Sigbjørn Reidar Sødal

• Saeed, Naima; Cullinane, Kevin & Sødal, Sigbjørn Reidar (2020). Exploring the relationships between maritime connectivity, international trade and domestic production. Maritime Policy & Management. ISSN 0308-8839. doi: 10.1080/03088839.2020.1802783. Full text in Research Archive
• Hoffmann, Jan; Saeed, Naima & Sødal, Sigbjørn (2019). Liner shipping bilateral connectivity and its impact on South Africa’s bilateral trade flows. Maritime Economics & Logistics. ISSN 1479-2931. 22, p. 473–499. doi: 10.1057/s41278-019-00124-8. Show summary

  Since shipping connectivity reduces trade costs, which in turn improves trade, this paper aims to analyse the short- and long-run impacts of the liner shipping bilateral connectivity on South Africa’s trade flows. In addition to connectivity, measured by five separate components, we also consider the effects on trade of sailing distances, the direct (air) distance and the gross domestic product (GDP) of 142 trading partners. We apply the quasi-maximum likelihood method to estimate the parameters of a dynamic panel data model. The results show that GDP, the number of common direct connections and the level of competition have a positive and significant effect on trade flows, while the number of transshipments and the direct and sailing distances have a negative and significant impact, both in the short and long run. The estimated long-run effects are stronger than the short-run effects, suggesting that shippers take time to adjust their demand to changes in connectivity. The variable maximum ship size does not seem to have a positive bearing on trade, suggesting that countries may not need to try to accommodate ever larger ships to maintain their foreign trade competitiveness.

• Sødal, Sigbjørn (2018). Partilandskapet i Norge. Samfunnsøkonomen. ISSN 1890-5250. p. 51–65.
• Sødal, Sigbjørn (2017). A gravity approach to constructing regional structures from interregional flow data. International Advances in Economic Research. ISSN 1083-0898. 23(4), p. 361–377. doi: 10.1007/s11294-017-9663-7.
• Sødal, Sigbjørn (2017). Hvilke kommuner og fylker passer sammen i større enheter? Fagbladet samfunn og økonomi. ISSN 1893-3009. p. 48–65.
• Sødal, Sigbjørn (2010). Skipsfartskriser og andre kriser. In Knudsen, Jon Paschen & Sødal, Sigbjørn Reidar (Ed.), Økonomi og tid : 18 essays i Pufendorf-tradisjon : festskrift til professor Arild Sæther på 70-årsdagen, 8. august 2010. Fagbokforlaget. ISSN 978-82-450-1024-4. p. 163–177. Show summary

  Markedene i skipsfarten har alltid vært sterkt påvirket av internasjonale kriser, ikke minst kriser med utspring i sikkerhetspolitiske forhold. På kort sikt kan kriser skape usikkerhet og ekstrem inntjening eller ekstremt tap, med tilhørende muligheter for de risikovillige. På lang sikt legges grunnlaget for investeringer i nye skip i perioder med unormalt høy inntjening. Lønnsomheten i bransjen er vanligvis for lav til at slike investeringer ellers kunne forsvares. Kriser blir på denne måten en økonomisk livsnerve for skipsfarten over tid. Hvorfor er det slik, og kan en regne med at det vil fortsette? Bidraget fra denne artikkelen ligger i en ny sammenstilling av forskning fra forskjellige fagtradisjoner -?sikkerhetspolitikk, internasjonal økonomi og skipsfartsøkonomi - i den hensikt å forstå den langsiktige utviklingen i en global bransje.

• Shackleton, Mark & Sødal, Sigbjørn (2010). Harvesting and recovery decisions under uncertainty. Journal of Economic Dynamics and Control. ISSN 0165-1889. 34(12), p. 2533–2546. doi: 10.1016/j.jedc.2010.07.003. Show summary

  A stochastic forest rotation model in the Faustmann tradition is presented and exemplified. The model combines harvesting decisions with the potential to recover or clean up to restore the land after very unfavorable evolutions of the stochastic growth process. Uncertainty is shown to have a generally ambiguous effect on the optimal choice of investment strategy. It is also shown how such models can be related to theory of optimal inventory control. (C) 2010 Elsevier B.V. All rights reserved.

