Contributions in Merlin

Market-based measures are currently very popular among policy makers. In a system for marketable permits, relevant companies exchange permits on the theory that trading creates economic incentives that encourage firms to minimize the costs to society of pollution control. The chief appeal of economic incentives as the regulatory device for achieving environmental standards is the potentially large cost-saving that they promise. The source of these cost savings is the capacity of economic instruments to take advantage of the large differentials abatement costs across polluters, as formally proved by [74]. In chapter 2, we review fundamental concepts in environmental economics and survey the main theoretical results regarding the use of emission permits. In an effort to bridge the gap between theory and observed market-price behavior, in chapter 3 we investigate the historical time series of the SO2 and CO2 emission permits price in the U.S. market and in the EU ETS, respectively. More precisely, we advocate the use of a new GARCH-type structure for the analysis of the returns of the permit price and demonstrate its effectiveness in terms of model fit and out-of-sample value-at-risk forecasting. Taking into account the most important features of the EU ETS, in chapter 4 we provide a simple conceptual framework and develop an equilibrium model for the price of the emission permits. This chapter is similar in spirit to [44] and [91] - two papers developed in parallel to our work. Unlike these two, this chapter gives insights into the dynamics of the CO2 permit price for a finite time horizon in presence of asymmetric information. In particular, the obtained equilibrium price for emission reflects the scarcity or excess of permits in the market. Finally, we introduce a CO2-option pricing model comparison. The comparison is carried out between the conventional Black, Merton and Scholes model and our equilibrium model. In the final chapter of the thesis, chapter 5, we evaluate when it is optimal to undertake a reversible investment to reduce noxious emissions or trading permits. In other words, we evaluate the price-level at which trading permits is a cheaper solution. In particular, I derive in analytic form the premium for the flexibility embedded in emission permits, extending the works of [22] and [5]. This preliminary result explains the different behavior of the premium for the flexibility of emission permits under both reversible and irreversible investment. Such a result has also extremely interesting and practical relevance for policy makers, as discussed in the chapter.

We investigate some of the properties and extensions of a dynamic innovation network model recently introduced in. In the model, the set of efficient graphs ranges, depending on the cost for maintaining a link, from the complete graph to the (quasi-) star, varying within a well defined class of graphs. However, the interplay between dynamics on the nodes and topology of the network leads to equilibrium networks which are typically not efficient and are characterized, as observed in empirical studies of R&D networks, by sparseness, presence of clusters and heterogeneity of degree. In this paper, we analyze the relation between the growth rate of the knowledge stock of the agents from R&D collaborations and the properties of the adjacency matrix associated with the network of collaborations. By means of computer simulations we further investigate how the equilibrium network is affected by increasing the evaluation time τ over which agents evaluate whether to maintain a link or not. We show that only if τ is long enough, efficient networks can be obtained by the selfish link formation process of agents, otherwise the equilibrium network is inefficient. This work should assist in building a theoretical framework of R&D networks from which policies can be derived that aim at fostering efficient innovation networks.

Standards have become critical to information and communication technologies (ICTs) as they become complex and pervasive. We propose a process theory framework to explain anticipatory standardizing outcomes post hoc when the standardizing process is viewed as networks of events. Anticipatory standards define future capabilities for ICT ex ante in contrast to ex post standardizing existing practices or capabilities through de facto standardization in the market. The theoretical framework offers the following: a) a lexicon in the form of the ontology and typology of standardizing events; b) a grammar, or a set of combination rules, for standardizing events to build process representations; c) an analysis and appreciation of contexts in which standardizing unfolds; and d) logic yielding theoretical explanations of standardizing outcomes based on the analysis of process representations. We show how the framework can help analyze standardization data as networks of events as well as explain standardizing outcomes. We illustrate the plausibility of the approach by applying it to wireless standardization to explain standardizing outcomes.

Based on an analysis of the most active acquirers in seven industry sectors in the United States in the 1990s, we find that both a high rate of acquisitions and a high variability of the rate are negatively related to performance. An acquirer's size, the scope of its acquisition program, and acquisition experience moderate the relationship by weakening the negative effects. Our findings contribute to an improved understanding of acquisition capabilities and program-level acquisition performance, thereby adding to an emerging stream of research that is building an acquisition program perspective.

Core-collapse and the launch of a supernova explosion form a very short episode of few seconds in the evolution of a massive star, during which an enormous gravitational energy of several times 1053 erg is transformed into observable neutrino-, kinetic-, and electromagnetic radiation energy. We emphasize the wide range of matter conditions that prevail in a supernova event and sort the conditions into distinct regimes in the density and entropy phase diagram to briefly discuss their different impact on the neutrino signal, gravitational wave emission, and ejecta.

This paper derives a tax-adjusted discount rate formula with a constant proportion leverage policy, investor taxes, and risky debt. The result depends on an assumption about the treatment of taxlosses in default. We identify the assumption that justiftes the textbook approach of discounting interest tax shields at the cost of debt. We contrast this with an alternative assumption that leads to the Sick (1990) result that these should be discounted at the riskless rate. These two approachesrepresent polar cases. Each generates its results by using a different simplifying assumption, and we explain what determines the correct treatment in practice. We also discuss implementation of the valuation procedure using the capital asset pricing model.

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