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Restaurant owners are always looking for new ways to increase profits. In this paper, we investigate the attitudes and perceptions of restaurant customers to locally produced food and their willingness to pay a premium. This study employs a field experiment conducted in a restaurant located on a Midwest US university campus. When ordinary customers entered the restaurant, we gave them the choice of two set menus that we had systematically varied with respect to price and origin. Then, while waiting for their order, we asked them to complete a short questionnaire about attitudes and perceptions. We find that a price signal must support local food labelling to obtain an increased interest from customers. When local food was marginally more expensive than other food, more customers chose local food than if it was sold at the same price.

Tropical deforestation is responsible for 15-20% of total man-made emissions of greenhouse gases. In December 2007, at the international conference of Bali, the United Nations acknowledged that a viable solution to climate change must include a mechanism to limit deforestation and forest degradation. Today, the most widely used economic tool to reduce emissions is carbon markets: caps on emitters, and trade allowed between emitters and reducers, drive a price signal on carbon and provide incentives to control emissions. This report examines the different possibilities to broaden the range of this tool so that it helps reduce emissions from deforestation. The three main possibilities presented are a tax-based fund, the use of auctions revenues, and the issuance of tradable credits. The report does not discuss other instruments unrelated to carbon-related payments. We first summarize existing information on the causes of deforestation, and the impact forest loss has on the global climate. To the contrary of a commonly held view, we find that farmers, more than loggers, are driving deforestation. Some, mostly in Africa, cut the forest to grow staple crops, while others, especially in South America, do so in response to the increasing demand for commercial crops and cattle. Building on this analysis, we describe the different possibilities to link carbon markets to the fight against deforestation. In the latter case of the issuance of tradable credits, we find that while carbon markets could substantially increase the amount of funding available to develop projects and programs that reduce deforestation, demand for carbon credits must keep up with this potential new source of supply, probably around one billion ton of CO2 per year. As an analysis conducted by EDF shows, the emission caps currently advocated by the European Commission for Europe and by the Lieberman-Warner bill for the US would create enough demand to generate a price signal around 20 €/tCO2. Other solutions such as reserve prices in auctions or credits banking have been put forward to mitigate the risk of too many deforestation credits flooding carbon markets. In any case, reducing deforestation and maintaining a high price signal on carbon markets are like conjoined twins in the fight against climate change. Their link can be both a source of strength and vulnerability, but they eventually are both essential to achieve the ultimate goal of stabilizing the climate.

This paper examines the robustness of Lundholm's [1988] results related to the relation between signals and prices in an imperfectly competitive financial market. In particular, I am interested in finding under which conditions good news translates into higher prices in this new setup. In many rational expectations models with one risky asset (see, for instance, Hellwig [1980] and Diamond and Verrechia [1981]), it holds that the equilibrium price of the risky security increases in the signals observed by investors. In contrast, Lundholm [1988] proposes a context in which the previous intuitive result may fail. More precisely, he extends the rational expectations competitive model of Diamond and Verrecchia [1981] by assuming that each investor receives both a public and a private signal. He shows that when public and private signals' errors are

Reducing greenhouse gas emissions will require changes to the pattern of energy supply and use. Energy use is largely shaped by social factors, as is clear from comparative studies which show that there is no simple link between energy use and either wealth or climate. The same conclusion emerges from studies of the changing pattern of energy use over time in a given society. Consumer demand is not for energy as an abstract quantity but for energy services such as motive power, transport, heating and lighting. The level of demand for each of these services is largely determined by social factors. There is little evidence for the common belief that the pattern of energy use results from consumers making rational choices in a free market to maximise marginal utility. In many cases, the consumer sees no price signal at the point of use. Where there are partial price signals, as in the case of transport fuels, energy demand is highly inelastic. These considerations are crucial if there is an aim of changing the pattern of energy use. Demand for energy can be influenced by price signals, by legislation or by changing social attitudes. There is a common belief that changing demand could result in unacceptable disruption, based on the scale of price changes needed to influence demand. This body of evidence really shows that increasing prices is not a promising way to influence demand patterns. Changing social attitudes are the key to behavioural change and central to the acceptability of regulatory change. Thus significant alteration in the pattern of energy use is unlikely to occur without an improved understanding of the social dimensions of energy use.

