A General Framework to Forecast the Adoption of Novel Products: A Case of Autonomous Vehicles

Due to the unavailability of prototypes, the early adopters of novel products actively seek information from multiple sources (e.g., media and social networks) to minimize the potential risk. The existing behavior models not only fail to capture the information propagation within the individual's social network, but also they do not...

Electricity markets operation planning with risk-averse agents: Stochastic decomposition and equilibrium

The growing penetration of renewable energy sources in electricity systems requires adapting operation models to face the inherent variability and uncertainty of wind or solar generation. In addition, the volatility of fuel prices (such as natural gas) or the uncertainty of the hydraulic natural inflows requires to take into account all these...

Potential effects of risk aversion on technology choices and security of supply: Researched with an agent-based model of a liberalised electricity market

Given the current vulnerability of the profitability of power plants to price volatilities and government policy changes, the role of risk considerations in power plant investment decisions becomes increasingly important. However, when we look at simulation studies that look into the long-term impact of different policy designs on electricity...

Now, later, or both: A closed-form optimal decision for a risk-averse buyer

Motivated by the energy domain, we examine a risk-averse buyer that has to purchase a fixed quantity of a continuous good. The buyer has two opportunities to buy: now or later. The buyer can spread the quantity over the two timeslots in any way, as long as the total quantity remains the same. The current price is known, but the future price...

Coping with the uncertainties in the climate change adaptation of river dikes using risk-aversion economic optimization

To guarantee a safe flood defence in a changing environment, the adaptation to climate change needs to be considered in the design of river dikes. However, the large uncertainty in the projections of future climate leads to varied estimations of future flood probability. How to cope with the uncertainties in future flood probability under...

Inertia in travel choice: The role of risk aversion and learning

This paper contributes to literature by showing how travellers that make normatively rational choices exhibit inertia during a series of risky choices. Our analyses complement other studies that conceive inertia as the result of boundedly rational or even non-deliberate, habitual decision-making. We start by presenting a model of risky travel...