Society by Numbers : Studies on Model-Based Explanations in the Social Sciences

The aim of this dissertation is to provide conceptual tools for the social scientist for clarifying, evaluating and comparing explanations of social phenomena based on formal mathematical models. The focus is on relatively simple theoretical models and simulations, not statistical models. These studies apply a theory of explanation according to which explanation is about tracing objective relations of dependence, knowledge of which enables answers to contrastive why and how-questions. This theory is developed further by delineating criteria for evaluating competing explanations and by applying the theory to social scientific modelling practices and to the key concepts of equilibrium and mechanism. The dissertation is comprised of an introductory essay and six published original research articles. The main theses about model-based explanations in the social sciences argued for in the articles are the following. 1) The concept of explanatory power, often used to argue for the superiority of one explanation over another, compasses five dimensions which are partially independent and involve some systematic trade-offs. 2) All equilibrium explanations do not causally explain the obtaining of the end equilibrium state with the multiple possible initial states. Instead, they often constitutively explain the macro property of the system with the micro properties of the parts (together with their organization). 3) There is an important ambivalence in the concept mechanism used in many model-based explanations and this difference corresponds to a difference between two alternative research heuristics. 4) Whether unrealistic assumptions in a model (such as a rational choice model) are detrimental to an explanation provided by the model depends on whether the representation of the explanatory dependency in the model is itself dependent on the particular unrealistic assumptions. Thus evaluating whether a literally false assumption in a model is problematic requires specifying exactly what is supposed to be explained and by what. 5) The question of whether an explanatory relationship depends on particular false assumptions can be explored with the process of derivational robustness analysis and the importance of robustness analysis accounts for some of the puzzling features of the tradition of model-building in economics. 6) The fact that economists have been relatively reluctant to use true agent-based simulations to formulate explanations can partially be explained by the specific ideal of scientific understanding implicit in the practise of orthodox economics.

Pain in juvenile idiopathic arthritis : parents and children as agents of disease management

Juvenile idiopathic arthritis (JIA) is a severe childhood disease usually characterized by long-term morbidity, unpredictable course, pain, and limitations in daily activities and social participation. The disease affects not only the child but also the whole family. The family is expected to adhere to an often very laborious regimen over a long period of time. However, the parental role is incoherently conceptualized in the research field. Pain in JIA is of somatic origin, but psychosocial factors, such as mood and self-efficacy, are critical in the perception of pain and in its impact on functioning. This study examined the factors correlating and possibly explaining pain in JIA, with a special emphasis on the mutual relations between parent- and patient-driven variables. In this patient series pain was not associated with the disease activity. The degree of pain was on average fairly low in children with JIA. When the children were clustered according to age, anxiety and depression, four distinguishable cluster groups significantly associated with pain emerged. One of the groups was described by concept vulnerability because of unfavorable variable associations. Parental depressive and anxiety symptoms accompanied by illness management had a predictive power in discriminating groups of children with varying distress levels. The parent’s and child’s perception of a child’s functional capability, distress, and somatic self-efficacy had independent explanatory power predicting the child’s pain. Of special interest in the current study was self-efficacy, which refers to the belief of an individual that he/she has the ability to engage in the behavior required for tackling the disease. In children with JIA, strong self-efficacy was related to lower levels of pain, depressive symptoms and trait anxiety. This suggests strengthening a child’s sense of self-efficacy, when helping the child to cope with his or her disease. Pain experienced by a child with JIA needs to be viewed in a multidimensional bio-psycho-social context that covers biological, environmental and cognitive behavioral mechanisms. The relations between the parent-child variables are complex and affect pain both directly and indirectly. Developing pain-treatment modalities that recognize the family as a system is also warranted.

