Balassa and Samuelson showed that as we move towards richer countries the measured price level becomes higher. Their proposed explanation was to appeal to the presence of a service element in most goods. In this thesis, I begin by introducing an exploring of an alternative candidate explanation for the B-S relationship. This explanation is based on an appeal to mismeasured quality. In the model developed in Chapter 2, the well-known difficulties surrounding the problem of making a full and appropriate adjustment for differing quality levels will mean that when the average quality level consumed is higher in richer countries, this will showup in the data as spurious difference in price levels, which will imply the B-S relationship. More interestingly, it also leads to a second testable prediction that is not a prediction of the classic B-S explanation. This second prediction is tested directly at the end of Chapter 2. In testing this prediction, we are led naturally to explore the foundation of the B-S relationship at a disaggregate level. In Chapter 3, we take a purely statistical approach in asking the question: what is the best statistical description of wealth versus price level relationship for individual products? We arrive at a characterization of the best statistical description which suggests a natural way of ordering products relative to the form of this relationship. A striking pattern emerges, according to which products at the one end of the spectrum are almost all manufactured goods (designated the ‘M-group’), while products at the other end of the spectrum are almost all pure services (designated the ‘S-group’). In Chapter 4 and 5, we return to theory. We propose a separate model for the S-group in Chapter 4. In Chapter 5 we return to the analysis of Chapter 2, but now we apply the analysis to the M-group only. Chapter 6 is devoted to exploring the macroeconomic implications of the B-S relationship. The key idea is that a (fast) growing economy will exhibit a (substantial) temporary episode of inflation, as measured by conventional price indices.

The dissertation consists of four chapters. The first two chapters are devoted to exploring information acquisition and disclosure in contests. The third chapter is devoted to exploring how risk attitude affects bidding behaviour in all-pay auctions. the last chapter is denoted to exploring behavioural biases in advice-giving. In Chapter 1, I study player's incentive to spy on opponents' private information in contests. I show that each player's equilibrium effort is non-decreasing (non-increasing) in the posterior probability that the opponent has the same (a different) valuation. Accounting for the cost of spying, players are strictly better off than not spying on each other at all. In Chapter 2, I focus on how a contest organiser should disclose information in order to achieve certain objectives. In particular, I compare private signals with public signals. I show that there is no general ranking of the two signals in terms of the performance of maximizing players' expected payoff, but public signals outperforms private signals in maximizing expected effort. In Chapter 3 (co-authors with David Ong and Ella Segev), we extend previous theoretical work on n-players complete information all-pay auction to incorporate heterogeneous risk and loss averse utility functions. We provide sufficient and necessary conditions for the existence of equlibria with a given set of active players with any strictly increasing utility functions and characterize the players' equilibrium mixed strategies. Finally, in Chapter 4 (co-authored with Tobias Gesche), we show experimental evidence that a one-ff incentive to bias advice has a persistent effect on advisers' own actions and their future recommendations.

This thesis contains three essays on asset pricing. The first chapter examines how introducing an options market affects the liquidity and expected returns of underlying assets when the economy features asymmetric information. I show that introducing derivatives can have opposite effects on underlying asset prices: doing so increases (resp., reduces) prices when the market has relatively more liquidity suppliers (resp., liquidity demanders). Thus the non-monotonic effects of derivatives on underlying assets could reconcile the mixed empirical evidence on options listing effects. Introducing derivatives reduces the price impact of liquidity demanders’ trades on the underlying risky asset but has no effect on its price reversal dynamics. In the second chapter, I solve for the equilibrium of a pure-exchange Lucas economy under jump diffusion and populated by one unconstrained agent and one VaR agent in closed form. First, I show that the VaR constraint can generate excess market volatility and the inclusion of the jump component amplifies this effect, which provides a new mechanism to explain the prevalent smirk pattern of Black-Scholes implied volatility in options markets. Second, the VaR constraint pushes up the jump risk premium. Finally, the VaR constraint can generate a decline in the zero coupon bond yields at the VaR horizon, which is consistent with a flight to safety phenomenon taking place during a crisis. The third chapter, co-authored with Chunbo Liu and Zhiping Zhou, documents a positive relationship between funding liquidity and market liquidity in the options market. Further analysis reveals that the positive relationship is mainly driven by short-term and deep out-of-the-money options. Furthermore, liquidity of puts is more sensitive to changes in funding liquidity. In addition, this paper finds a positive relationship between the options market liquidity and VIX, which is in contrast to the negative relationship documented in the equity market.

