This paper presents a recombining trinomial tree for valuing real options with changing volatility. The trinomial tree presented in this paper is constructed by simultaneously choosing such a parameterization that sets a judicious state space while having sensible transition probabilities between the nodes. The volatility changes are modeled with the changing transition probabilities while the state space of the trinomial tree is regular and has a fixed number of time and underlying asset price levels. The presented trinomial lattice can be extended to follow a displaced diffusion process with changing volatility, allowing also taking into account the level of the underlying asset price. The lattice can also be easily parameterized based on a cash flow simulation, using ordinary least squares regression method for volatility estimation. Therefore, the presented recombining trinomial tree with changing volatility is more flexible and robust for practice use than common lattice models while maintaining their intuitive appeal.JEL Classification: G31, G13, D81

Mobility-as-a-Service (MaaS) is an example of a systemic innovation, where mobility services addressing different customers' transportation needs are integrated with real-time traveler information, ticketing, and payment services. This paper examines how the differences in institutional setup, stakeholder processes and viewpoints, and technological development have resulted in different approaches to regional governance when supporting systemic innovations in transportation. Two European regions with established collaboration networks in transportation and spatial planning are compared. These regions are the Growth Corridor Finland and the Basel metropolitan area in Switzerland. During August 2017, an invitation to online questionnaire was sent to 410 stakeholders, who had been participating in different stakeholder processes, such as pilot projects, strategy development groups, academic projects, and infrastructure projects in the field of mobility and commuting. With 99 completed questionnaires, the overall response rate was 24.1%. The answers were analyzed to collect stakeholder experiences from previous collaboration efforts, to assess the importance of transportation innovations to the work of these stakeholders, and to get insights about current barriers and supporting factors when developing these systemic innovations. As a result, managerial implications are discussed for these formal collaboration networks in their aspiration to support new mobility innovations.

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Organizations are increasing the use of partnerships but improved models addressing the sharing of profits and risks are needed to foster innovations in networked new product development. We have used a case study approach to explore the implementation of profit- and risk-sharing mechanisms in a virtual enterprise. Lack of a shared vision may have been the most important cause for the early decomposition of the virtual enterprise. Therefore, the trust did not start to accumulate during the cooperation. This would have been imperative for the implementation of profit sharing mechanisms, because risk attitudes seemed to favor hierarchical rewarding mechanisms.