Minimalistinen yhdyssanateoria ja käsitteiden yhdistely

The thesis aims to link the biolinguistic research program and the results of studies in comceptual combination from cognitive psychology. The thesis derives a theory of syntactic structure of noun and adjectival compounds from the Empty Lexicon Hypothesis. Two compound-forming operations are described: root-compounding and word-compounding. The aptness of theory is tested with finnish and greek compounds. From the syntactic theory semantic requirements for conceptual system are derived, especially requirements for handling morphosyntactic features. These requirements are compared to three formidable theories of conceptual combination: relation theory CARIN, Dual-Process theory and C3-theory. The claims of explanatory power of relational distributions of modifier in CARIN-theory ared discarded, as the method for sampling and building relational distributions is not reliable and the algorithmic instantiation of theory does not compute what it claims to compute. From relational theory there still remains results supporting existence of 'easy' relations for certain concepts. Dual-Process theory is found to provide results that cannot in theory be affected by linguistic system, but the basic idea of property compounds is kept. C3-theory is found to be not computationally realistic, but the basic results of diagnosticity and local properties (domains) of conceptual system are solid. The three conceptual combination models are rethought as a problem of finding the shortest route between the two concepts. The new basis for modeling is suggested to be bare conceptual landscape with morphosyntactiic or semantic features working as guidance and structural features of landscape basically unknown, but such as they react to features from linguistic system. Minimalistic principles to conceptual modeling are suggested.

The Problem of Implementation and its Relation to the Philosophy of Cognitive Science

According to certain arguments, computation is observer-relative either in the sense that many physical systems implement many computations (Hilary Putnam), or in the sense that almost all physical systems implement all computations (John Searle). If sound, these arguments have a potentially devastating consequence for the computational theory of mind: if arbitrary physical systems can be seen to implement arbitrary computations, the notion of computation seems to lose all explanatory power as far as brains and minds are concerned. David Chalmers and B. Jack Copeland have attempted to counter these relativist arguments by placing certain constraints on the definition of implementation. In this thesis, I examine their proposals and find both wanting in some respects. During the course of this examination, I give a formal definition of the class of combinatorial-state automata , upon which Chalmers s account of implementation is based. I show that this definition implies two theorems (one an observation due to Curtis Brown) concerning the computational power of combinatorial-state automata, theorems which speak against founding the theory of implementation upon this formalism. Toward the end of the thesis, I sketch a definition of the implementation of Turing machines in dynamical systems, and offer this as an alternative to Chalmers s and Copeland s accounts of implementation. I demonstrate that the definition does not imply Searle s claim for the universal implementation of computations. However, the definition may support claims that are weaker than Searle s, yet still troubling to the computationalist. There remains a kernel of relativity in implementation at any rate, since the interpretation of physical systems seems itself to be an observer-relative matter, to some degree at least. This observation helps clarify the role the notion of computation can play in cognitive science. Specifically, I will argue that the notion should be conceived as an instrumental rather than as a fundamental or foundational one.

Cultural differences and postmerger problems: Misconceptions and cognitive simplifications.

Researchers and practitioners have increasingly explained post-merger organizational problems with cultural differences, especially in the context of cross-border mergers and acquisitions. It is suggested here that cultural differences have great explanatory power in the context of post-merger change processes. There are, however, problems with a number of superficial cultural conceptions that are common in research in this area and in managerial rhetoric. This critical article provocatively delineates misconceptions widely held by researchers and practitioners in this field, which not only disregard cultural differentiation, fragmentation, inconsistencies and ambiguities, but further, illustrate a lack of understanding of cultural permeability and embeddedness in the environment, an overemphasis on abstract values and lack of attention to organizational practices, an overemphasis on initial structural differences and lack of attention to the new cultural layer, a lack of recognition of the political dimensions and a failure to recognize cultural differences as sources of value and learning. In this article, the theoretical problems associated with these misconceptions are examined and new conceptual perspectives suggested. The risks at stake for decision makers are also discussed.

