In this paper we investigate the diffusion process of renewable energy technology in Italy through the study and estimation of different mathematical models proposed in the literature. Basing the estimation on historical data of the installed power, we find that the pioneer of new product diffusion models, the Bass model, is appropriate to represent the photovoltaic technology diffusion process, whereas after a comparison among the most important models discussed in the literature, we conclude that the Non-Uniform Influence (NUI) model describes the wind technology diffusion process in the most accurate way. The NUI model is also used as a prediction instrument for the diffusion dynamics of wind technology. In fact, we fixed the level of installed power to reach at a future data, and simulated the diffusion curve to find how many years are needed to get to the target.

In this paper a simulation approach for defaultable yield curves is developed within the Heath et al. (1992) framework. The default event is modelled using the Cox process where the stochastic intensity represents the credit spread. The forward credit spread volatility function is affected by the entire credit spread term structure. The paper provides the defaultable bond and credit default swap option price in a probability setting equipped with a subfiltration structure. The Euler–Maruyama stochastic integral approximation and the Monte Carlo method are applied to develop a numerical scheme for pricing. Finally, the antithetic variable technique is used to reduce the variance of credit default swap option prices.