The Impact of Emissions Trading on the Price of Electricity in Nord Pool : Market Power and Price Determination in the Nordic Electricity Market

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market area. There is reason to believe that imperfect competition prevails in the Nordic market, thus the issue is approached through the theory of oligopolistic competition. The generation capacity available at the market, marginal cost of electricity production and seasonal levels of demand form the data based on which the dominant firms are modelled using the Cournot model of competition. The calculations are made for two levels of demand, high and low, and with several values of demand elasticity. The producers are first modelled under no carbon costs and then by adding the cost of carbon dioxide at 20€/t to those technologies subject to carbon regulation. In all cases the situation under perfect competition is determined as a comparison point for the results of the Cournot game. The results imply that the potential for market power does exist on the Nordic market, but the possibility for exercising market power depends on the demand level. In season of high demand the dominant firms may raise the price significantly above competitive levels, and the situation is aggravated when the cost of carbon dioixide is accounted for. Under low demand leves there is no difference between perfect and imperfect competition. The results are highly dependent on the price elasticity of demand.

Mathematical Aspects of Financial Markets with Frictions

Frictions are factors that hinder trading of securities in financial markets. Typical frictions include limited market depth, transaction costs, lack of infinite divisibility of securities, and taxes. Conventional models used in mathematical finance often gloss over these issues, which affect almost all financial markets, by arguing that the impact of frictions is negligible and, consequently, the frictionless models are valid approximations. This dissertation consists of three research papers, which are related to the study of the validity of such approximations in two distinct modeling problems. Models of price dynamics that are based on diffusion processes, i.e., continuous strong Markov processes, are widely used in the frictionless scenario. The first paper establishes that diffusion models can indeed be understood as approximations of price dynamics in markets with frictions. This is achieved by introducing an agent-based model of a financial market where finitely many agents trade a financial security, the price of which evolves according to price impacts generated by trades. It is shown that, if the number of agents is large, then under certain assumptions the price process of security, which is a pure-jump process, can be approximated by a one-dimensional diffusion process. In a slightly extended model, in which agents may exhibit herd behavior, the approximating diffusion model turns out to be a stochastic volatility model. Finally, it is shown that when agents' tendency to herd is strong, logarithmic returns in the approximating stochastic volatility model are heavy-tailed. The remaining papers are related to no-arbitrage criteria and superhedging in continuous-time option pricing models under small-transaction-cost asymptotics. Guasoni, Rásonyi, and Schachermayer have recently shown that, in such a setting, any financial security admits no arbitrage opportunities and there exist no feasible superhedging strategies for European call and put options written on it, as long as its price process is continuous and has the so-called conditional full support (CFS) property. Motivated by this result, CFS is established for certain stochastic integrals and a subclass of Brownian semistationary processes in the two papers. As a consequence, a wide range of possibly non-Markovian local and stochastic volatility models have the CFS property.

Should I stay or should I go? : Reproductive and dispersal strategies of site-specific liverwort species