Essays on Stock Options, Incentives, and Managerial Action

Executive compensation and managerial behavior have received an increasing amount of attention in the financial economics literature since the mid 1970s. The purpose of this thesis is to extend our understanding of managerial compensation, especially how stock option compensation is linked to the actions undertaken by the management. Furthermore, managerial compensation is continuously and heatedly debated in the media and an emerging consensus from this discussion seems to be that there still exists gaps in our knowledge of optimal contracting. In Finland, the first executive stock options were introduced in the 1980s and throughout the last 15 years it has become increasingly popular for Finnish listed firms to use this type of managerial compensation. The empirical work in the thesis is conducted using data from Finland, in contrast to most previous studies that predominantly use U.S. data. Using Finnish data provides insight of how market conditions affect compensation and managerial action and provides an opportunity to explore what parts of the U.S. evidence can be generalized to other markets. The thesis consists of four essays. The first essay investigates the exercise policy of the executive stock option holders in Finland. In summary, Essay 1 contributes to our understanding of the exercise policies by examining both the determinants of the exercise decision and the markets reaction to the actual exercises. The second essay analyzes the factors driving stock option grants using data for Finnish publicly listed firms. Several agency theory based variables are found to have have explanatory power on the likelihood of a stock option grant. Essay 2 also contributes to our understanding of behavioral factors, such as prior stock return, as determinants of stock option compensation. The third essay investigates the tax and stock option motives for share repurchases and dividend distributions. We document strong support for the tax motive for share repurchases. Furthermore, we also analyze the dividend distribution decision in companies with stock options and find a significant difference between companies with and without dividend protected options. We thus document that the cutting of dividends found in previous U.S. studies can be avoided by dividend protection. In the fourth essay we approach the puzzle of negative skewness in stock returns from an altogether different angle than in previous studies. We suggest that negative skewness in stock returns is generated by management disclosure practices and find proof for this. More specifically, we find that negative skewness in daily returns is induced by returns for days when non-scheduled firm specific news is disclosed.

Factors Driving Stock Option Grants - Empirical Evidence from Finland

This study contributes to the executive stock option literature by looking at factors driving the introduction of such a compensation form on a firm level. Using a discrete decision model I test the explanatory power of several agency theory based variables and find strong support for predictability of the form of executive compensation. Ownership concentration and liquidity are found to have a significant negative effect on the probability of stock option adoption. Furtermore, I find evidence of CEO ownership, institutional ownership, investment intensity, and historical market return having a significant and a positive relationship to the likelihood of adopting a executive stock option program.

Appropriate Institutions and Economic Growth - one size fits no-one

Modern-day economics is increasingly biased towards believing that institutions matter for growth, an argument that has been further enforced by the recent economic crisis. There is also a wide consensus on what these growth-promoting institutions should look like, and countries are periodically ranked depending on how their institutional structure compares with the best-practice institutions, mostly in place in the developing world. In this paper, it is argued that ”non-desirable” or “second-best” institutions can be beneficial for fostering investment and thus providing a starting point for sustained growth, and that what matters is the appropriateness of institutions to the economy’s distance to the frontier or current phase of development. Anecdotal evidence from Japan and South-Korea is used as a motivation for studying the subject and a model is presented to describe this phenomenon. In the model, the rigidity or non-rigidity of the institutions is described by entrepreneurial selection. It is assumed that entrepreneurs are the ones taking part in the imitation and innovation of technologies, and that decisions on whether or not their projects are refinanced comes from capitalists. The capitalists in turn have no entrepreneurial skills and act merely as financers of projects. The model has two periods, and two kinds of entrepreneurs: those with high skills and those with low skills. The society’s choice of whether an imitation or innovation – based strategy is chosen is modeled as the trade-off between refinancing a low-skill entrepreneur or investing in the selection of the entrepreneurs resulting in a larger fraction of high-skill entrepreneurs with the ability to innovate but less total investment. Finally, a real-world example from India is presented as an initial attempt to test the theory. The data from the example is not included in this paper. It is noted that the model may be lacking explanatory power due to difficulties in testing the predictions, but that this should not be seen as a reason to disregard the theory – the solution might lie in developing better tools, not better just better theories. The conclusion presented is that institutions do matter. There is no one-size-fits-all-solution when it comes to institutional arrangements in different countries, and developing countries should be given space to develop their own institutional structures that cater to their specific needs.

