By the end of 2006, there were about 24 million total passenger cars on the roads in China, nearly three times as many as in 2001. To slow the increase in energy consumption by these cars, China began implementing passenger car fuel economy standards in two phases beginning in 2005. Phase 1 fuel...

We propose an optimization formulation using the l <Subscript>1</Subscript> norm to ensure accuracy and stability in calibrating a local volatility function for option pricing. Using a regularization parameter, the proposed objective function balances calibration accuracy with model complexity. Motivated by the...</subscript>

We consider nonlinear waves driven by curvature in the presence of periodically distributed obstacles. When the obstacles are small, Matano et al. (2006) proved rigorously that the propagation speed of a wave mainly depends on the opening angle of the obstacles. In this paper we first explain...

This paper studies the issue of renegotiation in a model of dynamic moral hazard. I introduce the notion of a renegotiation-proof dynamic contract. I show that the constraint of renegotiation-proofness can have the effect of setting a higher lower bound to the set of attainable expected...

Existing models of dynamic contracts impose that it is both optimal and feasible for the contracting parties to bind themselves together forever. This paper introduces optimal terminatin in dynamic contracts. We modify the standard dynamic agency model to include an external labor market which,...