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.     

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.     

Economic Mode1ling, Ideology, Politics and Social Research:

In March this year, Peter Dixon became the second Director of the Institute, succeeding Professor Ronald Henderson, In this article, he comments on media reaction to his appointment and gives some views on the future direction of the Institute.