Optimized scheduling of integrated energy systems for low carbon economy considering carbon transaction costs

With the introduction of the“dual carbon”goal and the continuous promotion of low-carbon development,the integrated energy system(IES)has gradually become an effective way to save energy and reduce emissions.This study proposes a low-carbon economic optimization scheduling model for an IES that considers carbon trading costs.With the goal of minimizing the total operating cost of the IES and considering the transferable and curtailable characteristics of the electric and thermal flexible loads,an optimal scheduling model of the IES that considers the cost of carbon trading and flexible loads on the user side was established.The role of flexible loads in improving the economy of an energy system was investigated using examples,and the rationality and effectiveness of the study were verified through a comparative analysis of different scenarios.The results showed that the total cost of the system in different scenarios was reduced by 18.04%,9.1%,3.35%,and 7.03%,respectively,whereas the total carbon emissions of the system were reduced by 65.28%,20.63%,3.85%,and 18.03%,respectively,when the carbon trading cost and demand-side flexible electric and thermal load responses were considered simultaneously.Flexible electrical and thermal loads did not have the same impact on the system performance.In the analyzed case,the total cost and carbon emissions of the system when only the flexible electrical load response was considered were lower than those when only the flexible thermal load response was taken into account.Photovoltaics have an excess of carbon trading credits and can profit from selling them,whereas other devices have an excess of carbon trading and need to buy carbon credits.

TRADE DEPENDENCIES AND TRANSACTION COSTS: THE OC-CUPATION OF DECELEA HIGHLIGHTS BOTH THE BENEFITS AND THE DRAWBACKS OF A MARITIME ECONOMY

Thucydides asserts that the occupation of Decelea by the Spartans in 413 BC made the grain supply for Athens costly by forcing the transport from land onto the sea.This calls into question the well-established consensus that sea transport was far cheaper than land transport.This paper contends that the cost of protecting supply lines-specifically the expenses associated with the warships which escorted the supply ships-rendered the grain transported on the new route exceptionally costly.In this paper,the benefits and drawbacks of a maritime economy,including transaction costs,trade dependencies,and the capabilities of warships and supply ships are discussed.

Optimal proportional reinsurance and dividend payments with transaction costs and internal competition

We study the dividend optimization problem for an insurance company under the consideration of internal competition between different units inside company and transaction costs when dividends occur. The management of the company controls the reinsurance rate, the timing and the amount of dividends paid out to maximize the expected total dividends paid out to the shareholders until ruin time. By solving the corresponding quasi-variational inequality, we obtain the optimal return function and the optimal strategy.

FOREIGN CURRENCY OPTION PRICING WITH PROPORTIONAL TRANSACTION COSTS

The purpose of present work is to examine the financial problem of finding the universal reservation prices of a European call option written on exchange rate when there is proportional transaction costs of trading foreign currency in the market. An approach is suggested to compute the reservation bid-ask price of foreign currency call option based on maximizing the investor＇s expected utility. Option prices are determined from the investor＇s basic portfolio selection problem, without the need to solve a more complex optimization problem involving the insertion of the option payoffs into the terminal value function. Option prices are computed numerically in a Markov chain approximation for the case of exponential utility. Numerical results show that the option price bounds are almost independent of the alternative risk aversion parameter, but the bounds of NT region becomes narrower and the range of values of the initial holding for which the fair price lies within the bid-ask spread is shifted to a lower value when the risk aversion parameter increases.

Transaction Costs in Global Ecology Policy-Making

Global environmental meeting, legislating a reduction in the emission of greenhouse gases for planet earth, is what mankind now hopes for, having realized the enormous dangers in the process of climate change. Global warming is no longer denied by the so-called cornucopians （e.g. Lomberg）, but global policy-making originating in reunions of 190 governments or more stumble on collective action difficulties, spelled out in game theory. Paris will not succeed where Copenhagen failed, namely to arrive at a binding and enforceable global environment policy that will be implemented before it is too late. Instead, there will be massive transaction costs from negotiating and re-negotiating, endless voting, the making of promises exante and reneging ex post, as well as the futile attempts at any enforcement action, given state sovereignty. Mankind will have to learn how to cope with the outcomes of global warming, as resilience is the only hope.

