The Business 2.0 article "Trading Places" discusses Charles Plott's idea on how to improve energy market decisions.  Ever since Enron started to move downhill, many of its former competitors have started to harp on the markets that Enron once dominated.  Energy companies like Goldman Sachs, Intercontinental Exchange, and El Paso Energy have begun to enter into Enron's former territory.  According to Caltech's economist Charles Plott these companies should not follow Enron in exact route.  "Enron was an innovator in opening new markets," he says, "but it was not an innovator in using modern market mechanisms." 

Charles Plott is a well known economist who practices trying to replace bureaucratic oversight with competitive markets.  Plott has done work for the Federal Communications Commission by developing resourceful ways to auction off cellular radio spectrum.  Plott has also worked with NASA to set up impartial ways to hand out space-station floor space. 

Combinatorial Auctions:

In the system of dealing with energy, Plott sees the most room for improvement  within the commodity trader.  Plott has come up with an idea on how to trade and deal with energy resources.  His system is called a combinatorial auction.  In this auction, bunches of items are auctioned off at the same time to different companies (buyers). 

With this system, Plott says, "nothing sells till they all sell."  Also with this type of system the buyers and the sellers are more often than not, going to get what they want.  If this system comes together like Plott would like, you could use the Web to take part in a combinatorial auction on an energy trading site and put together the mixture of energy contracts that your company needs.  For the type of markets that Enron helped to create (markets that others wouldn't even dream of starting) the combinatorial auctions would work perfectly.

 Duncan's Uncertainty Model:

According to Duncan's Uncertainty Model, the two main aspects of a company or organization that help explain different management needs are dynamism and complexity.  Dynamism consists of the number of variables or factors involved with the constant running of the business.  Complexity is the degree at which the variables or factors move or change.  These two aspects of management needs can be compared and then combined in four different ways, depending on where the applied company or organization happens to fall in the two areas.

Dynamism

Low:                        ~Low	~Low Moderate
High:                       ~High Moderate	~High

                                  Low:                                        High:
                                                   Complexity

I believe that Charles Plott's Combinatorial Auctions would be considered to fall into the "High" box.  I believe this because this type of system has both a very high dynamism and complexity.  Combinatorial Auctions would have to deal with many different buyers at the same time which would be high dynamism.  It would also be very complex because of the degree of the change in orders, from amounts to costs, from all the buyers which would be high complexity.  Overall, it would take an amazing amount of skill and work to be able to complete the high complex and dynamic system that Mr. Charles Plott has established.