General market equilibrium analysis of securitisable assets in the presence of private information, when contracts are incomplete. Three key markets (among others) were involved in the gestation of the worst financial crisis seen since the great depression: the market for mortgages and the market for securities, backed by mortgages and housing market. The focus of this project is to examine financial fragility in such markets, theoretically applying outcomes to Australian policy.
Harm-minimisation policies and the economics of controlling illicit drug use. The use of illicit drugs and its consequences are of major concern in Australia. Policies seeking to directly curb illicit drug use have met with mixed success and, over time, pressure has been placed on policymakers to switch toward increased reliance on harm-minimisation policies. This switch can generate adverse incentive effects by reducing the user costs of illicit drug use which acts to increase illicit drug use. ....Harm-minimisation policies and the economics of controlling illicit drug use. The use of illicit drugs and its consequences are of major concern in Australia. Policies seeking to directly curb illicit drug use have met with mixed success and, over time, pressure has been placed on policymakers to switch toward increased reliance on harm-minimisation policies. This switch can generate adverse incentive effects by reducing the user costs of illicit drug use which acts to increase illicit drug use. Cost-effectively mitigating these adverse incentive effects can improve the effectiveness of policy by promoting harm- minimisation without seriously sacrificing drug use abstinence objectives. Read moreRead less
An Economic Analysis of Bankruptcy and Financial Reorganization in Australia. We examine the question of whether the new Australian bankruptcy law is too lenient on firms in financial trouble. We will assemble detailed economic data on a large number of bankrupt firms and use the data to measure the performance of the Australian bankruptcy system. The outcome will be a more complete understanding of how bankruptcy law saves viable firms and eliminates inefficient firms. The project will assist p ....An Economic Analysis of Bankruptcy and Financial Reorganization in Australia. We examine the question of whether the new Australian bankruptcy law is too lenient on firms in financial trouble. We will assemble detailed economic data on a large number of bankrupt firms and use the data to measure the performance of the Australian bankruptcy system. The outcome will be a more complete understanding of how bankruptcy law saves viable firms and eliminates inefficient firms. The project will assist policy-makers designing bankruptcy law. The national benefit will be a bankruptcy system that balances the need to give innovating entrepreneurs a second chance against the danger of
encouraging too many unprofitable firms to limp on and waste
resources.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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Decentralised assets trading, centralised clearing and systemic risk. This project aims to study the effect of regulating over-the-counter (OTC) financial markets on economic performance. The lack of transparency of OTC financial markets may have exacerbated the severity of the 2007-09 financial crisis. In response, regulators around the world decided to mandate centralised clearing of derivatives traded OTC, believing this would reduce system-wide risk. This project will study the regulatory ch ....Decentralised assets trading, centralised clearing and systemic risk. This project aims to study the effect of regulating over-the-counter (OTC) financial markets on economic performance. The lack of transparency of OTC financial markets may have exacerbated the severity of the 2007-09 financial crisis. In response, regulators around the world decided to mandate centralised clearing of derivatives traded OTC, believing this would reduce system-wide risk. This project will study the regulatory change’s effects on market participation, volumes of trade and prices, and the behavioural effect of shifting risk from market participants to clearinghouses. It expects to suggest remedial policies clearinghouses could implement to control market participants’ risk appetite. These can help enhance future productivity and reduce unemployment in Australia.Read moreRead less
Internal capital markets, divisional rent-seeking and optimal incentives: theory and evidence. There exists a considerable gap between real-world economic organizations and the economic theory of the firm. This project provides formal theories of resource allocation within multidivisional corporations and the nature of optimal incentives, thereby contributing to fill this gap. The project is expected to produce highest-quality research publishable in top-tier journals. This will, among others, e ....Internal capital markets, divisional rent-seeking and optimal incentives: theory and evidence. There exists a considerable gap between real-world economic organizations and the economic theory of the firm. This project provides formal theories of resource allocation within multidivisional corporations and the nature of optimal incentives, thereby contributing to fill this gap. The project is expected to produce highest-quality research publishable in top-tier journals. This will, among others, enhance Australia's standing as a knowledge nation. Additional benefit comes from the possibility of longer term collaborative research between Monash University and the University of Bristol, and possible research collaboration between Australian and British economists that goes beyond the two institutions. Read moreRead less
Discovery Early Career Researcher Award - Grant ID: DE170101183
Funder
Australian Research Council
Funding Amount
$322,404.00
Summary
Information sharing in networks and the allocation of medical appointments. The project aims to research social networks and the normative allocation of invisible goods. It will study information sharing in social networks and the allocation of consultant led appointments to patients. This project is intended to benefit society, public policy and health by showing how social networks’ design options affect users’ welfare and the network owner’s revenue.
Multi-tier economic hierarchies: existence, structure, and optimal incentives. There exists a considerable gap between real-world economic organizations and the economic theory of the firm. This project provides formal theories of multi-tier hierarchies, thereby contributing to fill the gap. The project is expected to produce highest-quality research publishable in top-tier journals. This will, among others, enhance Australia's standing as a knowledge nation. Additional benefit comes from inter ....Multi-tier economic hierarchies: existence, structure, and optimal incentives. There exists a considerable gap between real-world economic organizations and the economic theory of the firm. This project provides formal theories of multi-tier hierarchies, thereby contributing to fill the gap. The project is expected to produce highest-quality research publishable in top-tier journals. This will, among others, enhance Australia's standing as a knowledge nation. Additional benefit comes from international collaboration with high-calibre theorists such as the two partner investigators. The project would provide opportunities for communication between Australian economists and the partner investigators, as well as a launch pad for further collaboration in the future.Read moreRead less
An economic analysis of multi-period reform programs. This project aims to use a mechanism design approach to study multi-period reform programs and their use in the transition from status quo institutions. The project intends to shed light on the difficulties of introducing efficiency enhancing long-term policies. Expected outcomes include theoretical models that incorporate adjustment costs, common values, and complicated status quo institutions into models of economic reform from a mechanism ....An economic analysis of multi-period reform programs. This project aims to use a mechanism design approach to study multi-period reform programs and their use in the transition from status quo institutions. The project intends to shed light on the difficulties of introducing efficiency enhancing long-term policies. Expected outcomes include theoretical models that incorporate adjustment costs, common values, and complicated status quo institutions into models of economic reform from a mechanism design perspective as well as optimal dynamic reform policies in the presence of these frictions, focusing attention in the trade-off between static efficiency and dynamic welfare gains. Intended benefits include insights that are wildly applicable to the provision of public infrastructure and management of public resources.Read moreRead less
Information and market price manipulation in trade. As we can see from the financial crisis, speculative trading in financial markets can have real world effects. Inside traders can exploit their information for more profits. At this stage, we do not fully understand the role of diverse information in the financial system and we need better ways to model price manipulation and information in a dynamic setting. This proposal seeks to supply a reference framework for analyzing price manipulatio ....Information and market price manipulation in trade. As we can see from the financial crisis, speculative trading in financial markets can have real world effects. Inside traders can exploit their information for more profits. At this stage, we do not fully understand the role of diverse information in the financial system and we need better ways to model price manipulation and information in a dynamic setting. This proposal seeks to supply a reference framework for analyzing price manipulation. Recently, there has been an increasing interest in the informed trader's dynamic strategy. By strengthening this research area, this project will give new momentum to Australian economic theory.Read moreRead less