Auctions is an increasingly popular instrument for introducing competitiveness in the support schemes for renewable energy, however, designing successful auctions appears to be a challenge. Policy makers seeking to introduce auctions are faced with a range of design choices, which may affect the auction outcome significantly. This paper investigates the past experiences with auction implementations in 13 countries. We highlight popular design choices and evaluate auction performances based on a set of assessment criteria. We find that as a market-based support mechanism auctions can help driving down support costs, however, they are also prone to design errors. Adjusting the auction design to the specific conditions (national and marked) is a key parameter for success.
How do people assess risks associated with a hedonic but dangerous activity? I conduct a longitudinal field experiment (N=434) exploiting the conditions of the COVID-19 pandemic to investigate whether monetary incentives induce people to motivate their risk assessments. Each participant receives a cafe voucher with a random value: treated participants receive a 10EUR voucher, and the control group a 1.50EUR voucher. The results show that subjects who receive a high incentive not only visit cafes more often but also reduce their risk assessment relative to subjects with a low incentive. Importantly, the assessment updating happens in anticipation of the visit, suggesting that it justifies a risky activity. This finding is inconsistent with the standard notion of Bayesian updating but consistent with motivated reasoning. It is robust to different risk measures (incentivized and non-incentivized) and does not lend support for alternative explanations, such as visits at less busy times or additional information acquisition. The data further suggests that the formation of motivated risk assessments is supported by selective recall of previous assessments. Treated subjects systematically underestimate former assessments relative to subjects of the control group.
We study the role of beliefs in driving support for gender-related affirmative action (AA) in a series of online experiments. Participants act as employers who decide whether to use AA in hiring. We implement three treatments to disentangle preferences for AA stemming from i) perceived gender differences in productivity, ii) perceived effects of AA on productivity, or iii) other non-material motives. Around 1/3 of employers consistently implement AA, and we do not find any significant difference across treatments, despite successfully altering beliefs about productivity differences. Our results suggest that AA choice reflects a more intrinsic and inelastic preference for advancing female candidates.
Despite the intuition that risk preferences affect intertemporal choice because the future is uncertain, time discounting is commonly regarded as a reflection of impatience. This interpretation of time discounting rests on the assumption that risk preferences are fully controlled for in the estimation of time discounting and no longer act as a confounder. However, the evidence provided in this paper contradicts this standard interpretation. Through an experiment, we show that despite accounting for the utility curvature—the established approach to control for risk preferences—about 43% of the observed time discounting can be explained by an aversion against future uncertainty rather than impatience. Future uncertainty, although small, receives disproportional weight because subjects engage in subproportional probability weighting, an important characteristic of risk preferences that does not feature in the standard risk framework of most intertemporal choice models. Our finding implies that many people do not demand compensation for their waiting time but rather for an uncertain future.
According to the report, public utility commissions (PUCs) are increasingly adopting, or considering the adoption of integrated resource planning (IRP) for local gas distribution companies (LDCs). The Energy Policy Act of 1992 (EPAct) requires PUCs to consider IRP for gas LDCs. This study has two major objectives: (1) to help PUCs develop appropriate regulatory approaches with regard to IRP for gas LDCs; and (2) to help PUCs respond to the EPAct directive. The study finds that it is appropriate for PUCs to pursue energy efficiency within the traditional regulatory framework of minimizing private costs of energy production and delivery; and PUCs should play a limited role in addressing environmental externalities. The study also finds that in promoting energy efficiency, PUCs should pursue policies that are incentive-based, procompetitive, and sensitive to rate impacts. The study evaluates a number of traditional and nontraditional ratemaking mechanisms on the basis of cost minimization, energy efficiency, competitiveness, and other criteria. The mechanisms evaluated include direct recovery of DSM expenses, lost revenue adjustments for DSM options, revenue decoupling mechanisms, sharing of DSM cost savings, performance-based rate of return for DSM, provision of DSM as a separate service, deregulation of DSM service, price caps, and deregulation of the noncore gas market. The study concludes with general recommendations for regulatory approaches and ratemaking mechanisms that PUCs may wish to consider in advancing IRP objectives.
'%3e%3cpath fill='%23012169' d='M0 0v30h60V0z'/%3e%3cpath stroke='%23fff' stroke-width='6' d='m0 0 60 30m0-30L0 30'/%3e%3cpath stroke='%23C8102E' stroke-width='4' d='m0 0 60 30m0-30L0 30' clip-path='url(%23b)'/%3e%3cpath stroke='%23fff' stroke-width='10' d='M30 0v30M0 15h60'/%3e%3cpath stroke='%23C8102E' stroke-width='6' d='M30 0v30M0 15h60'/%3e%3c/g%3e%3c/svg%3e)