This article clarifies the basis for peak load pricing when some customers have a steady demand and others have a specific peak period demand. Causal responsibility for peak capacity rests on both types of customers. Peles, in this journal, has proposed that electricity consumption beyond the off-peak period monthly average be priced at a higher rate than other consumption. Customers consuming only on the peak would face higher prices than those who consumed relatively less during the peak. However, such a price structure can discourage economic off-peak consumption and encourage uneconomic peak period consumption. Both steady and nonsteady demanders must face the same price signal during peak periods for the achievement of efficiency, so long as each group imposes the same costs on the system.

Most studies of the implications of fixed, predetermined or 'disequilibrium' prices have taken resort to some ad-hoc assumption concerning price formation as for instance the anticipatory price setting rule (Green and Laffont, 1981; Brunner, Cukierman and Meltzer, 1983). According to this price rule prices are predetermined equal to the rationally (homogeneously) expected Walrasian price level. However, this approach does not come to issue with the main criticism of the assumption of instantaneous market clearing, namely, that it does not delegate the price-decisions to welldefined agents pursuing well-defined objectives (Arrow, 1959). Prices remain therefore to be set by a third-party or auctioneer, although not a Walrasian auctioneer. In the present study we shall give up the assumption of instantaneous market clearing and propose a way in which an economy with predetermined prices can be constructed such that the identity and objective of price setters are well-defined. The present paper starts out from the criticism made by Arrow (1959) of the instantaneous market clearing assumption by delegating the price decisions to well-defined agents (firms) who pursue well-defined objectives. As forcefully argued by Hayek (1945) most economically relevant information is decentralized, and we analyse the coordination problem which arises when numerous price setters quote prices on differential or decentralized information. The differential information structure arises naturally from the fact that each firm observes its own sales (quantity signal) and costs (price signal). Besides this private information agents have access to aggregate information which becomes available to all agents through price figures (price signals) and output figures (quantity signals). These different sources of information are explicitly considered in the present study.

If an iterative planning procedure is cut short due to time shortage, the plan must be set subject to information gaps. But the nature of these gaps depends on which iterative procedure was used. For the case of Lange's model, Weitzman's “prices versus quantities” framework is redeveloped for the particular information gaps then found. With one good, the optimal quantity signal comes from the expected supply-demand intersection, but an optimal price signal lies between this intersection and the price from the last stage of iteration. When there are many goods, however, we cannot be so specific.

The decline in the growth rate of the national economy as shown in the statistics of the first half of 1986 has aroused the concern of theoreticians. Some people regard this as a danger signal and cast blame on the policy of macroeconomic control carried out since 1985. Others believe that a temporary fall is tolerable because it will lay the foundation for economic takeoff the ground in the future.1 This article is part of the debate, but the difference is that the model it uses completely negates the importance attached to the economic growth rate. It points out that when price signal are grossly distorted and the product mix is irrational, the economic growth rate shown in national statistics cannot reflect the rise of the people's actual standard of living, and thus a debate centering around the economic growth rate is meaningless. The whole argument is still within the framework of Soviet economic theories. The model in this article points out given China's present economic structure, if we want to i...

A method of measuring pricing efficiency in objective, quantitative terms is presented. "Evaluation of pricing efficiency" has long been the terminology used in studies of pricing accuracy. The term "price signal refraction" as used here refers to the more specific, quantifiable, and testable concept dealt with in this article. The distortion of price signals passing through one or more levels of the market is analogous to the refraction of light rays. This study evaluated price refraction at one level of the pork market. Regression models were fitted to the individual carcass data from a sample of 300 carcasses. The data were subjected to objective statistical test. The findings indicated that price refraction attributable to weight was small and insignificant but refraction attributable to backfat was large and significant. HIS article presents a method of objectively evaluating the accuracy of pricing at one level of the pork market. Inaccuracy in pricing is caused by the failure of the pricing system to transmit price signals accurately through one or more levels of the market. Pricing inaccuracy is thus associated with the distortion of price signals. The signal distortion that results is compared to the refraction of light rays. The concept of "price signal refraction" is used in this article to describe the distortion of price signals in their vertical movement through the market system.

The Australian electricity industry – like many other countries globally – is currently facing the complex challenge of reforming electricity tariffs. Momentum is growing for transitioning residential consumers toward more ‘cost-reflective’ pricing that better reflects the true costs of generation and supply, and sends a ‘price signal’ that presumably incentivises reduced consumption during peak periods. Under such tariffs, customers pay more for electricity used during times of peak demand – unlike traditional ‘flat-rate’ tariffs where the price remains stable regardless of time or demand. Pilot trials indicate that cost-reflective tariffs might succeed in reducing peak demand, but often only for a small minority of customers, such that population-wide demand response is minimal or insignificant. In this paper, we apply insights from psychology and behavioural economics to identify how cost-reflective pricing can be designed, depicted and delivered to enhance customer uptake and optimal usage –thereby facilitating ‘appropriate’ demand response – for a larger cross-section of the population. By carefully considering the likely impact of relevant cognitive biases and psychological factors –which routinely shape human decision making and behaviour – we are able to propose practical strategies that industry can adopt to maximise the prospect of cost-reflective pricing achieving significant population-level peak demand reductions, while providing shared benefits for customers, retailers, networks and regulators alike.