Alikasvoksen mittaus ja kartoitus laserkeilauksella

Tasaikäisen metsän alle muodostuvilla alikasvoksilla on merkitystä puunkorjuun, metsänuudistamisen, näkemä-ja maisema-analyysien sekä biodiversiteetin ja hiilitaseen arvioinnin kannalta. Ilma-aluksista tehtävä laserkeilaus on osoittautunut tehokkaaksi kaukokartoitusmenetelmäksi varttuneiden puustojen mittauksessa. Laserkeilauksen käyttöönotto operatiivisessa metsäsuunnittelussa mahdollistaa aiempaa tarkemman tiedon tuottamisen alikasvoksista, mikäli alikasvoksen ominaisuuksia voidaan tulkita laseraineistoista. Tässä työssä käytettiin tarkasti mitattuja maastokoealoja ja kaikulaserkeilausaineistoja (discrete return LiDAR) usealta vuodelta (1–2 km lentokorkeus, 0,9–9,7 pulssia m-2). Laserkeilausaineistot oli hankittu Optech ALTM3100 ja Leica ALS50-II sensoreilla. Koealat edustavat suomalaisia tasaikäisiä männiköitä eri kehitysvaiheissa. Tutkimuskysymykset olivat: 1) Minkälainen on alikasvoksesta saatu lasersignaali yksittäisen pulssin tasolla ja mitkä tekijät signaaliin vaikuttavat? 2) Mikä on käytännön sovelluksissa hyödynnettävien aluepohjaisten laserpiirteiden selitysvoima alikasvospuuston ominaisuuksien ennustamisessa? Erityisesti haluttiin selvittää, miten laserpulssin energiahäviöt ylempiin latvuskerroksiin vaikuttavat saatuun signaaliin, ja voidaanko laserkaikujen intensiteetille tehdä energiahäviöiden korjaus. Puulajien väliset erot laserkaiun intensiteetissä olivat pieniä ja vaihtelivat keilauksesta toiseen. Intensiteetin käyttömahdollisuudet alikasvoksen puulajin tulkinnassa ovat siten hyvin rajoittuneet. Energiahäviöt ylempiin latvuskerroksiin aiheuttivat alikasvoksesta saatuun lasersignaaliin kohinaa. Energiahäviöiden korjaus tehtiin alikasvoksesta saaduille laserpulssin 2. ja 3. kaiuille. Korjauksen avulla pystyttiin pienentämään kohteen sisäistä intensiteetin hajontaa ja parantamaan kohteiden luokittelutarkkuutta alikasvoskerroksessa. Käytettäessä 2. kaikuja oikeinluokitusprosentti luokituksessa maan ja yleisimmän puulajin välillä oli ennen korjausta 49,2–54,9 % ja korjauksen jälkeen 57,3–62,0 %. Vastaavat kappa-arvot olivat 0,03–0,13 ja 0,10–0,22. Tärkein energiahäviöitä selittävä tekijä oli pulssista saatujen aikaisempien kaikujen intensiteetti, mutta hieman merkitystä oli myös pulssin leikkausgeometrialla ylemmän latvuskerroksen puiden kanssa. Myös 3. kaiuilla luokitustarkkuus parani. Puulajien välillä havaittiin eroja siinä, kuinka herkästi ne tuottavat kaiun laserpulssin osuessa puuhun. Kuusi tuotti kaiun suuremmalla todennäköisyydellä kuin lehtipuut. Erityisen selvä tämä ero oli pulsseilla, joissa oli energiahäviöitä. Laserkaikujen korkeusjakaumapiirteet voivat siten olla riippuvaisia puulajista. Sensorien välillä havaittiin selviä eroja intensiteettijakaumissa, mikä vaikeuttaa eri sensoreilla hankittujen aineistojen yhdistämistä. Myös kaiun todennäköisyydet erosivat jonkin verran sensorien välillä, mikä aiheutti pieniä eroavaisuuksia kaikujen korkeusjakaumiin. Aluepohjaisista laserpiirteistä löydettiin alikasvoksen runkolukua ja keskipituutta hyvin selittäviä piirteitä, kun rajoitettiin tarkastelu yli 1 m pituisiin puihin. Piirteiden selitysvoima oli parempi runkoluvulle kuin keskipituudelle. Selitysvoima ei merkittävästi alentunut pulssitiheyden pienentyessä, mikä on hyvä asia käytännön sovelluksia ajatellen. Lehtipuun osuutta ei pystytty selittämään. Tulosten perusteella kaikulaserkeilausta voi olla mahdollista hyödyntää esimerkiksi ennakkoraivaustarpeen arvioinnissa. Sen sijaan alikasvoksen tarkempi luokittelu (esim. puulajitulkinta) voi olla vaikeaa. Kaikkein pienimpiä alikasvospuita ei pystytä havaitsemaan. Lisää tutkimuksia tarvitaan tulosten yleistämiseksi erilaisiin metsiköihin.

