Time Delay, Externalities and Attitudes Toward Taxation. Public attitudes toward a policy have a significant impact on its effectiveness. The aim of this project is to investigate the determinants of public attitudes for incentive-based institutions, particularly taxes, by highlighting the importance of considering the intertemporal properties of taxation: when costs and benefits of taxation occur at different times. This project is designed to be a controlled study of how and why public attitud ....Time Delay, Externalities and Attitudes Toward Taxation. Public attitudes toward a policy have a significant impact on its effectiveness. The aim of this project is to investigate the determinants of public attitudes for incentive-based institutions, particularly taxes, by highlighting the importance of considering the intertemporal properties of taxation: when costs and benefits of taxation occur at different times. This project is designed to be a controlled study of how and why public attitudes towards taxation are influenced by the temporal structure of the externalities that the taxes are meant to control. The anticipated goal is to inform the design of institutions that the public will accept and, more generally, improve the understanding of intertemporal decision-making in environments with delayed externalities.Read moreRead less
Strategic Behaviour in Games. John von Neumann’s minimax solution (1928) and its generalisation to mixed-strategy Nash (1950) equilibrium are the cornerstones of modern game theory, the mathematical framework for the study of decision making when the actions of different decision makers interact. This project studies human behaviour in situations where decision makers have an incentive to be unpredictable. The proposed research will shed light on the sources of the failure of the theory in the l ....Strategic Behaviour in Games. John von Neumann’s minimax solution (1928) and its generalisation to mixed-strategy Nash (1950) equilibrium are the cornerstones of modern game theory, the mathematical framework for the study of decision making when the actions of different decision makers interact. This project studies human behaviour in situations where decision makers have an incentive to be unpredictable. The proposed research will shed light on the sources of the failure of the theory in the lab, and assesses the practical significance of the statistical tests used to evaluate laboratory data on mixed-strategy play.Read moreRead less
Games and decisions with bounded rationality: theory and economic implications. This project will develop concepts and tools for decision making in complex environments, where it is impossible to fully characterise the possible outcomes and factors that may affect them. A central goal will be to integrate heuristic rules such as the precautionary principle with the more formal approach adopted in benefit-cost analysis.
Introspection, Learning, and Equilibrium in Games: Theory and Experiment. Game theory is increasingly being used in the social sciences, but the extreme reliance on perfect decision making and perfect foresight has raised doubts about its empirical relevance. This scepticism is reinforced by laboratory evidence showing behaviour patterns that are systematically biased away from game-theoretic predictions. This project concerns the development and testing of models more descriptive of actual huma ....Introspection, Learning, and Equilibrium in Games: Theory and Experiment. Game theory is increasingly being used in the social sciences, but the extreme reliance on perfect decision making and perfect foresight has raised doubts about its empirical relevance. This scepticism is reinforced by laboratory evidence showing behaviour patterns that are systematically biased away from game-theoretic predictions. This project concerns the development and testing of models more descriptive of actual human behaviour. One aim is to deliver hybrid models able to reproduce interesting patterns of first-period play (introspection), time-series data in repeated games (learning), and systematic departures from static equilibrium. Another aim is to apply a successful hybrid to improve the design of economic and social institutions.Read moreRead less
The Economics of Envy. Envy is persistent and universal. It may help explain why humans are relatively less hierarchical than other primate species and prone to egalitarianism. Envy may help explain the formation of political and social structures and taxation and redistribution policies. This project will examine how in-group and out-group bias, social/economic mobility, and luck versus ability exacerbate and mitigate social preference and when these factors result in destructive and/or constru ....The Economics of Envy. Envy is persistent and universal. It may help explain why humans are relatively less hierarchical than other primate species and prone to egalitarianism. Envy may help explain the formation of political and social structures and taxation and redistribution policies. This project will examine how in-group and out-group bias, social/economic mobility, and luck versus ability exacerbate and mitigate social preference and when these factors result in destructive and/or constructive envy. This investigation contributes to the understanding of envy and its behavioural manifestations. Understanding the correlates of social preferences and the resulting behaviour is important for developing policy to reduce destructive envy and encourage constructive envy. Read moreRead less
