Optimal Policy Design with Entry: A Model of Aggregative Oligopoly Games. This project aims to develop a theory of endogenous market structures using aggregative oligopoly games to engage issues in competition, trade and innovation policy. Effective and innovative policy design is crucial for economic growth and productivity. Policy analysis with endogenous market structures is in need of better tools. The toolkit of aggregative games, in which each player’s profit can be written as a function o ....Optimal Policy Design with Entry: A Model of Aggregative Oligopoly Games. This project aims to develop a theory of endogenous market structures using aggregative oligopoly games to engage issues in competition, trade and innovation policy. Effective and innovative policy design is crucial for economic growth and productivity. Policy analysis with endogenous market structures is in need of better tools. The toolkit of aggregative games, in which each player’s profit can be written as a function of own action and an aggregate variable, would greatly simplify the analysis of oligopoly interaction. This would lead to a tractable but general welfare analysis yielding new results. The framework is designed to allow us to examine complex policy questions in a simplified way, accommodating models with heterogeneous players and entry, and generalising models with different types of competition and demand specification.Read moreRead less
Mechanism design under bounded rationality: The optimal contracts in the complex world. The research will help to clarify the nature of optimal contracts in real life environments. An important feature of such environments is that they are complex so that actors cannot be assumed to behave fully rationally. We propose to address the question of optimal contract design under bounded rationality. Determining the incidence of costs of boundedly rational behaviour may provide foundations for some p ....Mechanism design under bounded rationality: The optimal contracts in the complex world. The research will help to clarify the nature of optimal contracts in real life environments. An important feature of such environments is that they are complex so that actors cannot be assumed to behave fully rationally. We propose to address the question of optimal contract design under bounded rationality. Determining the incidence of costs of boundedly rational behaviour may provide foundations for some policy proposals in areas as diverse as industrial relations and income taxation in Australian settings.
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Privatisation, Regulation and Institutional Structures of Airports: An International Study. Airports are typically locational monopolies possessing strong market power - abuse of this is controlled by public ownership, regulation or not-for-profit operation. All these pose problems for achieving economic efficiency while meeting environmental standards. Design of efficient regulation, and the Australian experiment with price monitored private airports, will be analysed. Using data from Austr ....Privatisation, Regulation and Institutional Structures of Airports: An International Study. Airports are typically locational monopolies possessing strong market power - abuse of this is controlled by public ownership, regulation or not-for-profit operation. All these pose problems for achieving economic efficiency while meeting environmental standards. Design of efficient regulation, and the Australian experiment with price monitored private airports, will be analysed. Using data from Australian and overseas airports, the performance of airports operating under the alternative systems will be evaluated, enabling an assessment of performance and privatisation; a comparison of private, public and not-for-profit systems; and pointing out how better governance options can be designed.Read moreRead less
New Approaches to the Analysis of Count Time Series. The focus of this proposal is on the analysis of data that enumerate events over time. Occurrences of such count data abound in economics and business, examples being observations on insurance claims, loan defaults and individual product demand. This project develops a suite of innovative methods for modelling and predicting event counts. The methods explicitly accommodate both the discreteness of the data and possible complexities in its evo ....New Approaches to the Analysis of Count Time Series. The focus of this proposal is on the analysis of data that enumerate events over time. Occurrences of such count data abound in economics and business, examples being observations on insurance claims, loan defaults and individual product demand. This project develops a suite of innovative methods for modelling and predicting event counts. The methods explicitly accommodate both the discreteness of the data and possible complexities in its evolution over time. In so doing, they enable both accurate inferences regarding the dynamic structure of the data to be drawn and accurate forecasts of future event counts to be produced.Read moreRead less
Structural Adjustment, Income Risk, and Human Capital Specificity. This project will build a macroeconomic model to attempt to understand how an economy should manage structural adjustment to economic shocks (such as a substantial change in trade policy, significant exchange rate appreciation, or major technological change) in order to induce the reallocation of labour and other factors of production across different sectors of the economy. Two key features of the model will be human capital spe ....Structural Adjustment, Income Risk, and Human Capital Specificity. This project will build a macroeconomic model to attempt to understand how an economy should manage structural adjustment to economic shocks (such as a substantial change in trade policy, significant exchange rate appreciation, or major technological change) in order to induce the reallocation of labour and other factors of production across different sectors of the economy. Two key features of the model will be human capital specificity, that is, skills may not be easily transferrable across sectors of the economy, and incomplete markets for income risk so that the burdens of adjustment may be concentrated on displaced workers rather than being efficiently shared. Various policies for managing adjustment will be evaluated quantitatively.Read moreRead less
Carbon pricing and its impacts on the productivity growth of Australian industries. This project seeks to investigate the effects of carbon pricing on the productivity of Australian industries. It will provide important insights into the issues of productivity growth and technical efficiency for Australian industries following the imposition of a price on carbon, implemented either through a carbon tax or a carbon trading scheme.