Community, Power, and Colonialism: The U.S. Army in Southern Arizona and New Mexico, 1866-1886

Empire is central to U.S. history. When we see the U.S. projecting its influence on a global scale in today s world it is important to understand that U.S. empire has a long history. This dissertation offers a case study of colonialism and U.S. empire by discussing the social worlds, labor regimes, and culture of the U.S. Army during the conquest of southern Arizona and New Mexico (1866-1886). It highlights some of the defining principles, mentalities, and characteristics of U.S. imperialism and shows how U.S. forces have in years past constructed their power and represented themselves, their missions, and the places and peoples that faced U.S. imperialism/colonialism. Using insights from postcolonial studies and whiteness studies, this work balances its attention between discursive representations (army stories) and social experience (army actions), pays attention to silences in the process of historical production, and focuses on collective group mentalities and identities. In the end the army experience reveals an empire in denial constructed on the rule of difference and marked by frustration. White officers, their wives, and the white enlisted men not only wanted the monopoly of violence for the U.S. regime but also colonial (mental/cultural) authority and power, and constructed their identity, authority, and power in discourse and in the social contexts of the everyday through difference. Engaged in warfare against the Apaches, they did not recognize their actions as harmful or acknowledge the U.S. invasion as the bloody colonial conquest it was. White army personnel painted themselves and the army as liberators, represented colonial peoples as racial inferiors, approached colonial terrain in terms of struggle, and claimed that the region was a terrible periphery with little value before the arrival of white civilization. Officers and wives also wanted to place themselves at the top of colonial hierarchies as the refined and respectable class who led the regeneration of the colony by example: they tried to turn army villages into islands of civilization and made journeys, leisure, and domestic life to showcase their class sensibilities and level of sophistication. Often, however, their efforts failed, resulting in frustration and bitterness. Many blamed the colony and its peoples for their failures. The army itself was divided by race and class. All soldiers were treated as laborers unfit for self-government. White enlisted men, frustrated by their failures in colonial warfare and by constant manual labor, constructed worlds of resistance, whereas indigenous soldiers sought to negotiate the effects of colonialism by working in the army. As colonized labor their position was defined by tension between integration and exclusion and between freedom and colonial control.

Sairaanhoitajaksi kasvattaminen : Sairaanhoitajakoulutus ja siinä käytetyt oppikirjat Suomessa vuoteen 1967 asti

The historical development of Finnish nursing textbooks from the late 1880s to 1967: the training of nurses in the Foucauldian perspective. This study aims, first, to analyse the historical development of Finnish nursing textbooks in the training of nurses and in nursing education: what Foucauldian power processes operate in the writing and publishing processes? What picture of nursing did early nursing books portray and who were the decision makers? Second, this study also aims to analyse the processes of power in nurse training processes. The time frame extends from the early stages of nurse training in the late 1880s to 1967. This present study is a part of textbook research and of the history of professional education in Finland. This study seeks to explain how, who or what contributed the power processes involved in the writing of nursing textbooks and through textbooks. Did someone use these books as a tool to influence nursing education? The third aim of this study is to define and analyse the purpose of nurse training. Michel Foucault´s concept of power served as an explanatory framework for this study. A very central part of power is the assembling of data, the supplying of information and messages, and the creation of discourses. When applied to the training of nurses, power dictates what information is taught in the training and contained in the books. Thus, the textbook holds an influential position as a power user in these processes. Other processes in which such power is exercised include school discipline and all other normalizing processes. One of most powerful ways of adapting is the hall of residence, where nursing pupils were required to live. Trained nurses desired to separate themselves from their untrained predecessors and from those with less training by wearing different uniforms and living in separate housing units. The state supported the registration of trained nurses by legislation. With this decision the state made it illegal to work as a nurse without an authorised education, and use these regulations to limit and confirm the professional knowledge and power of nurses. Nurses, physicians and government authorities used textbooks in nursing education as tools to achieve their own purposes and principles. With these books all three groups attempted to confirm their own professional power and knowledge while at the same time limit the power and expertise of others. Public authorities sought to unify the training of nurses and the basis of knowledge in all nursing schools in Finland with similar and obligatory textbooks. This standardisation started 20 years before the government unified nursing training in 1930. The textbooks also served as data assemblers in unifying nursing practices in Finnish hospitals, because the Medical Board required all training hospitals to attach the textbooks to units with nursing pupils. For the nurses, and especially for the associations of Finnish nurses, making and publishing their own textbooks for the training of nurses was a part of their professional projects. With these textbooks, the nursing elite and the teachers tended to prepare nursing pupils’ identities for nursing’s very special mission. From the 1960s, nursing was no longer understood as a mission, but as a normal vocation. Nurses and doctors disputed this view throughout the period studied, which was the optimal relationship between theory and practice in nursing textbooks and in nurse education. The discussion of medical knowledge in nursing textbooks took place in the 1930s and 1940s. Nurses were very confused about their own professional knowledge and expertise, which explains why they could not create a new nursing textbook despite the urgency. A brand new nursing textbook was published in 1967, about 30 years after the predecessor. Keyword: nurse, nurse training, nursing education, power, textbook, Michel Foucault