The area of intensively managed forests, in which required conditions for several liverwort species are seldom found, has expanded over the forest landscape during the last century. Liverworts are very sensitive to habitat changes, because they demand continuously moist microclimate. Consequently, about third of the forest liverworts have been classified as threatened or near threatened in Finland. The general objective of this thesis is to increase knowledge of the reproductive and dispersal strategies of the substrate-specific forest bryophytes. A further aim was to develop recommendations for conservation measures for species inhabiting unstable and stable habitats in forest landscape. Both population ecological and genetic methods have been applied in the research. Anastrophyllum hellerianum inhabits spatially and temporally limited substrate patches, decaying logs, which can be considered as unstable habitats. The results show that asexual reproduction by gemmae is the dominant mode of reproduction, whereas sexual reproduction is considerably infrequent. Unlike previously assumed, not only spores but also the asexual propagules may contribute to long-distance dispersal. The combination of occasional spore production and practically continuous, massive gemma production facilitates dispersal both on a local scale and over long distances, and it compensates for the great propagule losses that take place preceding successful establishment at suitable sites. However, establishment probability of spores may be restricted because of environmental and biological limitations linked to the low success of sexual reproduction. Long-lasting dry seasons are likely to result in a low success of sexual reproduction and decreased release rate of gemmae from the shoots, and consequent fluctuations in population sizes. In the long term, the substratum limitation is likely to restrict population sizes and cause local extinctions, especially in small-sized remnant populations. Contrastingly, larger forest fragments with more natural disturbance dynamics, to which the species is adapted, are pivotal to species survival. Trichocolea tomentella occupies stable spring and mesic habitats in woodland. The relatively small populations are increasingly fragmented with a high risk for extinction for extrinsic reasons. The results show that T. tomentella mainly invests in population persistence by effective clonal growth via forming independent ramets and in competitive ability, and considerably less in sexuality and dispersal potential. The populations possess relatively high levels of genetic diversity regardless of population size and of degree of isolation. Thus, the small-sized populations inhabiting stable habitats should not be neglected when establishing conservation strategies for the species and when considering the habitat protection of small spring sites. Restricted dispersal capacity, also on a relatively small spatial scale, is likely to prevent successful (re-)colonization in the potential habitat patches of recovering forest landscapes. By contrast, random short-range dispersal of detached vegetative fragments within populations at suitable habitat seems to be frequent. Thus, the restoration actions of spring and streamside habitats close to the populations of T. tomentella may contribute to population expansion. That, in turn, decreases the harmful effects of environmental stochasticity.

Hospital-related fears and coping strategies in 4-6-year-old children

There is only little information available on the 4-6-year-old child s hospital-related fears, and on the coping with such fears, as expressed by the children themselves. However, previous data collected from parents and hospital personnel indicate that hospitalization is an anxiety-producing experience for young children. The purpose of this study was to describe the experience of hospital-related fears and the experience of coping with hospital-related fears of 4-6-year-old children. The aim of this study was to form a descriptive model of the subjective experience of hospital-related fears and coping strategies of 4-6-year old children. The data were collected by interviewing 4-6-year-old children from a hospital and kindergarten settings in Finland from 2004 to 2006. Ninety children were interviewed in order to describe the hospital-related fear and the experience of fear, and 89 to describe their coping with the fear and the experience of coping. The children were chosen through purposive sampling. The data were gathered by semi-structured interview, supported by pictures. The data about hospital-related fears and on strategies for coping with hospital-related fears were reviewed by qualitative and quantitative methods. The experience of hospital-related fears and coping with these fears were analyzed using Colaizzi s Method of Phenomenological Analysis. The results revealed that more than 90 % of the children said they were afraid of at least one thing in hospital. Most of the fears could be categorized as nursing interventions, fears of being a patient, and fears caused by the developmental stage of the child. Children interviewed in the hospital expressed substantially more fears than children interviewed in kindergarten. Children s meanings of hospital-related fears were placed into four main clusters: 1) insecurity, 2) injury, 3) helplessness, 4) and rejection. The results also showed that children have plenty of coping strategies, to deal with their fears, especially such strategies in which the children themselves play an active role. Most often mentioned coping strategies were 1) the presence of parents and other family members, 2) the help of the personnel, 3) positive images and humour, 4) play, and 5) the child s own safety toy. The children interviewed in the hospital mentioned statistically significantly more often play, positive imagination and humour as their coping strategy than children interviewed in kindergarten. The meaning of coping with hospital fears consisted of six clusters: pleasure, security, care, understanding the meaning of the situation participating, and protecting oneself. Being admitted to a hospital is an event which may increase the fears of a 4-6-year-old child. Children who have personal experience of being admitted to a hospital describe more fears than healthy children in kindergarten. For young children, hospital-related fear can be such a distressing experience that it reflects on their feelings of security and their behaviour. Children can sometimes find it difficult to admit their fear. Children need the help of adults to express their hospital-related fears, the objects of the fears, and to cope with the fears. Personnel should be aware of children s fears and support them in the use of coping strategies. In addition to the experiences of security and care, pre-school-aged children need active coping strategies that they can use themselves, regardless of the presence of the parents or nurses. Most of all, children need the possibility to play and experience pleasure. Children can also be taught coping strategies which give them an active, positive role.

