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As the stock market continues its dive, economists and business columnists have blamed many factors for the ongoing financial calamity. While their hindsight might be clear as day, researchers at the DOE's Argonne National Laboratory are creating new economic models that will generate more realistic pictures of different types of markets so that policymakers can better avert future economic catastrophe. Traditional economic models rely heavily on "equilibrium theory," which holds that markets are influenced by countervailing balanced forces. Macal and his Argonne colleagues have created a new set of simulations called "agent-based models" to better anticipate how markets behave. By gaining a more precise understanding of the behavior patterns of individual actors in a market—for example, how willing they are to accept risk, how strongly they value the future or how much time and effort they are able to spend making decisions—researchers and economists can better predict and avoid future meltdowns. Agent-based models separately calculate likely decisions for each individual actor in a model, then take the results of these decisions and see what impact they have on other agents. By doing so, they have the potential to foresee a panic, a protracted "hot streak," herd mentality or a number of other market phenomena that purely rational-actor models would tend to miss. Argonne researchers have valuable experience creating these agent-based models. At the request of the Illinois Commerce Commission, Macal's group generated a model of the Illinois electrical power market. As Illinois prepared to deregulate the electrical power industry in early 2007, policymakers in Springfield asked Argonne's Decision and Information Sciences Division to examine the likely effects of differential pricing of electricity around the state and other issues associated with deregulation. Macal's expertise in behavioral economics and agent-based modeling also attracted the attention of Procter and Gamble (P&G), one of the world's largest producers of consumer products. P&G asked Macal to use models similar to those he used for the Illinois Commerce Commission in order to anticipate likely trends in consumer behavior. Macal's group used information from P&G's consumer surveys to create simulated shoppers who would react to changes in their marketing strategies and advertising campaigns.Submitted by DOE's Argonne National Laboratory
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Check out the joint Fermilab/SLAC publication symmetry.
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South Carolina teams toward ethanol
To reduce the Southeast’s dependence on oil, DOE's Savannah River National Laboratory and its partners in the South Carolina Bioenergy Research Collaborative have undertaken a $1.2 million bioethanol research project to find the best way to produce plant-based fuels in the region. The purpose of the research is to assess the potential of switchgrass and sweet sorghum as “feedstocks” that can be processed into ethanol. The project includes development of a small-scale biofuel processing plant at Clemson University’s Restoration Institute in North Charleston, S.C. The pilot plant is designed to scale up new biofuel technologies, a crucial step between small laboratory experiments and full-scale production. The facility could assist energy producers interested in energy-crop bases in the Southeast to build regional ethanol-production facilities. Ethanol made from cellulosic feedstocks, such as switchgrass, or agricultural residues such as corn stover, has the potential to reduce greenhouse gas emissions by as much as 86 percent compared to gasoline. Biofuels have the added benefit of providing a "carbon sink." As crops grow to produce the feedstocks for making the biofuel, they absorb carbon dioxide from the atmosphere. Switchgrass could become a significant source for ethanol fuel produced in South Carolina, producing as much as 800 to 1,000 gallons of ethanol per acre. Even more striking, the energy content – which is the ratio of energy delivered to the customer compared to the fossil energy used—could be as high as 10 for switchgrass, compared with 0.81 for gasoline. The South Carolina Bioenergy Research Collaborative has been formed to demonstrate the economic feasibility of using plants, such as switchgrass, trees and sorghum, to make ethanol. The collaborative includes scientists at SRNL, Clemson University and South Carolina State University, as well as industrial partners who are committed to building a biofuels-research pilot plant in the state.Submitted by DOE's Savannah River National Laboratory |
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