We discuss the pricing of a superior good based on its 'signalling value'. Our model and analysis offer a different explanation of why in China and some other Asian countries the prices of luxury goods are extremely expensive when they are first marketed, then fall dramatically and...

In this paper we consider the problem of specialization and trade for large economies with a continuum of ex ante identical individuals and with a finite number of goods. Different from the classical treatment, we adopt a game theoretical approach. Therefore in our models the prices of traded...

We employ a general macroeconomic analysis to describe the economic growth and performance of the Special Economic Zone (SEZ). It is shown that not only does foreign investment make a significant contribution to the economic growth of the Zone, but also, the rapid response of foreign investment...

In this paper we discuss finite economies with the presence of transaction costs and with decreasing, constant or increasing returns. In general such an economy may have no general equilibrium existence and may even have an empty core. We analyse the trading networks of such an economy,...

In this paper, the authors compare the behaviours of a sales revenue maximizer with that of a profit maximizer in their response to an increase of the per unit production cost or a per unit tax being imposed. A common mistake in currently used textbooks is pointed out, and a new proposition is...

This paper develops a general equilibrium model to consider the effects of corruption caused by institutionalized privilege on economic welfare, the network size of division of labour and productivity. First a Walrasian equilibrium in a market economy is computed; then we consider the effects on...

In this paper we present a model based on the auction theory for community properties and its possible application to China's economic reforms. We derive the Nash bidding rule for the first price sealed-bid auction of a community-owned object, and compare it with the bidding rule for auctions of...

Using a price vector and a conjecture about a population's activities, this paper suggests that a mixed Nash-Walrasian equilibrium (NWE) occurs if, when every individual maximizes her utility under her conjecture, the trading markets and the theft 'markets' are all cleared. Thus, in our model...