Effects of China's Administrative Approval Reforms on Transaction Cost and Economic Growth

China＇s economic growth miracle despite complicated administrative approval formalities prompted us to raise the following question： ls it true that reforming administrative approval will promote economic growth？ Based on our analysis on market entry, we discovered that reforming administrative approval will spur economic growth by reducing transaction cost for firms. Administrative approval may suppress social cost and propel China＇s economic growth; China＇s gradualist approval reforms may indeed propel economic growth by reducing transaction cost for firms. With the data of prefecture-level cities during 2000-2013 and data of companies listed on the SME board during 2010-2014, we tested the effects of approval reforms on economic growth and on transaction cost, and employed instrumental variable and PSM for the treatment of the endogeneity problem - all these tests led to robust and consistent results. Moreover, we discovered that difference in government policy implementation in the approval process is the root cause of corruption and rent seeking.

Optimal investment with transaction costs based on exponential utility function:a parabolic double obstacle problem

This paper concerns optimal investment problem with proportional transaction costs and finite time horizon based on exponential utility function. Using a partial differential equation approach, we reveal that the problem is equivalent to a parabolic double obstacle problem involving two free boundaries that correspond to the optimal buying and selling policies. Numerical examples are obtained by the binomial method.

Matrix decomposition and Lagrangian dual method for discrete portfolio optimization under concave transaction costs

In this paper, the discrete mean-variance model is considered for portfolio selection under concave transaction costs. By using the Cholesky decomposition technique, the convariance matrix to obtain a separable mixed integer nonlinear optimization problem is decomposed. A brand-and-bound algorithm based on Lagrangian relaxation is then proposed. Computational results are reported for test problems with the data randomly generated and those from the US stock market.

Transaction costs for collaboration in the watershed management of the Cuyahoga River Area of Concern

This study examines the transaction costs of collaborative watershed management in the Cuyahoga River Area of Concern(AOC)—one of the 43 geographic areas designated by the U.S.and Canada Great Lakes Water Quality Agreement(GLWQA),where significant impairment of beneficial uses has occurred as a result of human activities.The Cuyahoga River is located in Northeast Ohio,the U.S.and flows through the City of Cleveland before draining into Lake Erie—one of the five Great Lakes of North America.The watershed is degraded due to municipal and agricultural discharges,streambank erosion,and contamination from urban and industrial sources.This research explores how a diverse group of stakeholders convened under the Cuyahoga River AOC Advisory Committee to share information,coordinate activities,agree on activities that restore beneficial uses,and support strategic management actions.In this study,23 semi-structured interviews with members of the advisory committee were conducted between January 28,2020 and April 20,2020,with follow-up emails and phone calls as needed to corroborate information.A review of research articles and government documents supported the interviews,including United States Environmental Protection Agency(U.S.EPA)and Ohio Environment Production Agency(OEPA)reports on the GLWQA and Cuyahoga River Remedial Action Plans.A third source of data is from direct participant observation at quarterly meetings of the advisory committee during 2017–2020,binational AOC conferences in 2017 and 2019,and other professional events geared towards restoring the Cuyahoga River AOC in 2016–2020.Results of this study include a set of recommendations to help guide group structure and decision-making processes,including(1)employing best available technology to organize AOC events and disseminate information;(2)supporting new members with an orientation and/or mentor to clearly define formal and informal committee rules;(3)assuring equal access to detailed information on management action plans with a real time dashboard;(4)updating voting procedures and the prioritization of management actions;and(5)better incorporating underrepresented local communities and highlevel decision makers from municipalities,government agencies,and nongovernmental organizations located within the Cuyahoga River AOC.Results help to explain the collaborative process within the advisory committee and measure the institutional performance of the advisory committee in terms of efficiency,equitability,accountability,and adaptability.