• Sødal, Sigbjørn; Koekebakker, Steen & Adland, Roar (2009). Value based trading of real assets in shipping under stochastic freight rates. Applied Economics. ISSN 0003-6846. 41(22), p. 2793–2807. doi: 10.1080/00036840701720853. Show summary

  The article uses a real options valuation model with stochastic freight rates to investigate market efficiency and the economics of switching between the dry bulk and the tanker markets in international shipping. A dry bulk carrier is replaced with a tanker when the expected net present value of such a switch is optimal from a real options based decision rule. Depending on the development of the markets a reversal may take place later. The cost and demand parameters upon which the decisions to switch are made, including the stochastic characteristics of freight rates, are estimated from an empirical analysis that is updated every week throughout a 12-year time period from 1993 to 2005. The second-hand market for bulk ships seems to have been efficient most of these years in the sense that market switching usually did not pay off, with one major exception: it seemed profitable in expectation to leave the dry bulk market and enter the tanker market over a significant period of time shortly after the millennium shift, and to return to the dry bulk market about three years later. These points in time corresponded with an unprecedented boom period in the tanker and dry bulk freight markets, respectively, and the result suggest that agents in the second-hand market were slow to adjust their expectations. In retrospect, such an investment policy also happened to be profitable compared to staying put in the tanker market, even after accounting for transaction costs.

• Sødal, Sigbjørn; Koekebakker, Steen & Ådland, Roar (2008). Market switching in shipping A real option model applied to the valuation of combination carriers. Review of Financial Economics. ISSN 1058-3300. 17(3), p. 183–203. Show summary

  This paper derives a real options model of flexibility and applies it to shipping, valuing the option to switch between the dry bulk market and wet bulk market for a combination carrier, a ship type that is capable of operating in both markets but that has fallen out of favor due to high price tags. The model is a mean-reverting (Ornstein¿Uhlenbeck) version of a standard entry¿exit model with stochastic prices. A closed form solution for the value of flexibility is derived, expressed in terms of Kummer functions. The estimated value of flexibility is related to historical price differentials between combination carriers and oil tankers of comparable size. Based on numerical experiments it is concluded that new combination carriers may enter the market in the near future.

• Koekebakker, Steen; Ådland, Roar & Sødal, Sigbjørn (2007). Pricing freight rate options. Transportation Research Part E: Logistics and Transportation Review. ISSN 1366-5545. 43, p. 535–548. Show summary

  In this paper we set up the theoretical framework for the valuation of the Asian-style options traded in the freight derivatives market. Assuming lognormal spot freight dynamics, we show that Forward Freight Agreements (FFA) are also lognormal prior to the settlement period, but that this lognormality subsequently breaks down. We suggest approximate dynamics in the settlement period for the FFA that leads to closed-form option pricing formulas for Asian call and put options written on the spot freight rate indices in the Black [Black, F., 1976. The pricing of commodity contracts. Journal of Financial Economics 3, 167-179.] framework. In a Monte Carlo experiment we show that our formula gives very accurate prices, in particular for forward -starting freight options. (C) 2006 Elsevier Ltd. All rights reserved.

• Sødal, Sigbjørn (2006). Entry and exit decisions based on a discount factor approach. Journal of Economic Dynamics and Control. ISSN 0165-1889. 30, p. 1963–1986. Show summary

  Entry and exit decisions under price uncertainty are discussed by a discount factor approach to investment. The approach makes it possible to express the value of the ?rm as a function of a set of trigger prices at which investment takes place, and to determine the optimal policy by simple maximization. Starting with a standard entry?exit model by Dixit [1989. Entry and exit decisions under uncertainty. Journal of political economy 97(3), 620?638], the paper expands to construction and scrapping decisions, investment lags, diminishing production capacity, and limits to the number of lay-up periods. Economic implications are investigated using experimental data and empirical shipping data.

• Koekebakker, Steen; Ådland, Roar & Sødal, Sigbjørn (2006). Are spot freight rates stationary? Journal of Transport Economics and Policy. ISSN 0022-5258. 40(3).
• Sødal, Sigbjørn (2005). Realopsjoner i teori og praksis. Økonomisk forum. ISSN 1502-6108. 9(Årg. 59, nr 9), p. 51–60.
• Shackleton, Mark & Sødal, Sigbjørn (2004). Smooth pasting as rate of return equalization. Economics Letters. ISSN 0165-1765. 89(2), p. 200–206.
• Sødal, Sigbjørn (2003). Realopsjoner. Praktisk økonomi & finans. ISSN 1501-0074. 4.
• Sødal, Sigbjørn (2002). The Stochastic Rotation Formula: A Comment. Journal of Economic Dynamics and Control. ISSN 0165-1889. 26(3), p. 509–515. Show summary

  The stochastic Faustmann problem is solved by a simplified approach as compared with the rigorous analysis provided by Willassen (1998). The result is a closed-form rotation formula that simplifies to Faustmann’s formula in the deterministic setting. The formula is discussed for two sets of assumptions: one where the rotation cost is exogenous and fixed, and one where it is endogenous, and to be chosen optimally.

