Generalised Reichenbachian common cause systems

The principle of the common cause claims that if an improbable coincidence has occurred, there must exist a common cause. This is generally taken to mean that positive correlations between non-causally related events should disappear when conditioning on the action of some underlying common cause. The extended interpretation of the principle, by contrast, urges that common causes should be called for in order to explain positive deviations between the estimated correlation of two events and the expected value of their correlation. The aim of this paper is to provide the extended reading of the principle with a general probabilistic model, capturing the simultaneous action of a system of multiple common causes. To this end, two distinct models are elaborated, and the necessary and sufficient conditions for their existence are determined

Generalised Reichenbachian Common Cause Systems

The principle of the common cause claims that if an improbable coincidence has occurred, there must exist a common cause. This is generally taken to mean that positive correlations between non-causally related events should disappear when conditioning on the action of some underlying common cause. The extended interpretation of the principle, by contrast, urges that common causes should be called for in order to explain positive deviations between the estimated correlation of two events and the expected value of their correlation. The aim of this paper is to provide the extended reading of the principle with a general probabilistic model, capturing the simultaneous action of a system of multiple common causes. To this end, two distinct models are elaborated, and the necessary and sufficient conditions for their existence are determined

Reichenbachian common cause systems revisited

According to Reichenbach’s principle of common cause, positive statistical correlations for which no straightforward causal explanation is available should be explained by invoking the action of a hidden conjunctive common cause. Hofer-Szabó and Rédei’s notion of a Reichenbachian common cause system is meant to generalize Reichenbach’s conjunctive fork model to fit those cases in which two or more common causes cooperate in order to produce a positive statistical correlation. Such a generalization is proved to be unsatisfactory in the light of a probabilistic conception of causation. Accordingly, an alternative model for systems of multiple common causes is offered, which is capable of emulating the explanatory efficacy of Reichenbachian common cause systems, while overcoming their major conceptual shortcomings at the same time

Valuation of forst group - the potential exit strategy in a sell-side process with asahi breweries

This paperwork has the objective of introducing the potential acquisition of Birra Forst, an Italian company active in the production and distribution of beer. Following the guidelines of the Field Lab, an M&A sell-side case study is outlined. For our analysis, we have proceeded carrying out a company evaluation both from a financial and a market point of view. We have then shifted our focus to some possible buyers and to the potential synergies that might develop in the process

Screening Investments to Reduce the Risk of Hydrologic Failures in the Headwork System Supplying Apulia (Italy) – Role of Economic Evaluation and Operation Hydrology

The paper introduces and applies a methodology to screen investments aimed at reducing water supply risks due to hydrologic failures in headwork systems for municipal use, based on the principles of cost-benefit analysis. As risk includes both the probability of a failure and its effect, the methodology combines a simulation module of the system, fed by a stochastic hydrologic input to reproduce the probability distribution of the failures, with a metric for supply failure damage provided by the price – demand relationship for municipal water. Benefits are assessed as the averted damage compared to a base case without investments. This approach is then combined with the classic discounted cashflow approach of cost– benefit analysis to allow for the dynamics of both water supply and demand due to trends in population growth, individual consumption and, above all, planned reduction of losses in water distribution networks. The methodology is applied to screen a number of different supply-side projects for the headwork system supplying Apulia, in southern Italy featuring both regulated surface and groundwater resources and providing drinking water to over 4,000,000 persons. The procedure allows both ranking of single projects by their economical performances and the economic evaluation of combinations of different projects. The study also aims to assess the impact of the selected time scale, of cross-correlation among production sites, and of the specification of the demand function on projects' economic indicators. Results show that each modelling assumption has a considerable impact on the value of the economic indicators in absolute terms, but ranking of the different projects seems to be less sensitive to such modelling aspects

A simulation/optimization model for selecting infrastructure alternatives in complex water resource systems

The paper introduces a simulation/optimization procedure for the assessment and the selection of infrastructure alternatives in a complex water resources system, i.e. in a multisource (reservoirs) multipurpose bulk water supply scheme. An infrastucture alternative is here a vector X of n decision variables describing the candidate expansions/new plants/water transfers etc. Each parameter may take on a discrete number of values, with its own investment cost attached. The procedure uses genetic algorithms for the search of the optimal vector X through operators mimicking the mechanisms of natural selection. For each X, the value of the objective function (O.F.) is assessed via a simulation model. Simulation is necessary as the O.F. contains, besides investment costs, also incremental operation costs and benefits that depend on the incremental water amounts which the alternative can provide. The simulation model transforms a thirty-year hydrologic input at daily/monthly scale in water allocations, accounting for the usual non-negativity constraints and using some simple, sytem-specific rules aimed at reducing spills and at sharing water deficits among demand centres. Different O.Fs and constraints have been tested, such as incremental financial cost/benefit minimization under various maximum water deficit constraints scenarios or cost/benefit mimization including scarcity costs. This latter approach has the advantage of implicitly allowing for the magnitude of deficits, but requires the assessment of deficit-scarcity cost relationships. The application of the procedure to a water resources system in south-western Sicily shows that the model is able to converge to results that are consistent with the planning options expressed by the selected O.Fs

Multi-year drought frequency analysis at multiple sites by operational hydrology - A comparison of methods

This paper compares two generators of yearly water availabilities from sources located at multiple sites with regard to their ability to reproduce the characteristics of historical critical periods and to provide reliable results in terms of the return period of critical sequences of different length. The two models are a novel multi-site Markov mixture model explicitly accounting for drought occurrences and a multivariate ARMA. In the case of the multisite Markov mixture model parameter estimation is limited to a search in the parameter space guided by the value of parameter k to show the sensitivity of the model to this parameter. Application to two of the longest time series of streamflows available in Sicily (Italy) shows that the models can provide quite different results in terms of estimated return periods of historic droughts, although they seem to perform more uniformly when it comes to simulate drought-related statistics such as drought length, severity and intensity. The role of parameter selection for the multisite Markov mixture model and of the marginal probability of generated flows in providing results consistent with the characteristics of the observed series is discussed. Both models are applied to the system of sources supplying the city of Palermo (Sicily) and its environs showing the applicability of the newly developed multisite Markov mixture model to medium-to-large scale water resources systems