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
New Directions in Information Economics and Environmental Policy. Recent developments in economic theory, experimental economics, information systems and biophysical modelling have made possible a new generation of policy instruments that can be applied in environmental economics. A recent pilot study of biodiversity preservation auctions in Victoria has demonstrated the practicality in principle of these techniques. We will build on this pilot study to develop practical policy instruments based ....New Directions in Information Economics and Environmental Policy. Recent developments in economic theory, experimental economics, information systems and biophysical modelling have made possible a new generation of policy instruments that can be applied in environmental economics. A recent pilot study of biodiversity preservation auctions in Victoria has demonstrated the practicality in principle of these techniques. We will build on this pilot study to develop practical policy instruments based on these principles.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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Broadening Choice and Increasing Diversity in Public Schools. Currently, most families are limited to the public school in their catchment area, meaning the area in which they can afford to live. This leads to socio-economically and ethnically homogenous schools and entrenches disadvantage, as well as denying students the crucial life lessons that flow from being part of a diverse student body. This project aims to investigate a model for allocating public school places that integrates catchment ....Broadening Choice and Increasing Diversity in Public Schools. Currently, most families are limited to the public school in their catchment area, meaning the area in which they can afford to live. This leads to socio-economically and ethnically homogenous schools and entrenches disadvantage, as well as denying students the crucial life lessons that flow from being part of a diverse student body. This project aims to investigate a model for allocating public school places that integrates catchment areas. The expected outcome would be a system that gives families a wider choice, enabling them to enrol in out-of-area schools, while ensuring that allocations remain fair, equitable and balanced, and also delivering benefits such as achieving a desired level of diversity in student populations within schoolsRead moreRead less
Social Network Analysis: Social Media, Peer Effects and the Environment. The aims of this proposal are to better understand the role of networks in different activities such as social media, education, crime and environment-friendly behaviour. The project expects to help inform the design and practice of policies for education and environmental authorities, police and media markets. Social networks are pervasive in Australia. The project tackles issues of criminal gangs in Australian cities, the ....Social Network Analysis: Social Media, Peer Effects and the Environment. The aims of this proposal are to better understand the role of networks in different activities such as social media, education, crime and environment-friendly behaviour. The project expects to help inform the design and practice of policies for education and environmental authorities, police and media markets. Social networks are pervasive in Australia. The project tackles issues of criminal gangs in Australian cities, the political system and environment-friendly behaviours. This project is at the frontier of work in the economics of networks, with expected outcomes to include new models and methods to better understand the impact of social networks. Benefits include clear policy recommendations to improve welfare in Australian society.Read moreRead less
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
New methods in network economics to study environment-friendly behaviours. This project aims to develop two new methodologies for measuring how people interact with each other and how one’s peers affect their outcomes. The project expects to test these new ground-breaking models for investigating the effect of peers and networks on environmental issues, such as recycling behaviours. The anticipated outcomes of this project include new theoretical and empirical advancements for studying the econo ....New methods in network economics to study environment-friendly behaviours. This project aims to develop two new methodologies for measuring how people interact with each other and how one’s peers affect their outcomes. The project expects to test these new ground-breaking models for investigating the effect of peers and networks on environmental issues, such as recycling behaviours. The anticipated outcomes of this project include new theoretical and empirical advancements for studying the economics of networks and peers for better policy design. Benefits include clear policy recommendations to motivate environment-friendly behaviours. Read moreRead less