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• Knudsen, Jon Paschen & Sødal, Sigbjørn Reidar (2010). Økonomi og tid : 18 essays i Pufendorf-tradisjon : festskrift til professor Arild Sæther på 70-årsdagen, 8. august 2010. Fagbokforlaget. ISBN 978-82-450-1024-4. 314 p.
• Knudsen, Jon P & Sødal, Sigbjørn (2010). Økonomi og tid 18 essays i Pufendorf-tradisjon. Fagbokforlaget. 314 p.
• Wijnolst, Niko; Jenssen, Jan Inge & Sødal, Sigbjørn (2003). European Maritime Clusters. Delft University Press. ISBN 9040724571. 220 p.

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• Sødal, Sigbjørn (2019). Er Gartnerløkka og Ytre Ringvei uavhengige prosjekter? Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2019). Målkonflikter i samferdselspolitikken.
• Sødal, Sigbjørn (2018). Langsiktig økonomisk vekst og bærekraft. Nobels minnepris i økonomi for 2018.
• Sødal, Sigbjørn (2018). Sverigedemokraterna fyller ett politiskt tomrum. Dagens Samhälle.
• Saeed, Naima; Sødal, Sigbjørn & Hoffmann, Jan (2018). Liner shipping connectivity and its impact on bilateral trade flow of South Africa: A Quasi-Maximum Likelihood (QML) estimation of panel data with random effects. Show summary

  This paper analyses the impact of the liner shipping bilateral connectivity on bilateral trade flow of South Africa with the rest of the world. The bilateral connectivity is measured by way of five components that are the number of transshipments, the number of common direct connections, the geometric mean of the number of direct connections, the level of competition on services, and the size of the largest ships on the weakest route between South Africa and its trading partner. In addition to these five variables, the data for real income of South Africa and the real income of its 148 trading partners was collected from 2006-2016. This study applies the Quasi-Maximum Likelihood (QML) method to estimate the dynamic panel data with random effect. The results show that the real income of South Africa, the real income of its trading partners, the number of common direct connections, and the level of competition on services have a positive, while the number of transshipments has a negative and significant effect on bilateral trade flow of South Africa.

