Linear and non-linear Price Decentralization. General equilibrium theory provides the conceptual foundation for our understanding of efficiency and welfare economics. However, at present it does not provide for an adequate understanding in many seetings: for instance, in the case of incomplete financial markets and markets with imperfect information. This project is part of the ongoing and broad research program in the Economic Theory Center of The University of Melbourne on general equilibriu ....Linear and non-linear Price Decentralization. General equilibrium theory provides the conceptual foundation for our understanding of efficiency and welfare economics. However, at present it does not provide for an adequate understanding in many seetings: for instance, in the case of incomplete financial markets and markets with imperfect information. This project is part of the ongoing and broad research program in the Economic Theory Center of The University of Melbourne on general equilibrium theory and mathematical economics. It seeks to extend the classical theory of price decentralization and rectify some of the defects of modern general equilibrium theory.Read moreRead less
The Role of the Family in Facilitating the Human Capital and Labour Market Investments of Young Australians. A nation's future lies in its young people, and society as a whole must take part in ensuring that today's youth acquire the skills, experience, and training necessary not only to cope, but to thrive. The proposed research will make a substantial step forward in understanding how families make decisions about supporting their young adult children and how those decisions are shaped by Aust ....The Role of the Family in Facilitating the Human Capital and Labour Market Investments of Young Australians. A nation's future lies in its young people, and society as a whole must take part in ensuring that today's youth acquire the skills, experience, and training necessary not only to cope, but to thrive. The proposed research will make a substantial step forward in understanding how families make decisions about supporting their young adult children and how those decisions are shaped by Australian social policy. The findings will inform social policy development by providing evidence on pressing issues such as the effects of rising house prices or weakening labour markets on young Australians' ability to invest in education.Read moreRead less
Valuing Life and Time in the Knowledge Economy. This project will help increase the international profile of Australia scholarship in a burgeoning research area of increasing importance: valuation of life, time and health with particular emphasis on the effects of aging and the accumulation of knowledge. It will generate new insights and important welfare and policy implications, which are especially of interest to a knowledge economy like Australia, in which the demographic profile is experienc ....Valuing Life and Time in the Knowledge Economy. This project will help increase the international profile of Australia scholarship in a burgeoning research area of increasing importance: valuation of life, time and health with particular emphasis on the effects of aging and the accumulation of knowledge. It will generate new insights and important welfare and policy implications, which are especially of interest to a knowledge economy like Australia, in which the demographic profile is experiencing a fundamental shift toward unprecedentedly high percentage of the aged population. Read moreRead less
Welfare Economic Issues in the New Classical Economic Framework of Inframarginal Analysis (renewal application). The CIs have developed a framework analysing the classical but largely ignored problems of division of labour. The 2001-2 project extends the framework to examine welfare issues and public policies, including government encouragement of infrastructure, organisational effects of externality-corrective taxes, work ethics and the optimal working week. The proposed extension to this res ....Welfare Economic Issues in the New Classical Economic Framework of Inframarginal Analysis (renewal application). The CIs have developed a framework analysing the classical but largely ignored problems of division of labour. The 2001-2 project extends the framework to examine welfare issues and public policies, including government encouragement of infrastructure, organisational effects of externality-corrective taxes, work ethics and the optimal working week. The proposed extension to this research will address the more fundamental issue of the Pareto optimality of general equilibrium in the new framework and extend the existing analyses to be of more practical relevance with more immediate policy implications.Read moreRead less
Increasing Returns and Economic Efficiency. The project attempts to increase the international profile of Australian research by extending the analysis of the challenging issues of economic efficiency in the presence of increasing returns. The proposed analysis takes account of both allocational efficiency and organizational efficiency. It will integrate the Dixit-Stiglitz model of the traditional analysis with the Yang-Ng-Shi model of the new framework to provide a more realistic analysis that ....Increasing Returns and Economic Efficiency. The project attempts to increase the international profile of Australian research by extending the analysis of the challenging issues of economic efficiency in the presence of increasing returns. The proposed analysis takes account of both allocational efficiency and organizational efficiency. It will integrate the Dixit-Stiglitz model of the traditional analysis with the Yang-Ng-Shi model of the new framework to provide a more realistic analysis that allows for increasing returns in both home and firm/market production. This conceptual extension constitutes an advance that is of analytical value and will also be relevant for the formulation of public economic policy in the Australian setting and also more generally. Read moreRead less
Social Interactions, Group Dynamics, and the Political Economy of Sovereign Transgression: A Laboratory Investigation. Sovereign transgression-for example, confiscation of citizens' wealth by the state--can have a significant negative effect on economic performance. This project will study the under-explored issues of how social interactions and group dynamics can affect the incidence of sovereign transgression and citizen resistance in a controlled laboratory environment. The substantive and me ....Social Interactions, Group Dynamics, and the Political Economy of Sovereign Transgression: A Laboratory Investigation. Sovereign transgression-for example, confiscation of citizens' wealth by the state--can have a significant negative effect on economic performance. This project will study the under-explored issues of how social interactions and group dynamics can affect the incidence of sovereign transgression and citizen resistance in a controlled laboratory environment. The substantive and methodological innovations can increase the Australian knowledge base. The project will facilitate collaboration between Australian researchers and international experts. It will also expose Australian undergraduate students to experimental economics, and provide graduate students with hands-on training in using the laboratory method to study economic behaviour.