Assessing organizational culture in complex sociotechnical systems : Methodological evidence from studies in nuclear power plant maintenance organizations

Failures in industrial organizations dealing with hazardous technologies can have widespread consequences for the safety of the workers and the general population. Psychology can have a major role in contributing to the safe and reliable operation of these technologies. Most current models of safety management in complex sociotechnical systems such as nuclear power plant maintenance are either non-contextual or based on an overly-rational image of an organization. Thus, they fail to grasp either the actual requirements of the work or the socially-constructed nature of the work in question. The general aim of the present study is to develop and test a methodology for contextual assessment of organizational culture in complex sociotechnical systems. This is done by demonstrating the findings that the application of the emerging methodology produces in the domain of maintenance of a nuclear power plant (NPP). The concepts of organizational culture and organizational core task (OCT) are operationalized and tested in the case studies. We argue that when the complexity of the work, technology and social environment is increased, the significance of the most implicit features of organizational culture as a means of coordinating the work and achieving safety and effectiveness of the activities also increases. For this reason a cultural perspective could provide additional insight into the problem of safety management. The present study aims to determine; (1) the elements of the organizational culture in complex sociotechnical systems; (2) the demands the maintenance task sets for the organizational culture; (3) how the current organizational culture at the case organizations supports the perception and fulfilment of the demands of the maintenance work; (4) the similarities and differences between the maintenance cultures at the case organizations, and (5) the necessary assessment of the organizational culture in complex sociotechnical systems. Three in-depth case studies were carried out at the maintenance units of three Nordic NPPs. The case studies employed an iterative and multimethod research strategy. The following methods were used: interviews, CULTURE-survey, seminars, document analysis and group work. Both cultural analysis and task modelling were carried out. The results indicate that organizational culture in complex sociotechnical systems can be characterised according to three qualitatively different elements: structure, internal integration and conceptions. All three of these elements of culture as well as their interrelations have to be considered in organizational assessments or important aspects of the organizational dynamics will be overlooked. On the basis of OCT modelling, the maintenance core task was defined as balancing between three critical demands: anticipating the condition of the plant and conducting preventive maintenance accordingly, reacting to unexpected technical faults and monitoring and reflecting on the effects of maintenance actions and the condition of the plant. The results indicate that safety was highly valued at all three plants, and in that sense they all had strong safety cultures. In other respects the cultural features were quite different, and thus the culturally-accepted means of maintaining high safety also differed. The handicraft nature of maintenance work was emphasised as a source of identity at the NPPs. Overall, the importance of safety was taken for granted, but the cultural norms concerning the appropriate means to guarantee it were little reflected. A sense of control, personal responsibility and organizational changes emerged as challenging issues at all the plants. The study shows that in complex sociotechnical systems it is both necessary and possible to analyse the safety and effectiveness of the organizational culture. Safety in complex sociotechnical systems cannot be understood or managed without understanding the demands of the organizational core task and managing the dynamics between the three elements of the organizational culture.

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.