• Sødal, Sigbjørn (2018). Det norske politiske landskapet - slik velgerne selv har tegnet det gjennom 40 år.
• Sødal, Sigbjørn (2017). KrF-ledelsen i utakt med velgerne. Dagbladet. ISSN 0805-3766. p. 32–33.
• Sødal, Sigbjørn (2016). Urimelig krass, Norman? Dagens næringsliv. ISSN 0803-9372.
• Sødal, Sigbjørn (2016). Nobels minnepris i økonomi for 2016.
• Sødal, Sigbjørn (2015). Vektig bok om et viktig land. Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2015). Hvem passer sammen på Agder?
• Sødal, Sigbjørn (2015). Sørlandet står godt på egne bein.
• Sødal, Sigbjørn (2014). Quo vadis, Sørlandet? Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2014). Organisering av UH-sektoren i Norge. In Jahr, Ernst Håkon; Nossum, Rolf Tomas & Storesletten, Leiv (Ed.), Agder Vitenskapsakademi Årbok 2013. Portal forlag. ISSN 9788283140200. p. 68–73.
• Sødal, Sigbjørn (2014). Disse passer best sammen. [Newspaper]. Agderposten.
• Sødal, Sigbjørn (2014). Sju kjærlighetskommuner på Agder. [Newspaper]. Fædrelandsvennen.
• Sødal, Sigbjørn (2014). Hvem passer sammen? En studie av hvordan norske kommuner og regioner er knyttet sammen av flyttemønstre i befolkningen.
• Sødal, Sigbjørn (2014). Flyttemønstre og andre strømninger på Agder.
• Sødal, Sigbjørn (2013). UiAs samfunnsrolle.
• Sødal, Sigbjørn (2013). Organisering av UH-sektoren.
• Jahr, Ernst Håkon; Simonsen, Birte; Seiler, Stephen & Sødal, Sigbjørn (2012). Det gjelder UiAs identitet. Fædrelandsvennen. ISSN 0805-3790. p. 5–5.
• Jahr, Ernst Håkon; Simonsen, Birte; Skisland, Jan Oddvar; Seiler, Stephen & Sødal, Sigbjørn (2012). Vi drømmer om et kvalitetsuniversitet. Fædrelandsvennen. ISSN 0805-3790. p. 4–4.
• Jahr, Ernst Håkon; Sødal, Sigbjørn; Simonsen, Birte; Skisland, Jan Oddvar & Seiler, Stephen (2012). Vi ønsker et kvalitetsuniversitet. Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2012). Økonomiske perspektiver på internasjonale operasjoner.
• Sødal, Sigbjørn (2012). Veier i Norge eller verdipapirer i utlandet?
• Sødal, Sigbjørn Reidar (2011). Bytunnelen – en samlende hovedvei for Kristiansand? Fædrelandsvennen. ISSN 0805-3790.
• Horrigmo, Aase Marthe J. & Sødal, Sigbjørn Reidar (2011). Fleksibilitet og effektivitet. Stat og styring. ISSN 0803-0103. p. 34–35.
• Sødal, Sigbjørn Reidar (2011). KRISTIANSAND I UTVIKLING - noen samfunnsøkonomiske perspektiver med utgangspunkt i en ny kommuneplan.
• Sødal, Sigbjørn (2009). Byutvikling etter innfallsmetoden. Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2009). Finanskrisen i makroperspektiv.
• Sødal, Sigbjørn (2009). Finanskrisen.
• Sødal, Sigbjørn (2008). Real options with applications to shipping.
• Sødal, Sigbjørn (2008). Alternativkostnader.
• Sødal, Sigbjørn (2008). Hva tåler norsk økonomi av investering i infrastruktur?
• Sødal, Sigbjørn (2008). Paul Krugman - Nobelprisvinner i økonomi 2008.
• Sødal, Sigbjørn (2008). Kommunikasjon som driver i samfunnsutviklingen.
• Sødal, Sigbjørn & Koekebakker, Steen (2007). Real options with non-linear dynamics. Show summary

  The value of a real or financial option depends among other factors on the assumption of the underlying stochastic process. Linear and loglinear processes are most common, such as the arithmetic Brownian motion, the geometric Brownian motion and the Ornstein-Uhlenbeck process. In the time series literature, non-linear continuous time models have been developed. One such class of models is the threshold-autoregressive model, where the dynamic process changes character depending on whether the process is above or below a certain threshold. In this paper we investigate real option modelling when uncertainty can be described by a continuous time threshold autoregression. Closed form solutions to perpetual American options on such processes are derived. Various applications are studied, focusing on how uncertainty and non-linearity can a?ect option valuation and investment. This includes examples where uncertainty encourages investment, contrary to the result with most real options models.

• Sødal, Sigbjørn; Koekebakker, Steen & Ådland, Roar (2006). Value based trading of real assets in shipping under stochastic freight rates. Show summary

  The paper uses a real options valuation model with stochastic freight rates to investigate market efficiency and the economics of switching between the dry bulk and the tanker markets in international shipping. A dry bulk carrier is replaced with a tanker when the expected net present value of such a switch is optimal from a real options based decision rule. Depending on the development of the markets a reversal may take place later. The cost and demand parameters upon which the decisions to switch are made, including the stochastic characteristics of freight rates, are estimated from an empirical analysis that is updated every week throughout a 12-year time period from 1993 to 2005. The second-hand market for bulk ships seems to have been efficient most of these years in the sense that market switching usually did not pay off, with one major exception: it seemed profitable in expectation to leave the dry bulk market and enter the tanker market over a significant period of time shortly after the millennium shift, and to return to dry bulk market about three years later. These points in time corresponded with an unprecedented boom period in the tanker and drybulk freight markets, respectively, and the result suggest that agents in the second-hand market were slow to adjust their expectations. In retrospect, such an investment policy also happened to be profitable compared to staying put in the tanker market, even after accounting for transaction costs.

• Shackleton, Mark & Sødal, Sigbjørn (2006). Stochastic forest growth with harvesting and recovery decisions. Show summary

  A stochastic forest rotation model in the Faustmann tradition is presented and exemplified. The model combines harvesting decisions with options to recover or clean up to restore the land after very unfavorable evolutions of the stochastic growth process. Uncertainty is shown to have a generally ambiguous e?ect on the optimal choice of investment strategy. It is also shown how such models can be related to theory of optimal inventory control.