The effects of the 2004 reduction in the price of alcohol on alcohol-related harm in Finland : A natural experiment based on register data

Changes in alcohol pricing have been documented as inversely associated with changes in consumption and alcohol-related problems. Evidence of the association between price changes and health problems is nevertheless patchy and is based to a large extent on cross-sectional state-level data, or time series of such cross-sectional analyses. Natural experimental studies have been called for. There was a substantial reduction in the price of alcohol in Finland in 2004 due to a reduction in alcohol taxes of one third, on average, and the abolition of duty-free allowances for travellers from the EU. These changes in the Finnish alcohol policy could be considered a natural experiment, which offered a good opportunity to study what happens with regard to alcohol-related problems when prices go down. The present study investigated the effects of this reduction in alcohol prices on (1) alcohol-related and all-cause mortality, and mortality due to cardiovascular diseases, (2) alcohol-related morbidity in terms of hospitalisation, (3) socioeconomic differentials in alcohol-related mortality, and (4) small-area differences in interpersonal violence in the Helsinki Metropolitan area. Differential trends in alcohol-related mortality prior to the price reduction were also analysed. A variety of population-based register data was used in the study. Time-series intervention analysis modelling was applied to monthly aggregations of deaths and hospitalisation for the period 1996-2006. These and other mortality analyses were carried out for men and women aged 15 years and over. Socioeconomic differentials in alcohol-related mortality were assessed on a before/after basis, mortality being followed up in 2001-2003 (before the price reduction) and 2004-2005 (after). Alcohol-related mortality was defined in all the studies on mortality on the basis of information on both underlying and contributory causes of death. Hospitalisation related to alcohol meant that there was a reference to alcohol in the primary diagnosis. Data on interpersonal violence was gathered from 86 administrative small-areas in the Helsinki Metropolitan area and was also assessed on a before/after basis followed up in 2002-2003 and 2004-2005. The statistical methods employed to analyse these data sets included time-series analysis, and Poisson and linear regression. The results of the study indicate that alcohol-related deaths increased substantially among men aged 40-69 years and among women aged 50-69 after the price reduction when trends and seasonal variation were taken into account. The increase was mainly attributable to chronic causes, particularly liver diseases. Mortality due to cardiovascular diseases and all-cause mortality, on the other hand, decreased considerably among the-over-69-year-olds. The increase in alcohol-related mortality in absolute terms among the 30-59-year-olds was largest among the unemployed and early-age pensioners, and those with a low level of education, social class or income. The relative differences in change between the education and social class subgroups were small. The employed and those under the age of 35 did not suffer from increased alcohol-related mortality in the two years following the price reduction. The gap between the age and education groups, which was substantial in the 1980s, thus further broadened. With regard to alcohol-related hospitalisation, there was an increase in both chronic and acute causes among men under the age of 70, and among women in the 50-69-year age group when trends and seasonal variation were taken into account. Alcohol dependence and other alcohol-related mental and behavioural disorders were the largest category in both the total number of chronic hospitalisation and in the increase. There was no increase in the rate of interpersonal violence in the Helsinki Metropolitan area, and even a decrease in domestic violence. There was a significant relationship between the measures of social disadvantage on the area level and interpersonal violence, although the differences in the effects of the price reduction between the different areas were small. The findings of the present study suggest that that a reduction in alcohol prices may lead to a substantial increase in alcohol-related mortality and morbidity. However, large population group differences were observed regarding responsiveness to the price changes. In particular, the less privileged, such as the unemployed, were most sensitive. In contrast, at least in the Finnish context, the younger generations and the employed do not appear to be adversely affected, and those in the older age groups may even benefit from cheaper alcohol in terms of decreased rates of CVD mortality. The results also suggest that reductions in alcohol prices do not necessarily affect interpersonal violence. The population group differences in the effects of the price changes on alcohol-related harm should be acknowledged, and therefore the policy actions should focus on the population subgroups that are primarily responsive to the price reduction.

