Workshop MFG in Economics

Speaker : Frank Riedel (Bielefeld University) Title : Belief-Efficiency in Markets Abstract : Heterogeneous beliefs among market participants can lead to questionable speculative trading that goes beyond any risk-sharing motives. We demonstrate that such unwarranted betting behavior in market equilibrium can be mitigated by introducing nonlinear pricing for ambiguous contracts, without compromising legitimate risk-hedging activities. While Arrow-Debreu equilibria generally fail to achieve belief-neutral efficiency, we establish a modified version of the first welfare theorem in which equilibria with nonlinear prices uphold belief-neutral efficiency. Moreover, we show that belief-neutral efficiency, as a regulatory criterion, can be ensured by introducing transaction costs.

Speaker : Sean Meyn (U. Florida) Title : A Survey of Control Techniques for Distributed Electric Load Management With Implications to Market Design Abstract : For nearly a century, the remarkable flexibility of electric power demand has been recognized—and with it, the significant potential to balance supply and demand within power grids. This talk explores how that potential can be harnessed through a hierarchical control framework. The benefits are undeniably substantial, and importantly, they can be achieved without compromising the quality of service for end users. Yet progress remains stalled, hindered by a classic tragedy of the commons: when the marginal cost to consumers is zero, the market price—according to conventional economic theory—follows suit. To fully realize the promise of zero-marginal-cost resources, we must rethink prevailing economic assumptions. Material taken in part from the very recent survey,  "Control Engineer Roles in the Next Power Market Transition", https://www.annualreviews.org/content/journals/10.1146/annurev-control-030323-023057 Download slides