• Koekebakker, Steen; Ådland, Roar & Sødal, Sigbjørn (2005). Modelling freight rate derivatives.
• Sødal, Sigbjørn (2004). Veivalget på Gartnerløkka. Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2004). Tunnel er beste løsningen. Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn; Randøy, Trond & Koekebakker, Steen (2004). Vent med flere høybroer. Fædrelandsvennen. ISSN 0805-3790.
• Ådland, Roar; Koekebakker, Steen & Sødal, Sigbjørn (2004). Vessel valuation in bulk shipping: A multivariate density approach.
• Koekebakker, Steen; Sødal, Sigbjørn & Ådland, Roar (2004). The non-stationarity of freight rates revisited.
• Sødal, Sigbjørn (2004). Referee-oppdrag.
• Sødal, Sigbjørn (2004). Referee-oppdrag.
• Sødal, Sigbjørn (2004). Market switching options for shipping carriers.
• Sødal, Sigbjørn & Shackleton, Mark (2004). Smooth pasting as rate of return equalisation.
• Sødal, Sigbjørn (2004). Trading rules with analytical ship valuation under stochastic freight rates.
• Sødal, Sigbjørn (2004). The value of market switching options for combinations carriers.
• Sødal, Sigbjørn (2003). Referee-oppdrag.
• Sødal, Sigbjørn (2003). Udugelige økonomer? Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2003). Udugelige næringspolitikere? Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2003). Brenselceller på skip. ?. 3.
• Sødal, Sigbjørn (2003). Fuel cells in shipping.
• Sødal, Sigbjørn (2003). Fuel cell power production in shipping.
• Sødal, Sigbjørn (2002). Referee-oppdrag.
• Sødal, Sigbjørn (2002). Referee-oppdrag.
• Sødal, Sigbjørn (2002). Real options in shipping.
• Sødal, Sigbjørn (2002). Gjelder forvaltningsansvaret også offentlig sektor? Vårt land. ISSN 0805-5424.
• Sødal, Sigbjørn; Friestad, Liv Bente Hannevik & Robertsen, Karl (2002). Fusjon På Gimle - hvor er argumentene? Fædrelandsvennen. ISSN 0805-3790.
• Sødal, Sigbjørn (2002). Internasjonal sikkerhetspolitikk og internasjonal skipsfart.
• Sødal, Sigbjørn (2002). Kapitalkostnader i grunnskolen.
• Sødal, Sigbjørn (2002). Timing and Scaling Options for Market Power with Application to Real Estate: When and How Much to Invest?
• Sødal, Sigbjørn & Koekebakker, Steen (2002). Valuling an operating electricity production unit.
• Sødal, Sigbjørn (2002). Monopoly with timing and scaling options. Show summary

  We develop a model of the investment behavior of a firm that faces a stochastic, downward-sloping demand curve. The firm’s challenge is to determine the optimal scale and time of an investment, so there is a potential for market power in the sense of markup pricing along two dimensions: static market power along a quantity dimension, and dynamic market power along a time dimension. Depending on the specific assumptions, either dimension will be more or less relevant. For example, the option to wait may be useless if the uncertainty of demand is low and the demand curve is not very elastic. Then the decision of the firm simplifies to that of a standard monopoly model. In other cases, the option to wait prevails. Typically, the latter happens when there is much uncertainty and the demand curve is fairly elastic. The formal model is illustrated by decisions in the real estate industry.

• Sødal, Sigbjørn (2001). Referee-oppdrag.
• Sødal, Sigbjørn (2001). Referee-oppdrag.
• Sødal, Sigbjørn (2001). Real Options and Monopolistic Competition.
• Sødal, Sigbjørn (2001). Entry, Exit and Scrapping Decisions with Investment Lags.
• Sødal, Sigbjørn (2001). A Simplified Exposition of Smooth Pasting.
• Sødal, Sigbjørn (2001). Et usikkert kraftmarked. Fædrelandsvennen. ISSN 0805-3790. Show summary

  En drøfting av sentrale trekk ved det norske markedet for elektrisk kraft

• Sødal, Sigbjørn (2003). Fuel cells in shipping: higher capital costs and reduced flexibility.
• Sødal, Sigbjørn (2002). Sammenhenger mellom sikkerhetspolitikk og skipsfart. Show summary

  Rapporten beskriver noen generelle økonomiske sammenhenger mellom sikkerhetspolitikk og skipsfart i lys av historiske erfaringer og empiriske studier. Med henvisning til andre arbeider innenfor prosjektet konkluderes det med at internasjonal skipsfart fortsatt vil være sterkt utsatt for sikkerhetspolitisk usikkerhet, men neppe mer  snarere mindre  enn tidligere.