Global processes, local strategies : migration of educated Dominicans.

The aim of this thesis is to examine migration of educated Dominicans in light of global processes. Current global developments have resulted in increasingly global movements of people, yet people tend to come from certain places in large numbers rather than others. At the same time, international migration is increasingly selective, which shows in the disproportional number of educated migrants. This study discovers individual and societal motivations that explain why young educated Dominicans decide to migrate and return. The theoretical framework of this thesis underlines that migration is a dynamic process rooted in other global developments. Migratory movements should be seen as a result of interacting macro- and microstructures, which are linked by a number of intermediate mechanisms, meso-structures. The way individuals perceive opportunity structures concretises the way global developments mediate to the micro-level. The case of the Dominican Republic shows that there is a diversity of local responses to the world system, as Dominicans have produced their own unique historical responses to global changes. The thesis explains that Dominican migration is importantly conditioned by socioeconomic and educational background. Migration is more accessible for the educated middle class, because of the availability of better resources. Educated migrants also seem less likely to rely on networks to organize their migrations. The role of networks in migration differs by socioeconomic background on the one hand, and by the specific connections each individual has to current and previous migrants on the other hand. The personal and cultural values of the migrant are also pivotal. The central argument of this thesis is that a veritable culture of migration has evolved in the Dominican Republic. The actual economic, political and social circumstances have led many Dominicans to believe that there are better opportunities elsewhere. The globalisation of certain expectations on the one hand, and the development of the specifically Dominican feeling of ‘externalism’ on the other, have for their part given rise to the Dominican culture of migration. The study also suggests that the current Dominican development model encourages migration. Besides global structures, local structures are found to ve pivotal in determining how global processes are materialised in a specific place. The research for this thesis was conducted by using qualitative methodology. The focus of this thesis was on thematic interviews that reveal the subject’s point of view and give a fuller understanding of migration and mobility of the educated. The data was mainly collected during a field research phase in Santo Domingo, the Dominican Republic in December 2009 and January 2010. The principal material consists of ten thematic interviews held with educated Dominican current or former migrants. Four expert interviews, relevant empirical data, theoretical literature and newspaper articles were also comprehensively used.

A DISCURSIVE PERSPECTIVE ON LEGITIMATION STRATEGIES IN MULTINATIONAL CORPORATIONS

Few studies have examined legitimation in multinational corporations from a discursive perspective. To complement the existing institutional literature, we adopt a critical discourse analysis perspective that allows us to examine the microlevel processes of discursive legitimation. We provide an example of a media text— dealing with a production unit shutdown—to demonstrate how this perspective elucidates the various textual strategies used to legitimate multinational corporations’ actions and their controversial consequences.

Strategies as Discursive Constructions: The Case of Airline Alliances

In this paper, we argue that by examining the discursive elements in strategy talk we can contribute to our understanding of the myriad of microprocesses and practices that make up strategies. We focus on airline alliances as a particularly illustrative case. Based on a critical discourse analysis of an extensive material of strategy talk on airline alliances, we point to five types of discursive practices that characterize strategizing in this context in 1995–2000: (1) problematization of traditional strategies; (2) rationalization, objectification and factualization of alliance benefits; (3) fixation of ambiguous independence concerns; (4) reframing of cooperation problems as ‘implementation’ issues; and (5) naturalization of alliance strategies. While we want to emphasize the context-specificity of these practices, we claim that similar types of discursive practices are also likely to be an inherent part of strategizing in other settings.

