Randomized quasi-Monte Carlo methods in pricing securities

Today quasi-Monte Carlo methods are used successfully in computational finance and economics as an alternative to the Monte Carlo method. One drawback of these methods, however, is the lack of a practical way of error estimation. To address this issue several researchers introduced the so-called randomized quasi-Monte Carlo methods in the last decade. In this paper we will present a survey of randomized quasi-Monte Carlo methods, and compare their efficiencies with the efficiency of the Monte Carlo method in pricing certain securities. We will also investigate the effects of Box–Muller and inverse transformation techniques when they are applied to low-discrepancy sequences.     

Vertical Integration and Competition Policy

Vertical integration can be a source of significant strategic advantage for firms, whether in the form of backward integration to gain security of some important supply or of forward integration to ensure adequate distribution of products or services. It may have profound effects on the competitive processes in an industry, substantially modify the threats from new entrants or substitute products, and mitigate the power of suppliers or buyers. Yet for exactly these reasons, vertical integration causes great concern to competition authorities. A number of consumer products markets with vertical ties have caused such disquiet to the UK's Office of Fair Trading (OFT) in recent years that they have been referred to the Monopolies and Mergers Commission (MMC) for further investigation. These include beer, petrol and soft drinks. The three cases illustrate the nature and importance of the strategic advantage derived from vertical integration. They also illustrate the concern competition authorities feel about vertical integration, and provide lessons for firms regarding the objections that may be raised towards their trading arrangements.     

Strategies for understanding and changing local revenue policies and practices in Ghana's decentralization programme

The 1971 Local Administration Act is the basis for Ghana's attempt to decentralize development planning and budgeting from the centre in Accra to the 68 districts of Ghana. The Act allows District Councils to collect numerous revenues and to retain them as a financial base for implementing District development projects. In 1977 the Economic and Rural Development Management training programme was initiated to help improve revenue collection and the development planning and budgeting capacity of elected officials and civil servants at the district level. Participants worked in teams to determine the potential district revenue base for decentralized development planning, to understand local behavioural patterns in the revenue collection process, and to recommend procedures for improving district revenue administration. The training programme has resulted in dramatic improvements in district government revenue policies and practices leading to a larger financial base for the funding of projects identified and designed locally. Data indicating the positive impact of the training programme for improving local revenue are provided for Techiman District.     

PROBLEMS OF CHANGE IN AUSTRALIAN AGRICULTURAL ECONOMICS

There has been a low level of methodological controversy within the Australian agricultural economics profession. Johnson's 1963 paper is the most significant and in it he passed criticisms on agricultural production economists not unlike those currently being made by political economists of economics in general. These past criticisms have in the main been ignored by the Australian profession but it is suggested that they are now being pushed with renewed vigour and they can no longer be ignored. It is argued that our policy work has by and large been successful and effective except for significant areas where our methodology was of restricted usefulness. In farm management the Johnsonian strictures would seem to apply but a more charitable interpretation is provided which should meet the approval of the political economists. Our almost complete neglect of development economics must soon draw to an end and we will find that the methodologies which we have relied on heavily and fairly successfully must be augmented as we become more involved in this field. The political economics challenge should be recognized and accepted with relish because the nature of our work is changing and will continue to change in the future. We have adapted fairly well as adjustment and equity have become major policy concerns. Meeting the political economics challenge will help this process of adaptation.