Internet Economics and Commodity Markets
Markets are sensitive indicators of infrastructure disruptions and are often used to gauge public mood and awareness in crisis situations. We have recently designed and constructed a detailed agent-based analysis tool for the simulation of large commodity markets and the interdependencies with a physical infrastructure using a synthetic urban population mobility data set. The futures, forward, and real-time market models employ unique economic theory-based methods and capture the dynamics of supply and demand in a market driven economy. Innovative approaches facilitate a wide range of experiments with a high degree of realism, including:- Flexible methods of aggregating individual consumers and producers into hierarchies in order to represent buyers and suppliers in residential, commercial, and wholesale markets
- Heterogeneous demand profiles with elastic and inelastic components using time, location, activity, and demographic data for all individual consumers in a synthetic population
- User-selectable economic clearing mechanisms to accommodate an array of market types, including Vickrey auction, double auction, weighted average, and marginal price clearing
The simulation of energy markets and their interaction with electric power grids and related physical clearing has been historically emphasized, although our generic market models can be applied to any commodity. Exciting new directions currently being explored include:
- Combining market models with disease spread simulation to understand the economic consequences of anomalous events in a biological system, such as introducing an invasive species into a baseline ecosystem
- Using market simulation and telecommunications expertise to understand the evolving new economies presented by E-Commerce, Internet-based markets, and related software agents, including shopbots and pricebots
Selected Publications
I. Arciniegas and A. Marathe. Important Variables in Explaining Real-Time Peak Price in the Independent Power Market of Ontario. Utilities Policy, March 2005.
P. Mozumder and A. Marathe. Implications of an Integrated Market for Tradable Renewable Energy Contracts. Ecological Economics, 49(3) 2004: 259-272.
L. Hadsell, A. Marathe, and H. Shawky. Estimating the Volatility of Wholesale Electricity Spot Prices in the US. The Energy Journal, 25(4) 2004.
H. Shawky, A. Marathe, and C. Barrett. Estimating the Relationship Between Electricity Futures and Spot Prices in the US. Journal of Futures Market, 23(10) 2003: 931–955.
I. Arciniegas, C. Barrett, A. Marathe. Assessing the Efficiency of US Electricity
Markets.
Utilities Policy, 11(2) 2003: 75–86.
C. Barrett, D. Cook, V. Faber, G. Hicks, A. Marathe, M. Marathe, A. Srinivasan, Y. Sussmann, and H. Thornquist. Experimental Analysis of Algorithms for Bilateral-Contract Clearing Mechanisms Arising in Deregulated Power Industry. Journal of Graph Algorithms and Applications, 7(1) 2003: 3–31.
K. Atkins, C. Barrett, C. Homan, Achla Marathe, Madhav Marathe, and Shripad Thite. A Microsimlation of Alternative Designs for Electricity Markets. Los Alamos Technical Report, LA-UR-04-2032, August 2004.
K. Atkins, C. Homan, and A. Marathe. Physical Clearing Mechanisms in Power
Industry.
Proc. IEEE Power Systems Conference and Exposition, New York
City, October 2004.