimental focus is the complex interplay among structural conditions, market protocols, and learning behaviors in relation to short-term and longer-term market performance. Findings for a dynamic 5-node transmission grid test case are presented for concrete illustration. This article is an abridged version of Sun and Tesfatsion ST07a  

The economics of mobile payments: Understanding stakeholder issues for an emerging financial technology application

Economic theory provides a unique vantage point from which to examine issues with respect to emerging technologies, where standards and adoption, business process changes and implementation outcomes, information security, investments and business value, and industry impact require care and consideration on the part of senior management strategists and financial services leaders. In this article, we examine a new technology application which is coming into its own around the world, in association with the revolution in wireless connectivity: mobile payments. Although there are likely to be nuances and surprises with this technology application, we caution the reader to recognize that many of the same economic forces will be at work as were with other financial services and related technology applications in the past. We apply a robust evaluative framework that permits identification of the relevant stakeholders and applicable theory in the analysis of consumer, firm, business process, market, industrial and social issues. Our findings are intended to guide senior managers in dealing with the economic aspects of mobile payments, and to help identify some important directions for the research.  

Increasing productivity through framing effects for interactive consumer choice

Framing effects have a profound impact on most areas of human psychology. These effects have been studied extensively, but have not been applied broadly to how people interact with information on the Internet. The present paper provides evidence that frames influence peoples productivity on the Internet across a variety of tasks. Experiment 1 demonstrates that satisfaction is increased by presenting information in a list for tasks that involve simple processing of information. For more complex information, hierarchical navigation was shown to increase satisfaction significantly. Experiment 2 provides evidence that abstract information, such as monetary values, must be presented in terms of concrete frames. Specifically, we demonstrate that framing discounts in terms of dollars off, instead of additional goods received, tends to be less effective given the complexity of processing abstract information. In both cases, the type of information presented affects peoples levels of satisfaction and performance.