This paper provides a framework for the empirical analysis of the role of uncertain international prices for the Australian economy’s production sector and its international trade. We model the movement of traded goods prices via a bivariate GARCH model and embed this within an expected...

This paper studies the strategic role of extremism within a two-country multi-stage game and shows that, in general, an equilibrium exists in which extremism is used by both rivals. We show that often changes in the environment affect the two countries differently. Specifically, as a country...

It is the purpose of this paper to show that corporation tax may affect industrial structure. Analyzing the effects of corporation tax, we demonstrate that it tends to favour incumbents over entrants. We further show that the effect of this advantage on an incumbent's output depends on his...

The paper provides a model that explains the probability of strikes by the union's use of militancy as a strategic tool in bargaining. Militants are useful because they provide a credible threat, hence enhancing the union's bargaining position. Using a multi-stage bargaining game, we show that,...

The effects of import-price uncertainty on factor income in Switzerland are estimated. The production-theory approach is used to derive the import demand function from an expected utility maximization problem, treating imports as an input to the technology. The model is also used to test for...

In this paper we show that, in the presence of an investment that provides all firms in an industry with positive externalities, a firm may choose an ‘extreme policy’. Specifically, within the context of a locational game, we show that a firm may make a positive profit by locating outside a...

This paper shows that stakeholders' multilateral opportunistic behaviour during financial distress may lead to premature liquidation of the firm. Consequently, the firm will use its capital structure to mitigate the costs of such opportunism. Specifically, the firm will reduce its debt so that...

This paper provides an efficient union-firm bargaining solution within the right to manage framework, by separating efficiency and distribution considerations through bargaining over wage and fringe benefits. We show that without insurance considerations, efficiency is achieved by equating the...

We raise the possibility that at least some of the free trade areas observed in practice are customs unions in disguise. We distinguish between generalized and standard customs unions. While members of the former can choose different external tariff rates, members of the latter levy a common...

This paper analyzes how uncertainty and the timing of its resolution infuence the formation and design of regional trade agreements. Two sources of uncertainty — in demand and costs — are considered. We compare the case in which uncertainty is resolved “early” (before tariffs are...