Derivative financial instruments are frequently used as a tool for influencing the risk ofentrepreneurial uncertain payoff. To this end, an approximation procedure is developed capable ofcalculating the optimal quantity of derivatives to be used. It is assumed that the entrepreneurial cashflow...

This paper develops a principal-agent model of financial contracting in which optimal contracts resemble a combination of debt and equity. When defaulting on debt, the firm is punished by disruption of external funding. Such contracts however, invite rivals to compete more aggressively to...

This paper deals with the introduction of stock options in an (dy-namically) incomplete securities market.

In this paper we estimate the elasticity of the labour supply to a firm, using data from theHousehold, Income and Labour Dynamics in Australia (HILDA) Survey. Estimation of thiselasticity is of particular interest not only in its own right but also because of its relevance tothe debate about the...

This paper develops a principalagent model of nancial contracting in which optimalcontracts resemble a combination of debt and equity. When defaulting on debt, therm is punished by disruption of external funding. Such contracts however, inviterivals to compete more aggressively to increase the...

The welfare dominance of ad valorem taxes over unit taxes in a single-market Cournot oligopoly is well-known. This article extends the analysis to multi-market oligopoly. Provided all ad valorem taxes are positive, unit costs are constant, firms are active in all considered markets, and a...

We reconsider pay-as-you-go pensions (PAYG) policy in a version of the Diamond(1965) overlapping generations model with an imperfectly competitive financialsector and with a low rate of tax on its profits. PAYG then has two effects on capital:the well-known negative crowding-out effect in...

Instituting an initial round of centralized wage setting before an ultimate round ofdecentralized wage bargaining may raise actually raise employment. A general multiequilibriummodel is presented with strategic complementarities in theimplementation of a new technology through aggregate demand...

This article studies four transform pricing methods in the context of generalequilibrium (GE) framework. The four methods, viz. the Esscher transform, indifferencepricing, the Wang transform, and the standard deviation loading, arepopular among actuarial literature and practice. The transform...

The trend towards Internet self-regulation is driven both by gov-ernments that feel reluctant to invest in direct regulation (because offreedom of speech concerns or high cots of monitoring and enforce-ment) and by the industry that is under the threat of rising publicconcerns over content...