This paper investigates the optimality of sharp incentives in contracts where output prices are set at the time of contracting but are random in nature. It shows that when prices are specified with error, schemes involv- ing sharp incentives might result in substantial deviations from first-best...

Production functions that take into account uncertainty can be empirically estimated by taking a state contingent view of the world. Where there is no a priori information to allocate data amongst a small number of states, the estimation may be carried out with finite mixtures model. The...

‘Risk’ has become a central theme in 21st-century policy thinking. The fact that individuals and families are vulnerable to a wide range of social, economic and other risks, and that collective action is needed to help reduce and manage these risks, has long been important in social...

This note gives a simple, but useful characterization of optimism and pessimism represented by a convex and concave shift of probability weighting functions, and applies it to two comparative static analysis.

The pattern of boom and bust that characterised the Australian economy from the early 1970s to the early 1990s currently seem to be a thing of the past as Australia enters its sixteenth year of uninterrupted expansion. The expansion has lasted twice as long as those of the 1970s and 1980s, which...

We formulate a dynamic framework for an individual decision-maker within which discovery of previously unconsidered propositions is possible. Using a standard game-theoretic representation of the state space as a tree structure generated by the actions of agents (including acts of nature), we...

Australia is the world's driest continent and the intensity of conflict over water and water management has been increasing , especially in rural areas. By focussing on the recent federalist compact, National Wa ter Initiative (NWI), we explore the use of market and property rights instruments...

High population pressure and the rapid pace of human activity including urbanization, industrialization and other economic activities have led to a dwindling supply of arable land per capita and a process of agricultural intensification in South Asia. While this process has significantly...

In a stochastic decision environment, differences in information can lead rational decision makers facing the same stochastic technology and the same markets to make different production choices. Efficiency and productivity measurement in such a setting can be seriously and systematically biased...

The paper begins with a schematic survey of the historical background, which provides the context for the changes embodied in WorkChoices, briefly described in Section 2. The core of the paper, Section 3, examines the role of choice and constraint in the design of the reforms. This analysis is...