Read moreRead less
Economics of continuous-time financial markets and endogenous pricing. This research has the potential to benefit society by improving the accuracy of pricing in securities markets. First, because the research leads to specific predictions about the interaction of prices for different type of assets, it should lead to more accurate pricing across markets, such as housing, stocks and bonds, which currently function largely independently. Second, it should lead to more accurate pricing of derivati ....Economics of continuous-time financial markets and endogenous pricing. This research has the potential to benefit society by improving the accuracy of pricing in securities markets. First, because the research leads to specific predictions about the interaction of prices for different type of assets, it should lead to more accurate pricing across markets, such as housing, stocks and bonds, which currently function largely independently. Second, it should lead to more accurate pricing of derivatives in the situations where the exercise price of the derivatives differs significantly from the current price of the underlying stock.Read moreRead less
Economics of Incomplete Markets and Pricing in Equilibrium. This research has the potential to benefit society by improving the accurary of pricing in securities markets. First, because the research leads to specific predictions about the interaction of prices for different type of assets, it should lead to more accurate pricing across markets, such as housing, stocks and bonds, which currently function largely independentlty. Second, it should lead to more accurate pricing of derivatives in the ....Economics of Incomplete Markets and Pricing in Equilibrium. This research has the potential to benefit society by improving the accurary of pricing in securities markets. First, because the research leads to specific predictions about the interaction of prices for different type of assets, it should lead to more accurate pricing across markets, such as housing, stocks and bonds, which currently function largely independentlty. Second, it should lead to more accurate pricing of derivatives in the situations where the execise price of the derivatives differs significantly from the current price of the underlying stock.Read moreRead less
Designing Innovative Allocation Mechanisms for Public Policy. This project applies modern techniques of game theory, auction theory, and experimental economics to public policy design. It can deliver public benefits across a broad front by introducing and demonstrating a new policy design methodology to Australia, by delivering better policy design on specific projects, by building capacity, and by creating a network of collaborators including both University researchers and public sector policy ....Designing Innovative Allocation Mechanisms for Public Policy. This project applies modern techniques of game theory, auction theory, and experimental economics to public policy design. It can deliver public benefits across a broad front by introducing and demonstrating a new policy design methodology to Australia, by delivering better policy design on specific projects, by building capacity, and by creating a network of collaborators including both University researchers and public sector policy experts.Read moreRead less
A Synthesis of Agency and Managerial Power Theories and Its Applications to Corporate Governance, Management Compensation, and Firm Performance. The existing models of corporate governance in economics and finance based on agency theory do not successfully portray all modern corporations. Thus the importance of a new and rigorous way to study corporate governance can be hardly exaggerated. This project will provide a synthesized theory of corporate governance and is expected to produce highest- ....A Synthesis of Agency and Managerial Power Theories and Its Applications to Corporate Governance, Management Compensation, and Firm Performance. The existing models of corporate governance in economics and finance based on agency theory do not successfully portray all modern corporations. Thus the importance of a new and rigorous way to study corporate governance can be hardly exaggerated. This project will provide a synthesized theory of corporate governance and is expected to produce highest-quality research publishable in top-tier journals. This will, among others, enhance Australia's standing as a knowledge nation. This project is also expected to contribute to the discussions on how to improve corporate governance and regulation of management compensation both in Australia and abroad. Read moreRead less