The rate of time preference in choice experiments: A systematic re-analysis. This project intends to re-analyse data from over 20 years of past research to understand when and why people sometimes make short-sighted choices. Time preference is a core concept in both theoretical and applied economics and a key input in public policy, yet empirical understanding of it is poor. Almost all important decisions of households, businesses and government involve benefits and costs that unfold over time. ....The rate of time preference in choice experiments: A systematic re-analysis. This project intends to re-analyse data from over 20 years of past research to understand when and why people sometimes make short-sighted choices. Time preference is a core concept in both theoretical and applied economics and a key input in public policy, yet empirical understanding of it is poor. Almost all important decisions of households, businesses and government involve benefits and costs that unfold over time. Many economists have used decision-making experiments to study how people value the future and make trade-offs over time, but these have not reached any clear consensus. This project plans to systematically re-analyse primary data using state-of-the-art estimation techniques to generate new estimates of the discount rate for each study. These will then be analysed in a meta-regression analysis to identify the factors that cause discount rates to vary between studies.Read moreRead less
Posted prices, bargaining and auctions: an experimental examination. This project uses economic methods to investigate how trading institutions affect prices and efficiency. It examines markets with directed search: buyers visit sellers based on any information they have. Simultaneous buyer choices and sellers’ capacity constraints lead to “frictions” where not all profitable exchanges occur - more realistic than the usual “frictionless” assumption. The project will vary: whether sellers can pos ....Posted prices, bargaining and auctions: an experimental examination. This project uses economic methods to investigate how trading institutions affect prices and efficiency. It examines markets with directed search: buyers visit sellers based on any information they have. Simultaneous buyer choices and sellers’ capacity constraints lead to “frictions” where not all profitable exchanges occur - more realistic than the usual “frictionless” assumption. The project will vary: whether sellers can post prices in advance; and, whether and how negotiation occurs based on how many buyers (one vs two or more) visit a seller. The project will use results from auction, bargaining, game and search theories, and new analysis, to form predictions, which will be tested using experiments. The results should have implications for labour and competition policies.Read moreRead less
The Aging Population, Superannuation and Corporate Dividend Policy. The project intends to examine how population wealth and age affect one important aspect of corporate decision-making, namely dividend policy. Researchers invest considerable effort in understanding how demographics impact upon the need for, and structure of, government systems including social security and taxation, but relatively little is known about its effect on capital markets or corporate decision-making. Although individ ....The Aging Population, Superannuation and Corporate Dividend Policy. The project intends to examine how population wealth and age affect one important aspect of corporate decision-making, namely dividend policy. Researchers invest considerable effort in understanding how demographics impact upon the need for, and structure of, government systems including social security and taxation, but relatively little is known about its effect on capital markets or corporate decision-making. Although individual investors are, by nature, atomistic, the project argues changes in investor preferences will ultimately prompt companies to alter their dividend policies. Pressure on firms to update these policies will come from superannuation and pension fund managers who, as fiduciaries, will invest money consistent with clients' revised preferences. The project aims to more fully characterise how Australia's ageing population will affect the public and private sectors.Read moreRead less
Honesty and efficiency in the provision of expert services: doctors and other experts as participants in economic experiments. Experts serve us when we see the doctor, the financial planner or the car mechanic. In all these case the expert can take advantage of his superior knowledge and sell us something we do not need. This research will inform policy makers about the underlying motives of real world experts and allow them to design better institutions.
Income insecurity in Australia: who is feeling the pinch and why? This project aims to measure and investigate the drivers of income insecurity in Australia. It will provide an evaluation of whether income growth is sufficient to compensate for any welfare loss due to higher income risk and the effectiveness of government taxes and transfers in alleviating income risks for different population sub-groups.