• Sødal, Sigbjørn (2002). Konsekvenser for skipsfarten av en militær konflikt i Midtøsten. Show summary

  Rapporten analyserer konsekvensene av en konflikt rundt Den persiske golf med vekt på tankfarten. Midtøstens andel av global oljeproduksjon er økende, og skipsfarten forblir eksponert og sårbar for redusert oljeeksport fra området. Regionale endringer i global oljeetterspørsel tilsier imidlertid at denne sårbarheten ikke øker i takt med veksten i Midtøstens andel av global oljeproduksjon.

• Sødal, Sigbjørn (2001). Entry, exit and scrapping decisions with investment lags: a series of investment models based on a new approach. Show summary

  Several entry-exit models under price uncertainty are discussed by a new markup approach to investment, starting with the classical model by Dixit (1989). The markup approach, introduced by Dixit et al. (1999), enables us to state the expected value of the firm in the entry-exit model as a function of a chosen pair of entry and exit trigger prices. The optimal policy appears by maximizing the value function with respect to the trigger prices. Extensions being discussed include endogenous production costs, diminishing production capacity over time, limits to the number of available switches, and various models with scrapping decisions and investment lags. The main new extension allows for an investment lag in the entry-exit-scrapping model by Dixit (1988). Implications of the investment lag are investigated by use of experimental data and empirical data from shipping. We also correct some results on investment lags from Bar-Ilan and Strange (1996).

• Sødal, Sigbjørn & Koekebakker, Steen (2001). The value of an operating electricity production unit. Show summary

  In this paper we develop an equilibrium-based net present value model of an operating electricity production unit whose supply is given by a stochastic, mean-reverting process. The price process for electricity is derived from an underlying pair of stochastic, aggregate supply and demand processes that are also mean-reverting, while the instantaneous supply and demand functions are iso-elastic. The model is illustrated by a set of experimental data.

• Sødal, Sigbjørn (2001). Monopoly with timing and scaling options. Show summary

  We develop a model of the investment behavior of a firm that faces a stochastic, downward-sloping demand curve. The firm’s challenge is to determine the optimal scale and time of an investment, so there is a potential for market power in the sense of markup pricing along two dimensions: static market power along a quantity dimension, and dynamic market power along a time dimension. Depending on the specific assumptions, either dimension will be more or less relevant. For example, the option to wait may be useless if the uncertainty of demand is low and the demand curve is not very elastic. Then the decision of the firm simplifies to that of a standard monopoly model. In other cases, the option to wait prevails. Typically, the latter happens when there is much uncertainty and the demand curve is fairly elastic. The formal model is illustrated by decisions in the real estate industry.

• Sødal, Sigbjørn (2001). Dynamic monopolistic competition: How mature innovations can contribute to variety. Show summary

  A dynamic model of monopolistic competition with two-step investment - innovation and production - is developed. It is shown that certain combinations of productivity growth, scale economies and taste for variation can lead to gains from letting innovations mature. Typically, it is optimal to postpone production investments when production is expensive relative to innovation, when the taste for variation is high, and when consumers are patient. The model is analogous to the Spence-Dixit-Stiglitz model, and it opens up for new interpretations of well-known static models. This paper restricts to a brief discussion on implications for international trade and economic growth. We find that small countries can lag behind large countries in terms of consumption when it takes time to transfer technology, and that economic growth can be induced by taste for variation when there are knowledge spillovers from innovation.

• Sødal, Sigbjørn (2001). International security and international shipping, with emphasis on war in the Middle East. Show summary

  This paper discusses the implications of security crises and war for international shipping, with special attention to wars in the Middle East. In general, the potential economic impact of war will continue to be high, but it seems to decrease in a long-term perspective. This is mainly due to the spread of production and trade, which makes it less likely that regional supply and demand shocks caused by wars in the future will have as strong impact on world markets as wars of the past. More specifically, oil shipping does not seem to become more exposed to market shocks of war in the Middle East, despite the fact that an increasing share of global oil production is expected to take place in this region.

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