Arbitrage-free interval of American contingent claims under proportional transaction cost

In a general continuous-time market model with proportional transaction costs, we derive the range of arbitrage-free prices of American contingent claims. Using a martingale approach, we obtain the upper and the lower hedging price of American contingent claims.

Research on the Portfolio with Transaction Cost and Inflation

This paper analyzes the portfolio with inflation and transaction cost by broadening mean-variance model assumption. Based on the comparison between efficient frontier with and without transaction cost and inflation, the conclusion is drawn that the new efficient frontier is revolving and the new investment strategy changes. Furthermore, we provide a numerical example based on real world data.

EXISTENCE OF EXPECTATION EQUILIBRIUM OF REAL ASSET ECONOMIES WITH TRANSACTION COSTS

To some two\|period economies with countable infinite state spaces, the existence of expectation equilibrium of real asset economies with transaction costs is given. This work extends the researches of Zame in 1993.

Research on Efficient Frontier of Portfolios with Transaction Cost

This paper is concerned with a study on the efficient frontier characters of portfolio with transaction cost. The conclusion is drawn that all portfolios are of positive correlation on the efficient frontier with transaction cost; the sufficient condition for the derivable efficient frontier has also been achieved. Meanwhile, in comparison with the position of the efficient frontier without transaction cost in the plane (σ 2,R), the conclusion has been made that the efficient frontiers with transaction cost drift and its opening shrinks correspondingly. With this study, the content of the efficient frontier is further enriched. It’s very constructive and important for the practical portfolio investment strategy.

A Transaction Cost Analysis on the Acquisition of Rice Seed by Small-Scale Farmers in ECA Region： Generating Empirical Evidence in Tanzania

The present study is an attempt to develop empirical evidence of transaction costs that rice farmers incur in production and other factors that affect farmers＇ demand for seed and estimating the proportion of costs accounted for by transaction costs due to quality seed in the formal and informal sectors, and analyze how these costs affect sourcing decision. An agricultural household model was developed from the study area. To test the model, information was collected in a survey of 387 households. There is now empirical evidence that transaction cost in rice seed acquisition in Tanzanian agriculture is an added cost to the farmer in the process of purchasing seed. Descriptive analysis shows that about 18% of the total seed cost is accounted for transaction cost, which is 2% of the total variable cost in farmers＇ rice farming. Econometric model was fitted to the household data to determine the factors hindering farmers to use purchased quality seed. Factors that were significant in influencing transaction cost include information search, seed source, farmers＇ seed arrangements, trust, and distance from farmers＇ homestead to the seed source, location and age of the farmer. We recommend that, policy amendments inclined towards reduction of the transaction costs can improve the profitability of the rice enterprise by increasing the demand for inputs.

Cooperatives on Transaction Costs and An analysis based on a survey of apple-growing farmers

This paper presents an empirical analysis of the effect that participation in an agricultural cooperative has on the transaction costs and net income of apple- growing farmers in Shandong province. Compared with independent farming, agricultural cooperatives reduce transaction costs by 48 yuan/mu and increase farmers＇ net income by 321 yuan/mu. Other factors found to influence transaction costs and farmers＇net income were farmer＇s gender, educational attainment, farm size, the availability of market information, distance to market, and level of government support. Independent farmers＂ most common explanations for not participating in agricultural cooperatives were that doing so would not reduce transaction costs significantly and that the cooperatives would impede the autonomy of their decision-making.

A Probe into Economic Regionalization Theory Analysis Framework of Conflicts Between Scale Expansion and Transaction costs

The economic regionalization practice led by China local governments has gradually evolved into chaos. Local governments compete to declare for higher-leveled and large-scaled economic regions to obtain more economic resources and policy support in the way of policy game. The author argues that the regionalization chaos is attributed to the reason that the present theoretical support for economic regionalization overemphasizes the economic growth brought about by the economic regionalization but ignores the effect of transaction cost, which leads to constraint loss on the economic regionalization theory analysis framework. Then, the introduction of economic regionalization analysis framework based on the conflicts between scale expansion and transaction costs would establish equilibrium conditions to set up a moderate scale development for economic regions. The author hopes that the acceptance of this framework into the economic regionalization decision-making system would give guidance for making more appropriate regionalization decisions.