Commodity prices have been more volatile in recent years. The volatility of prices widely impacts throughout the majority of stakeholder in commodity supply chains. Natural Rubber (NR) is one of the main exporting commodities in Thailand where millions of small farmers rely mainly on the NR producing to generate income for their living and children’s education. The existing literature relevant to commodity Price Risk Management (PRM) is dominated by developed countries in which markets have well-developed infrastructures. Although some research has been conducted in developing countries, most of it focuses on farmers or exporters whilst intermediaries who play a vital role as a middle tier in the supply chain are absent. In NR supply chains, the intermediaries are likely to be the ones who are exposed to the highest risk from price volatility. Their profit margins have diminished due to increasing market power of farmers and their greater accessibility to price information via the internet and mobile phone. Therefore, when NR prices become more fluctuated, the impact on Rubber Business Intermediary (RBI) businesses is even higher than beforehand. This research aims to explore the PRM strategies adopted, and to understand the PRM practiced by RBIs when it comes to managing their business in the south of Thailand. A qualitative method is used as a research approach in this study. 24 RBIs in seven provinces, including the three biggest NR producing provinces in Thailand, were targetted using semi-structured interview and pre-interview questionnaire methods. The interview data was analysed using the template analysis method and NVivo computer software. The findings highlight that the PRM strategies involved in the practices of RBIs are fragmented. This is due to the nature of the uncertainty in business circumstance, and the variety of the RBI’s personal profiles. The PRM strategies adopted by different types of RBIs are varied, as there are various supply chain structures. Moreover, there are even differences in their use amongst the same type of RBIs. This is mainly caused by the diversity in resources and PRM capability on the part of the RBIs. Furthermore, this research also reveals the lack of the advanced PRM tools in the industry for RBIs. They rely mainly upon informal methods provided by their business partners. It is worth noting that these tools, such as a forward contract, are selectively provided to RBIs depending on their relationships and market powers. The accessibility to available PRM tools has a strong linkage to PRM strategies adopted by RBIs. Eventually, adopted PRM strategies incorporated with decisions in risk taking and market channel selection help to determine their business performance. The research concludes by proposing a conceptual model of PRM in practice that is considered to be original and contributes to the industries involved with high-volume and low-margin trading. This research also has implications to novice or existing RBIs, other stakeholders in NR supply chains, such as producers or processors, and policymakers who require more understanding in PRM in practice.

This thesis investigates whether using agricultural biodiversity, smallholder farmers are closer to having a sustainable livelihood as compared to when they depend on promises made by Alternative Trade Organizations (ATOs) such as Fairtrade. The framework within accounting for biodiversity has not considered the loss in biodiversity and the potential role played by agricultural biodiversity in providing sustainable livelihoods. Further, studies about Fairtrade’s accountability have focused on the household when there is a need to investigate the accountability of Fairtrade at the co-operative level since the Fairtrade system mostly works with co-operatives of farmers. The main research questions of this thesis are: What does a sustainable livelihood in the coffee supply chain entail at the level of a co-operative? Does Fairtrade deliver on its promise of providing a sustainable livelihood at the level of a coffee producer co-operative? Whether and how agricultural biodiversity would affect the livelihoods of a co-operative of coffee farmers? A dialectic/historical materialist methodology is used in combination with multiple methods for a case study of a coffee co-operative in India. A theoretical framework was developed that incorporates the labour theory of value along with the science of agroecology to detail the challenges to the achievement of sustainable livelihoods. Fairtrade fails to deliver sustainable livelihoods at the level of the coffee co-operative. Agricultural biodiversity using an agroecological approach supports sustainable livelihoods to the extent of reducing the dependence on external inputs but challenges remain due to a continued dependence on corporate value chains. This thesis contributes to the literature in accounting by introducing the concept of sustainable livelihoods as a means to check the accountability of NGOs such as Fairtrade. The focus on agricultural biodiversity extends the field of accounting for biodiversity to incorporate the social and environmental impacts on agriculture.

This thesis examines household consumption behaviour over the life-cycle and the business cycle, using three rich Mexican datasets and several microeconometric techniques. The three chapters study how consumption is affected by: i) retirement; ii) intergenerational transfers; and iii) aggregate dynamics. Chapter I investigates the empirical patterns in consumption around retirement using oportunidades dataset, in particular the existence of a ‘retirement-consumption puzzle’ among older households in Mexico. A detailed analysis of consumption dynamics and patterns in home production allows the chapter to conclude that there is no retirement consumption puzzle, which is consistent with augmented versions of the life-cycle model. In light of these findings, Chapter II estimates the effect of adult child transfers on the household consumption of their elderly parents using the Mexican Health Aging Study (MHAS). The estimates indicate that parents have a positive marginal propensity to consume out of transfers. The results also suggest that parents’ increases in expenditure correlate with permanent transfers rather than temporary transfers. Adding to this line of consumption research, Chapter III exploits the Mexican National Survey of Income and Expenditure (ENIGH) and investigates household consumption growth over the business cycle across income and consumption distributions. Aggregate fluctuations appear to affect household consumption uniformly across the majority of consumption distribution in Mexico. Nevertheless, the evidence also indicates that, compared to the highest income cohort, groups at the very bottom of the consumption and income distributions are more exposed to aggregate dynamics.

