2015 Informs Annual Meeting

WE60

INFORMS Philadelphia – 2015

WE60 60-Room 111A, CC Operations/Economics Interface III Contributed Session

3 - The Effect of Industry-Specify Exchange Rate Movements on the Manufacturing Productivity in China Yunbin Shen, PhD Student, Tongji University, 1239th Siping Road, Shanghai, China, sybfamily@163.com, Yingzhe Gu, Yulin Fu The industry-specify real effective exchange rate (IREER) is more useful than the aggregate exchange rate on analyzing the effect of exchange rate movements on the total factor productivity (TFP). We use the product-level China customs data to calculate the IREER of 30 industries. The results of quantile regression shows that IREER has a significant impact on the TFP and many industries exhibit a downward sloping quantile regression curve, which means the selection effect and scale effect exist. WE62 62-Room 112A, CC Resilience in Power Systems Cluster: Energy Systems: Design, Operation, Reliability and Maintenance Invited Session Chair: Feng Qiu, Argonne National Laboratory, 9700 S. Cass Ave., Argonne, IL, 60439, United States of America, fqiu@anl.gov 1 - Enhancing Resilience of Power Systems with Renewables Integration Yunhe Hou, Assistant Professor, The University of Hong Kong, Room 522, CYC Building, Hong Kong, Hong Kong - PRC, yhhou@eee.hku.hk, Zhijun Qin Resilience is well identified as one of the key functionaries of the future energy delivery systems. The overall functionary requirements for a resilient power grid will be discussed first. The systematic solution to improve the self-healing capability, the key function of resilience, will be discussed in detail.Especially, the method to involve the contribution of renewables during self-healing process will be discussed. 2 - Electric Distribution Resilience – Asset vs. System Resilience to Extreme Weather Events Julia Phillips, Argonne National Laboratory, 9700 S Cass Ave, Argonne, IL, United States of America, phillipsj@anl.gov With the increase in awareness and concern surrounding extreme weather events due to climate change, resilience of the Nation’s critical lifeline infrastructure is paramount. Capturing resilience of a single asset can be complicated, while resilience for the system increases complexity dramatically. We focus on capturing system resilience of electric distribution infrastructure to extreme weather events, to include intangible resilience activities, such as planning, training and exercising. 3 - Assessing and Improving the Operational Resilience of Interdependent Energy Infrastructure Systems David Alderson, Associate Professor, Naval Postgraduate School, 1411 Cunningham Rd, Monterey, CA, 93943, United States of America, dlalders@nps.edu, W. Matthew Carlyle, Michael Dickenson We formulate and solve a model of interdependent fuel and electric power infrastructure systems that includes the fuel required to run electric power generators and the power required to pump fuel. Our model determines a set of fuel and power flows that yield minimum operating cost of both systems. We contrast solutions for individual system operation with a global solution for the combined system, and consider both worst-case disruptions and best possible mitigations to the combined system. 4 - Accident Risk Assessment in Fossil Energy Chains using a Bayesian Model Averaging Approach Matteo Spada, Senior Researcher, Paul Scherrer Institut, OHSA/D19, Villigen PSI, AG, 5232, Switzerland, matteo.spada@psi.ch, Peter Burgherr This study analyzed the risk, and its uncertainty, for fatal accidents within full fossil energy chains, collected in the Energy-related Severe Accident Database (ENSAD), through the application of a Bayesian Model Averaging. The proposed approach provides a unified framework that comprehensively covers accident risks in energy chains, and allows calculating specific risk indicators, including their uncertainties, to be used in a holistic evaluation of energy technologies.

Chair: Cigdem Gizem Korpeoglu, PhD Candidate, Carnegie Mellon University Tepper School of Business, 5700 Bunkerhill Street, Apt 804, Pittsburgh, PA, 15206, United States of America, cpala@andrew.cmu.edu 1 - Targeted Advertising and Privacy Concerns in Online Advertising Markets Nabita Penmetsa, Assistant Professor, University of Utah, Eccles School of Business, Salt Lake City, UT, 84112, United States of America, nabita@business.utah.edu We analyze the nature of competition between online advertising platforms in order to understand how privacy concerns of users influence the competitive outcome. The presence of heterogeneity in the user and the advertiser populations leads to differentiation between the platforms in the level of privacy protection that they offer to users and in the targeting capabilities that they offer to advertisers. This differentiation leads to segmentation of both the user and the advertiser markets. 2 - Asymmetric Trade Liberalization, Comparative Advantage and Heterogeneous Firms Wenxing Nie, Tongji University, 1239 Siping Road, Shanghai, P.R. China, Shanghai, China, niewenxing@tongji.edu.cn, Yingzhe Gu Asymmetric trade liberalization occurs when a country suddenly slashes or soars its trade barriers. When this happens, the country which takes initiative in reducing trade barriers would suffer from net job destructions but enjoy better welfare and higher factor rewards. The country which remains the same trade barriers would benefit from net job creations but have lower welfare and factor rewards. The comparative advantage industries have relatively higher factor rewards and job destructions. 3 - Consumer Unions: Blessing or Curse? Cigdem Gizem Korpeoglu, PhD Candidate, Carnegie Mellon University Tepper School of Business, 5700 Bunkerhill Street Apt 804, Pittsburgh, PA, 15206, United States of America, cpala@andrew.cmu.edu We study whether coalitions of consumers are beneficial to consumers when producers have market power. We refer to coalitions of consumers as consumer unions and the number of consumers in a union as union size. We establish that consumer welfare decreases with union size when the union size is above a threshold. We also prove that consumer unions discourage producers’ investments, which may have repercussions for long-term consumer welfare. WE61 61-Room 111B, CC Operations/Economics Interface II Contributed Session Chair: Yunbin Shen, PhD Student, Tongji University, 1239th Siping Road, Shanghai, China, sybfamily@163.com 1 - Judgment Error in Lottery Play: When the Hot-hand Meets the Gambler’s Fallacy Qingxia Kong, Universidad Adolfo Ibáñez, Santiago, Santiago, Chile, q.kong@uai.cl We demonstrate that lottery markets can exhibit the “hot-hand” phenomenon, where past winning numbers tend to have greater share of the betting proportion in future draws, even though past and the future events are independent. We use two sets of lottery game data to show that both the gambler’s fallacy and hot- hand fallacy can prevail under different gaming environments, contingent on the design (e.g., prize structures) of the lottery games. 2 - Oligopoly Pricing with Reference-price Effects Paola Labrecciosa, Monash University, Wellington Road, Clayton Campus, Melbourne, Australia, paola.labrecciosa@monash.edu, Luca Colombo We propose an infinite-horizon continuous-time model of oligopolistic competition with differentiated products and reference-price effects. We derive open-loop and closed-loop pricing strategies. We show that: (i) reference-price effects are pro-competitive; (ii) the equilibrium price can be either increasing or decreasing over time; (iii) when the speed of adjustment of the reference price becomes instantaneous, the stationary equilibrium price converges to the marginal cost.

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