REAL ESTATE DEVELOPERS’CONCERNS ABOUT UNCERTAINTY IN BUILDING ENERGY EFFICIENCY(BEE)INVESTMENT-A TRANSACTION COSTS(TCS)PERSPECTIVE

Buildings account for 40% of global energy consumption and nearly one-third of global CO_(2) emissions;and the resulting carbon footprint significantly exceeds that of all forms of transportation combined. Attractive opportunities exist to reduce buildings’ energy use at lower costs and higher returns than in other sectors. This paper analyzes the concerns of uncertainty, in terms of transaction costs, to the real estate developers when they make decisions about investing in Building Energy Efficiency (BEE). To solicit views of developers regarding BEE investment, in-depth interviews were conducted with 15 executives and architects who work in big real estate development firms covering 80% of real estate activities in Hong Kong. This research applies transaction cost economics (TCE) to study the underlying reasons resulting from uncertainty that cause market reluctance to accept BEE by choice. It provides a detailed analysis of the current situation and future prospects for BEE adoption through studying the impacts from three aspects: economic, market and policy uncertainties. It delineates the market and suggests possible policy solutions to overcome the uncertainties and to attain the large-scale deployment of energy-efficient building techniques. The findings establish the groundwork for future studies on how to choose a particular policy package and what roles government should play to solve the existing problems in BEE development.

A variational inequality arising from European option pricing with transaction costs

In this paper we present a method which can transform a variational inequality with gradient constraints into a usual two obstacles problem in one dimensional case.The prototype of the problem is a parabolic variational inequality with the constraints of two first order differential inequalities arising from a two-dimensional model of European call option pricing with transaction costs.We obtain the monotonicity and smoothness of two free boundaries.

Optimal Dividend-Equity Issuance Strategy in a Dual Model with Fixed and Proportional Transaction Costs

In this paper, we consider the problem of optimal dividend payout and equity issuance for a company whose liquid asset is modeled by the dual of classical risk model with diffusion. We assume that there exist both proportional and fixed transaction costs when issuing new equity. Our objective is to maximize the expected cumulative present value of the dividend payout minus the equity issuance until the time of bankruptcy,which is defined as the first time when the company＇s capital reserve falls below zero. The solution to the mixed impulse-singular control problem relies on two auxiliary subproblems： one is the classical dividend problem without equity issuance, and the other one assumes that the company never goes bankrupt by equity issuance.We first provide closed-form expressions of the value functions and the optimal strategies for both auxiliary subproblems. We then identify the solution to the original problem with either of the auxiliary problems. Our results show that the optimal strategy should either allow for bankruptcy or keep the company＇s reserve above zero by issuing new equity, depending on the model＇s parameters. We also present some economic interpretations and sensitivity analysis for our results by theoretical analysis and numerical examples.

Mean-variance Hedging for Pricing European-type Contingent Claims with Transaction Costs

In this paper, a European-type contingent claim pricing problem withtransaction costs is considered by a mean-variance hedging argument. The investor has to paytransaction costs which are proportional to the amount of stock transacted. The writer's hedgingobject is to minimize the hedging risk, defined as the variance of hedging error at expiration, witha proper expected excess return level. At first, we consider the mean-variance hedging problem: forinitial hedging wealth f, maximizing the excess expected return under the minimum hedging risklevel V_0. On the other hand, we consider a mean-variance portfolio problem, which is to maximizethe expected return with initial wealth 0 under the same risk level V_0. The minimum initial hedgingwealth f, which can offset the difference of the maximum expected return of these two problems, isthe writer's price.