MEAN–VARIANCE INSURANCE DESIGN WITH COUNTERPARTY RISK AND INCENTIVE COMPATIBILITY

This paper studies the optimal insurance design from the perspective of an insured when there is possibility for the insurer to default on its promised indemnity. Default of the insurer leads to limited liability, and the promised indemnity is only partially recovered in case of a default. To alleviate the potential ex post moral hazard, an incentive compatibility condition is added to restrict the permissible indemnity function. Assuming that the premium is determined as a function of the expected coverage and under the mean–variance preference of the insured, we derive the explicit structure of the optimal indemnity function through the marginal indemnity function formulation of the problem. It is shown that the optimal indemnity function depends on the first and second order expectations of the random recovery rate conditioned on the realized insurable loss. The methodology and results in this article complement the literature regarding the optimal insurance subject to the default risk and provide new insights on problems of similar types.

Nonconforming P1 Finite Element for the Biharmonic Problem and Its Application to Stokes Problem

The aim of this paper is to simulate the two-dimensional stationary Stokes problem. In vorticity-Stream function formulation, the Stokes problem is reduced to a biharmonic one; this approach leads to a formulation only based on the stream functions and therefore can only be applied to two-dimensional problems. The idea developed in this paper is to use the discretization of the Laplace operator by the nonconforming [Formula: see text] finite element. For the solutions which admit a regularity greater than [Formula: see text], in the general case, the convergence of the method is shown with the techniques of compactness. For solutions in [Formula: see text] an error estimate is proved, and numerical experiments are performed for the steady-driven cavity problem.

A Review of Model Predictive Controls Applied to Advanced Driver-Assistance Systems

Advanced Driver-Assistance Systems (ADASs) are currently gaining particular attention in the automotive field, as enablers for vehicle energy consumption, safety, and comfort enhancement. Compelling evidence is in fact provided by the variety of related studies that are to be found in the literature. Moreover, considering the actual technology readiness, larger opportunities might stem from the combination of ADASs and vehicle connectivity. Nevertheless, the definition of a suitable control system is not often trivial, especially when dealing with multiple-objective problems and dynamics complexity. In this scenario, even though diverse strategies are possible (e.g., Equivalent Consumption Minimization Strategy, Rule-based strategy, etc.), the Model Predictive Control (MPC) turned out to be among the most effective ones in fulfilling the aforementioned tasks. Hence, the proposed study is meant to produce a comprehensive review of MPCs applied to scenarios where ADASs are exploited and aims at providing the guidelines to select the appropriate strategy. More precisely, particular attention is paid to the prediction phase, the objective function formulation and the constraints. Subsequently, the interest is shifted to the combination of ADASs and vehicle connectivity to assess for how such information is handled by the MPC. The main results from the literature are presented and discussed, along with the integration of MPC in the optimal management of higher level connection and automation. Current gaps and challenges are addressed to, so as to possibly provide hints on future developments.

3-D Axisymmetric Transonic Shock Solutions of the Full Euler System in Divergent Nozzles

We establish the stability of 3-D axisymmetric transonic shock solutions of the steady full Euler system in divergent nozzles under small perturbations of an incoming radial supersonic flow and a constant pressure at the exit of the nozzles. To study 3-D axisymmetric transonic shock solutions of the full Euler system, we use a stream function formulation of the full Euler system for a 3-D axisymmetric flow. We resolve the singularity issue arising in stream function formulations of the full Euler system for a 3-D axisymmetric flow. We develop a new scheme to determine a shock location of a transonic shock solution of the steady full Euler system based on the stream function formulation.