Price Is a Better Climate Commitment

Commitment in First-Price Auctions

We study a variation of the single-item sealed-bid first-price auction wherein one bidder (the leader) publicly commits to a strategy before the others submit their bids. We fully characterize the committed mixed strategy that is optimal for the leader, and find that the leader and the follower with the highest valuation strictly benefit from the commitment. We further show that compared with t...

The climate change commitment.

Even if atmospheric composition were fixed today, global-mean temperature and sea level rise would continue due to oceanic thermal inertia. These constant-composition (CC) commitments and their uncertainties are quantified. Constant-emissions (CE) commitments are also considered. The CC warming commitment could exceed 1 degrees C. The CE warming commitment is 2 degrees to 6 degrees C by the yea...

A Better Investment Climate for

Price Based Unit Commitment Problem Under Deregulation

The profit based unit commitment problem involves determining the time intervals at which a particular generating unit should be online and available for generation, and the associated generation or dispatch, the aim being to maximize its total profits based on a given price profile. This problem can be attacked by various techniques like single unit dynamic programming, lagrangian relaxation, ...

Commitment to Overinvest and Price Informativeness1

A fundamental role of financial markets is to gather information on firms’ investment opportunities, and so help guide investment decisions in the real sector. In this paper we study the incentives for information production when prices perform this allocational role. We argue that firms’ overinvestment is sometimes necessary to induce speculators in financial markets to produce information. If...