An empirical investigation of the competitiveness of refined product imports in the domestic market focuses on motor gasoline, residual fuel oil, middle distillates, and jet fuel. The main concern is the degree to which domestic product prices are determined by the price of imported products. An econometric model estimates the elasticity of substitution between domestic output and imports of the four products. The results show that their markets are isolated from the world product markets. The US continues to be an active importer of refined products, but for reasons unrelated to prices. This implies that any measure that affects the price of imported crude oil will increase domestic product prices. Consumers will then receive a more correct price signal in the petroleum market, and consumption of all energy sources will become more efficient. The results confirm that the US is a domestic price setter in the product markets. 26 references, 2 tables.

Consumer behavior theory is used in a cost/benefit comparison of peak-load pricing (PLP) and direct load control (DLC) to determine their short- and long-term implications. In some instances, as with timers or signals for hot-water heaters, the costs of implementing load control may be quite low. The European experience indicates that there are good potential applications of this technique for residential, commercial, and industrial consumption. However, it is possible that load control is not well suited for other applications unless more techniques are used to ration consumption. If the uniform price signal sets up incentives for uneconomic investments, the application can be self-defeating from the standpoint of social efficiency (including energy conservation). Public policy decisions should be based on more empirical testing, and these techniques should be carefully studied by both regulators and firms. 17 references, 5 figures.

Any effective energy policy must be based on a recognition of the elements of demand as well as supply. No easy task when supply policy traditionally involves only a very limited number of large utilities, whereas demand policy involves influencing the behaviour of a large number of uncoordinated individuals and organisations.

Conventional generation units encounter a changing role in modern societies’ energy supply. With increased need for flexible operation, engineers and project managers have to evaluate the benefits of technical improvements. For this purpose, a valuation tool has been developed, comparing economical cornerstones and technical constraints of generation units to European Energy Exchange prices for PHELIX 2014. It enables the user to relate a change in technical parameters to an economic effect and possible revenues. Four different types of conventional power plants are investigated in scenarios with increasing CO2 and fuel prices to determine the impact of different flexibility options. Results show that an increased ramp rate has not the same magnitude of positive economic impact as reduced minimum operation load, based on an observation on a price signal with resolution of fifteen minutes.

Inducing a shift in the electricity consumption using a broadcasted dynamic price for the energy is often proposed as a resource for providing regulating power and it is becoming an increasing research focus for enabling higher penetration of renewable energy in the current power system. This paper shows how using indirect control (or control by price) without any precautions, might easily lead to congestions in nearly saturated distribution grids. An auto tuning local controller which acts on the price signal at distribution level is proposed for solving the congestion. Simulations are performed with the CIGRE’ MV reference network with 346 electrically heated buildings as Demand Side Resources, DSRs. The dynamic hourly price of the regulating power provided by Nord Pool Spot market has been used as indirect control signal for the flexible demand.

Using Weitzman's model of regulation under uncertainty, we analyze a particular contingent price signal under the assumption of many goods and firms. In terms of information assumed available to the regulator, the analysis lies between Weitzman's 1974 and 1978 articles. Under fairly general assumptions, contingent pricing is superior to a pure price or quantity signal either if benefits are separable or if marginal cost estimation errors for different firms are uncorrelated. In more general cases the comparison is a function of such correlations and of the substitutability/complementarity of goods. In the one good/many firm case, the pure price signal is inferior.

This study investigates how the relation between public and private information signals affects the relation between a given information signal (either public or private) and security prices. I examine an exchange economy in which agents receive both a public signal and private signals about the future value of a risky asset. When the errors on the public and private signals are independent, I demonstrate that a more favorable information signal leads to higher expectations about the value of the asset and, consequently, a higher security price. It is more likely, however, that the errors on public and private signals are not independent. Positive correlation arises, for example, if both sets of signals are based on a common information source.' I show that for sufficiently correlated errors on the signals, a more favorable information signal can lead to a lower security price. This inverse price-signal relation occurs because correlated signals provide both direct and indirect information about the future value of the asset. Directly, a higher signal value implies