Struggles over legitimacy in global organizational restructuring: A rhetorical perspective on legitimation strategies and dynamics in a shutdown case

Critical organization scholars have focused increasing attention on industrial and organizational restructurings such as shutdown decisions. However, we know little about the rhetorical strategies used to legitimate or resist plant closures in organizational negotiations. In this paper, we draw from New Rhetoric to analyze rhetorical struggles, strategies and dynamics in unfolding organizational negotiations. We focus on the shutdown of the bus body unit of the Swedish company Volvo in Finland. We distinguish five types of rhetorical legitimation strategies and dynamics. These include the three classical dynamics of logos (rational arguments), pathos (emotional moral arguments), and ethos (authority-based arguments), but also autopoiesis (autopoietic narratives), and cosmos (cosmological constructions). Our analysis adds to the previous studies explaining how organizational restructuring as a phenomenon is legitimated, how this legitimation has changed over time, and how contemporary industrial closures are legitimated in the media. This study also increases our theoretical understanding of the role of rhetoric in legitimation more generally.

Prevalence and Forms of Bullying among Business Professionals: A Comparison of Two Different Strategies for Measuring Bullying

The aim of this study was to analyse the prevalence and forms of workplace bullying among business professionals holding predominantly managerial or expert positions. A cross-sectional survey study was conducted among Finnish professionals with a university degree in business studies. In the study two different strategies for measuring bullying were used and compared. When provided a definition of bullying, 8.8% of the respondents reported that they had at least occasionally been bullied during the past 12 months. However, when using a slightly modified version of the Negative Acts Questionnaire (Einarsen & Hoel 2001), containing a list of 32 predefined negative and potentially harassing acts, as many as 24.1% of the respondents reported that they had been subjected to at least one of the negative acts on a weekly basis. The respondents had experienced predominantly work-related negative acts, e.g. that their opinions and views were ignored, that they were given unreasonable deadlines or that information was withheld. Although the prevalence rates reported with the two strategies varied considerably, there was still consistency between the two strategies in the sense that those who had classified themselves as bullied also reported higher exposure rates to almost all of the negative acts included.

Essays on Market Microstructure: Price Discovery and Informed Trading

Market microstructure is “the study of the trading mechanisms used for financial securities” (Hasbrouck (2007)). It seeks to understand the sources of value and reasons for trade, in a setting with different types of traders, and different private and public information sets. The actual mechanisms of trade are a continually changing object of study. These include continuous markets, auctions, limit order books, dealer markets, or combinations of these operating as a hybrid market. Microstructure also has to allow for the possibility of multiple prices. At any given time an investor may be faced with a multitude of different prices, depending on whether he or she is buying or selling, the quantity he or she wishes to trade, and the required speed for the trade. The price may also depend on the relationship that the trader has with potential counterparties. In this research, I touch upon all of the above issues. I do this by studying three specific areas, all of which have both practical and policy implications. First, I study the role of information in trading and pricing securities in markets with a heterogeneous population of traders, some of whom are informed and some not, and who trade for different private or public reasons. Second, I study the price discovery of stocks in a setting where they are simultaneously traded in more than one market. Third, I make a contribution to the ongoing discussion about market design, i.e. the question of which trading systems and ways of organizing trading are most efficient. A common characteristic throughout my thesis is the use of high frequency datasets, i.e. tick data. These datasets include all trades and quotes in a given security, rather than just the daily closing prices, as in traditional asset pricing literature. This thesis consists of four separate essays. In the first essay I study price discovery for European companies cross-listed in the United States. I also study explanatory variables for differences in price discovery. In my second essay I contribute to earlier research on two issues of broad interest in market microstructure: market transparency and informed trading. I examine the effects of a change to an anonymous market at the OMX Helsinki Stock Exchange. I broaden my focus slightly in the third essay, to include releases of macroeconomic data in the United States. I analyze the effect of these releases on European cross-listed stocks. The fourth and last essay examines the uses of standard methodologies of price discovery analysis in a novel way. Specifically, I study price discovery within one market, between local and foreign traders.