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The saturation mechanism of magnetorotational instability (MRI) is examined through analytical quasi-linear theory and through nonlinear computation of a single mode in a rotating disk. We find that large-scale magnetic field is generated through the α-effect (the correlated product of velocity and magnetic field fluctuations) and causes the MRI mode to saturate. If the large-scale plasma flow is allowed to evolve, the mode can also saturate through its flow relaxation. In astrophysical plasmas, for which the flow cannot relax because of gravitational constraints, the mode saturates through field generation only.
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