Insights
from Experimental Economics for the design of
Australian electricity, gas and environmental markets
A workshop for Australian stationary energy sector stakeholders
with
Professors Vernon Smith and Stephen Rassenti
George Mason University, USA
From 4-7 March 2003, Dr Vernon Smith, 2002 Nobel
Laureate in Economics, will be a Distinguished Visiting Professor at the
Faculty of Commerce and Economics, University of New South Wales. This will
continue an association with UNSW that began in 1995, when Professor Smith and
his colleague Dr Stephen Rassenti participated in a project led by Associate
Professor Hugh Outhred of UNSW to conduct experimental laboratory testing of
the then proposed National Electricity Market design.
Dr
Rassenti will again accompany Dr Smith on this visit and a workshop will be
held on Thursday 6 March at UNSW to explore insights from their ongoing
research in experimental economics for the design of electricity, gas and
environmental markets in an Australian context.
Latest news:
Wednesday 5 March – presentations are now available here. The workshop program has also been updated [pdf file].
Monday 3 March – two new papers have been added to the GMU
background papers available below.
A number of GMU background
papers covering some of their earlier work in this area are available here.
More
information on Professor Vernon Smith’s visit is available on the UNSW Faculty
of Commerce and Economics website here.
The
workshop will be presented in 4 sessions, each addressing key market design
issues raised in the COAG Energy Market Review Final Report, December 2002 (www.energymarketreform.org):
- Markets for electricity and gas: using the laboratory. This session will review
the contribution that experimental economics can make to the design of
practical electricity and gas markets, considering issues facing
Australia.
- Getting the incentives right for investment in
electricity and gas networks: This session will consider the
differences in outcomes between passive versus active network service
providers and issues associated with implementing “full nodal pricing”
- Achieving effective competition on both the supply and
demand side: This
session will consider the role of demand side participants in managing price
volatility and market power and the role of financial instrument trading
- Incorporating the environment: This session will
consider the design and performance of markets in environmental
instruments, including emission trading.
Each
session will be structured as follows:
- Professors Smith and Rassenti will outline their work
in the topic area and the lessons to be drawn from it.
- Two brief Australian perspectives on the topic will
follow (over the four sessions, these will come from ACCC, AGO, EPA of NSW,
IPART, NECA and NEMMCO)
- General discussion on the
topic will follow, concluding with a summary of insights from research to
date and a compilation of unresolved questions amenable to further
investigation by experimental economics techniques.
A
concluding session will review the workshop outcomes and the broader
implications for research.
Please contact Hugh Outhred for further information. Tel: 02 9385 4035;
email: h.outhred@unsw.edu.au.