String instantons, fluxes and moduli stabilization

We analyze a class of dual pairs of heterotic and type I models based on freely-acting Z2×Z2 orbifolds in four dimensions. Using the adiabatic argument, it is possible to calculate non-perturbative contributions to the gauge coupling threshold corrections on the type I side by exploiting perturbative calculations on the heterotic side, without the drawbacks due to twisted moduli. The instanton effects can then be combined with closed-string fluxes to stabilize most of the moduli fields of the internal manifold, and also the dilaton, in a racetrack realization of the type I model.