Game-theoretic view on intermediated exchange

Intermediaries permeate modern economic exchange. Most classical models on intermediated exchange are driven by information asymmetry and inventory management. These two factors are of reduced significance in modern economies. This makes it necessary to develop models that correspond more closely to modern financial marketplaces. The goal of this dissertation is to propose and examine such models in a game theoretical context. The proposed models are driven by asymmetries in the goals of different market participants. Hedging pressure as one of the most critical aspects in the behavior of commercial entities plays a crucial role. The first market model shows that no equilibrium solution can exist in a market consisting of a commercial buyer, a commercial seller and a non-commercial intermediary. This indicates a clear economic need for non-commercial trading intermediaries: a direct trade from seller to buyer does not result in an equilibrium solution. The second market model has two distinct intermediaries between buyer and seller: a spread trader/market maker and a risk-neutral intermediary. In this model a unique, natural equilibrium solution is identified in which the supply-demand surplus is traded by the risk-neutral intermediary, whilst the market maker trades the remainder from seller to buyer. Since the market maker’s payoff for trading at the identified equilibrium price is zero, this second model does not provide any motivation for the market maker to enter the market. The third market model introduces an explicit transaction fee that enables the market maker to secure a positive payoff. Under certain assumptions on this transaction fee the equilibrium solution of the previous model applies and now also provides a financial motivation for the market maker to enter the market. If the transaction fee violates an upper bound that depends on supply, demand and riskaversity of buyer and seller, the market will be in disequilibrium.

Ultraviolet digital imaging of volcanic plumes : implementation and application to magmatic processes at basaltic volcanoes

Magmatic volatiles play a crucial role in volcanism, from magma production at depth to generation of seismic phenomena to control of eruption style. Accordingly, many models of volcano dynamics rely heavily on behavior of such volatiles. Yet measurements of emission rates of volcanic gases have historically been limited, which has restricted model verification to processes on the order of days or longer. UV cameras are a recent advancement in the field of remote sensing of volcanic SO2 emissions. They offer enhanced temporal and spatial resolution over previous measurement techniques, but need development before they can be widely adopted and achieve the promise of integration with other geophysical datasets. Large datasets require a means by which to quickly and efficiently use imagery to calculate emission rates. We present a suite of programs designed to semi-automatically determine emission rates of SO2 from series of UV images. Extraction of high temporal resolution SO2 emission rates via this software facilitates comparison of gas data to geophysical data for the purposes of evaluating models of volcanic activity and has already proven useful at several volcanoes. Integrated UV camera and seismic measurements recorded in January 2009 at Fuego volcano, Guatemala, provide new insight into the system’s shallow conduit processes. High temporal resolution SO2 data reveal patterns of SO2 emission rate relative to explosions and seismic tremor that indicate tremor and degassing share a common source process. Progressive decreases in emission rate appear to represent inhibition of gas loss from magma as a result of rheological stiffening in the upper conduit. Measurements of emission rate from two closely-spaced vents, made possible by the high spatial resolution of the camera, help constrain this model. UV camera measurements at Kilauea volcano, Hawaii, in May of 2010 captured two occurrences of lava filling and draining within the summit vent. Accompanying high lava stands were diminished SO2 emission rates, decreased seismic and infrasonic tremor, minor deflation, and slowed lava lake surface velocity. Incorporation of UV camera data into the multi-parameter dataset gives credence to the likelihood of shallow gas accumulation as the cause of such events.

Nitrogen Oxides in the North Atlantic Troposphere: Impacts of Boreal Wildfire and Anthropogenic Emissions

Nitrogen oxides play a crucial role in the budget of tropospheric ozone (O sub(3)) and the formation of the hydroxyl radical. Anthropogenic activities and boreal wildfires are large sources of emissions in the atmosphere. However, the influence of the transport of these emissions on nitrogen oxides and O sub(3) levels at hemispheric scales is not well understood, in particular due to a lack of nitrogen oxides measurements in remote regions. In order to address these deficiencies, measurements of NO, NO sub(2) and NO sub(y) (total reactive nitrogen oxides) were made in the lower free troposphere (FT) over the central North Atlantic region (Pico Mountain station, 38 degree N 28 degree W, 2.3 km asl) from July 2002 to August 2005. These measurements reveal a well-defined seasonal cycle of nitrogen oxides (NO sub(x) = NO+NO sub(2) and NO sub(y)) in the background central North Atlantic lower FT, with higher mixing ratios during the summertime. Observed NO sub(x) and NO sub(y) levels are consistent with long-range transport of emissions, but with significant removal en-route to the measurement site. Reactive nitrogen largely exists in the form of PAN and HNO sub(3) ( similar to 80-90% of NO sub(y)) all year round. A shift in the composition of NO sub(y) from dominance of PAN to dominance of HNO sub(3) occurs from winter-spring to summer-fall, as a result of changes in temperature and photochemistry over the region. Analysis of the long-range transport of boreal wildfire emissions on nitrogen oxides provides evidence of the very large-scale impacts of boreal wildfires on the tropospheric NO sub(x) and O sub(3) budgets. Boreal wildfire emissions are responsible for significant shifts in the nitrogen oxides distributions toward higher levels during the summer, with medians of NO sub(y) (117-175 pptv) and NO sub(x) (9-30 pptv) greater in the presence of boreal wildfire emissions. Extreme levels of NO sub(x) (up to 150 pptv) and NO sub(y) (up to 1100 pptv) observed in boreal wildfire plumes suggest that decomposition of PAN to NO sub(x) is a significant source of NO sub(x), and imply that O sub(3) formation occurs during transport. Ozone levels are also significantly enhanced in boreal wildfire plumes. However, a complex behavior of O sub(3) is observed in the plumes, which varies from significant to lower O sub(3) production to O sub(3) destruction. Long-range transport of anthropogenic emissions from North America also has a significant influence on the regional NO sub(x) and O sub(3) budgets. Transport of pollution from North America causes significant enhancements on nitrogen oxides year-round. Enhancements of CO, NO sub(y) and NO sub(x) indicate that, consistent with previous studies, more than 95% of the NO sub(x) emitted over the U.S. is removed before and during export out of the U.S. boundary layer. However, about 30% of the NO sub(x) emissions exported out of the U.S. boundary layer remain in the airmasses. Since the lifetime of NO sub(x) is shorter than the transport timescale, PAN decomposition and potentially photolysis of HNO sub(3) provide a supply of NO sub(x) over the central North Atlantic lower FT. Observed Delta O sub(3)/ Delta NO sub(y) and large NO sub(y) levels remaining in the North American plumes suggest potential O sub(3) formation well downwind from North America. Finally, a comparison of the nitrogen oxides measurements with results from the global chemical transport (GCT) model GEOS-Chem identifies differences between the observations and the model. GEOS-Chem reproduces the seasonal variation of nitrogen oxides over the central North Atlantic lower FT, but does not capture the magnitude of the cycles. Improvements in our understanding of nitrogen oxides chemistry in the remote FT and emission sources are necessary for the current GCT models to adequately estimate the impacts of emissions on tropospheric NO sub(x) and the resulting impacts on the O sub(3) budget.