Automated Market Makers for Energy Communities

Due to recent technological advances, new types of energy markets are emerging, shifting the leading design paradigm from a centralized, producer-centric model to a decentralized, consumer-centric one.

These new markets present novel challenges for researchers in economics. The challenge addressed by this project is how to design a pricing mechanism for energy within a community of small energy prosumers (producers-consumers) connected by a microgrid, ensuring both a stable provision of energy and a fair reward system for its participants.

Specifically, this project explores how pricing mechanisms known as Automated Market Makers (AMMs) can facilitate energy exchanges within microgrids.

Students will be asked to:

• Research consumer-centric energy markets and related technologies.
• Familiarize themselves with an economic model to define a market for energy exchanges in a microgrid.
• Gather data to simulate energy trading within a microgrid.
• Evaluate quantitatively the benefits of implementing the pricing mechanism (e.g., in terms of the change in the break-even period for investments in solar panels).
  

Additional references and a blueprint of a Python code for simulating the grid and the market mechanism will be provided at the beginning of the project.

Useful Background Knowledge:
Optimization, Microeconomics, Game Theory

References:

Parag, Y.; Sovacool, B. K. (2016). Electricity market design for the prosumer era. Nature Energy. dx.doi.org/10.1038/nenergy.2016.32

Moret, F., & Pinson, P. (2019). Energy Collectives: a Community and Fairness based Approach to Future Electricity Markets. IEEE Transactions on Power Systems, 34(5), 3994-4004. https://doi.org/10.1109/TPWRS.2018.2808961

 Decentralized Autonomous Organizations (DAOs)

Decentralized Autonomous Organizations (DAOs) have emerged as a leading governance structure for cryptocurrency-based ventures.

DAOs aim to offer a decentralized alternative to traditional corporate governance. In these systems, shares are replaced by governance tokens, and decision-making is conducted through transparent, blockchain-recorded votes. Although voting outcomes are public, participant identities can remain pseudonymous by operating through multiple blockchain addresses.

In this environment, it remains unclear whether the absence of regulatory oversight facilitates governance takeovers, and whether the promise of decentralization is ultimately undermined by the concentration of power among large token holders (“whales”).

This project focuses on analyzing the power dynamics and governance structures of DAOs.

Students will be asked to:

• Research blockchain-based governance models and the organizational structures of DAOs.
• Apply clustering and econometric techniques to study governance data.
• Analyze the temporal evolution of governance structures.
• Assess the relationship between DAO governance and the economic profitability of their associated ventures.
  

Datasets and references will be provided at the beginning of the project.

Useful Background Knowledge:
Digital Finance, Econometrics, Machine Learning (Clustering)

Analysis of Entry and Congestion in the Space Economy

The expansion of satellite deployments, in the absence of a global regulatory framework, is leading to increased orbital congestion and a growing accumulation of space debris. This congestion poses risks and economic costs for satellite operators. In particular, research should aim at understanding to what extent this issue is becoming relevant for satellite-based telecommunications infrastructures.

This project explores how economic models of entry and congestion can be applied to understand and quantify the economic costs of orbital debris.

Students will be asked to:

• Familiarize themselves with economic theories of congestion and externalities in shared environments.
• Gather data to assess the probability of collisions between satellites and orbital debris and the associated economic costs.
• Draft an economic model to understand optimal satellite entry decisions and explore possible regulatory interventions.
  

Useful Background Knowledge:
Microeconomics, Econometrics

 Blockchain and Artificial Intelligence

Advances in blockchain technology open new possibilities for designing autonomous Artificial Intelligence (AI) agents that can act as independent economic actors.

This project explores how blockchain infrastructures can empower AI agents while critically assessing the risks associated with these developments.

Students will be asked to:

• Research whether blockchain technology can enable autonomous AI behavior.
• Investigate the potential scope for applications of AI agents within decentralized environments.
• Provide a critical assessment of the risks posed by autonomous AI agents.
  

Useful Background Knowledge:
Digital Finance, Microeconomics