RENT DISSIPATION AND THE SOCIAL COST OF PRICE POLICY

This paper uses a general equilibrium-based exchange economy model to examine rent seeking for a price policy. Opposing interests spend resources to influence the government's choice of a price vector. Rents, the willingness to pay for the policy, are determined endogenously from the Nash equilibirum of a non-cooperative game. Numerical simulations explore the degree to which rents are dissipated by wasteful rent seeking. It is found that dissipation, measured as the ratio of rent-seeking costs to rents garnered, can grow without limit, and is greatest when opponents are evenly matched. Dissipation is smallest with widely disparate groups, a result that might help explain the underdissipation that seems to occur in many industries.     

INTEGER PRICING AND BERTRAND-EDGEWORTH OLIGOPOLY WITH STRICTLY CONVEX COSTS: IS IT WORTH MORE THAN A PENNY?

In this paper we analyse the implications of integer pricing for Bertrand Edgeworth oligopoly with strictly convex costs. When price is a continuous variable, there is a generic non-existence of pure-strategy equilibrium. In the case of integer pricing, this is not so. We characterize a set of possible single price equilibria around the competitive price, which if non-empty will constitute the set of single price equilibria if the industry is large enough. Furthermore, we provide an example in which the highest equilibrium price can be arbitrarily far from the competitive price.     

THE SHORT-TERM EFFECT OF DOMESTIC OIL PRICE INCREASES ON THE AUSTRALIAN ECONOMY WITH SPECIAL REFERENCE TO THE AGRICULTURAL SECTOR

The rise in the domestic price of oil products implied by the new import parity pricing policy for domestic crude oil is likely to pose some problems for macroeconomic management. In this paper an attempt has been made to quantify the short-run adjustment problems involved, using the ORANI 78 model of the Australian economy. Results are presented for a range of variables of interest, including macroeconomic variables, industrial and workforce composition and farm incomes. With fixed real wages, farm incomes are projected to decline by between 6 and 8 per cent.     

What happened after Bell spilled the acid?: Telecommunications history: a view through the literature

The article is an extensive review of the literature covering the history of telecommunications, primarily the telephone and telegraph. Much of the history itself is discussed in the process, including the politics of inventions, monopolies and anti-trust pressures, and industry interaction with government. The ignorance of many authors on the actual workings of the telephone is decried, and many sources for gaining an understanding of the technology are indicated.     

A stochastic control approach to buffer stock management in the Taiwan rice market

Buffer stock management of agricultural commodities is an intertemporal optimization problem under uncertainty. Stochastic optimal control techniques are presented as a means of solving this problem and then applied to the problem of farmer income support and price stabilization of the rice market in Taiwan. Deterministic results show that the price variation of a free market solution can be substantially reduced with little favoring of one group over another. Operation of a buffer stock under supply uncertainty is shown to generate greater variability in consumer expenditures and producer income than a free market solution.