By lots of economists and central banks, price stickiness is believed to be the main factor which brings about the non-neutrality of money. Based on the belief, most of the New Keynesian models are developed to feature price stickiness in order to make the real effect of money. Among those, the Calvo pricing has been the most popular framework in featuring the sticky price. This thesis investigates whether the non-neutrality of money is always guaranteed by the Calvo-type price stickiness or not. In particular, the focus lies on the effect of volatility of firms’' optimal prices on the relationship between price stickiness and the non-neutrality of money. Chapter 1 presents the theoretical possibility of the non-relationship between the two phenomenons in such case that repricing firms’' optimal prices are very volatile, and the following two chapters propose more micro-founded endogenous frameworks to deliver the results which support the argument in Chapter 1. It is shown in Chapter 1 that high volatility of reset prices has the same effect as that of lowering the degree of price stickiness and increasing the future discount factor in the standard Calvo framework. Due to the effect, it can be illustrated that the aggregate price level can be flexible even when some firms’ maintain the previous price level if the other repricing firms' prices respond very elastically to monetary shocks. Chapter 2 proposes a model in which repricing firms’ behave as in collusion and exploit the information on aggregate price dynamics by taking the aggregate price as a function of their own price at the process of optimization. It is shown that the colluding firms set much higher prices for monopoly gains against positive monetary shocks, and therefore, the aggregate price level can be very responsive even with price stickiness of the rms. Lastly, Chapter 3 presents the case where firms have no information on other firms' pricing behaviours and have expectations on average reset price with bounded rationality. The model of this chapter demonstrates that the realized level of average reset price of the firms can be much higher than that of the standard model when their expectations are heterogeneous. All the results of the chapters imply that the monetary policy might not be able to have the real effect even with price stickiness if firms’ reset prices show very volatile movements. Therefore, economists and central banks should research more on the volatility of firms' reset prices when analysing monetary policy and also try to find other factors which might have direct relationship with the rigidity of aggregate price, rather than price stickiness which focuses just on individual prices, when developing a monetary model.

The study of corporate risk disclosure is an emerging area and the work that has been done to date focuses on largely developed markets. This study aims to address the gap in the current disclosure literature by examining risk disclosure in an emerging market (the UAE). The study aims to extend our understanding of risk disclosure practice and determinants. The study interprets the subject matter of risk disclosure in the light of certain disclosure theories. The research methodology design uses a mixed method approach. The first methodology was qualitative method through semi-structured interviews with 22 people. The grounded theory approach was applied in order to analyse the interviews. The second method was a quantitative approach based on content analysis and regression analysis for 48 non-financial companies over three years (2007, 2008 and 2009). The study found that there was considerable variation in risk disclosure level by UAE listed companies. The findings suggested that the companies' managers do not provide a full picture of companies' risks suggesting enhancement of regulation with more detailed rules and requirements on risk disclosure. The research found that IFRS risk disclosure requirements have an important influence on the risk disclosure level especially financial risks. The results show that there is a positive association between risk disclosure and firm size and auditor type. The findings suggest mixed results on the association between risk disclosure and company performance, liquidity, risk level and industry type. The results confirm that risk disclosure is positively correlated with the presence of audit committee, reporting the internal control system and risk management system, whereas there was a negative association with duality. The results show that ownership structure has significant influence on the risk disclosure level. There were mixed results on the association between risk disclosure level and board size, non-executive and independent directors. The analysis of the research would be in the interests of shareholders, regulators, accounting setters, managers and stakeholders who focus on disclosure and corporate governance.

This dissertation studies the intersection between the sharing of individual specific risks and business cycle risks. Individual specific or idiosyncratic risk sharing is typically hampered by moral hazard, and in Chapter 2 we propose a new theory of debt finance as an effective mechanism for sharing idiosyncratic risks. But business cycle or systemic risk sharing is also affected by the means of idiosyncratic risk sharing. Departures from full systemic risk sharing can dampen the incentive compatibility constraint allowing a greater degree of idiosyncratic risk sharing (Chapter 1). Entrepreneurs’ productive risk can quickly transform into low employment, as wages fall below marginal revenue products of labour (Chapter 3). Market prices for systemic risk insurance do not necessarily internalise balance sheet externalities, resulting in excessive swings in leverage and factor market wedges of inefficiency (Chap- ter 4). Sometimes, agents have private information about the risks faced by their projects, and how they correlate with the broader economy. When this is the case, optimal systemic risk sharing arrangements must allocate business systemic risk in a way that deters entrepreneurs from herding among their peers (Chapter 5).

This monograph examines the – at times, seemingly irrational – decision-making behaviour of entrepreneurs in the East African agricultural market. It seeks to reconcile empirical observations made between 2011 and 2014 in the towns of Oyam and Kapchorwa, two communities with centuries of entirely separate agricultural history, with a larger decision-making framework. Drawing on decision sciences, development economics, and other literatures, various theoretical frameworks are explored to explain the domain-specific decision-making observed in Uganda. First, two largely rational, cost-focused decision-making scenarios are described, with the context and domain-specific boundaries of each described. Next, a third, economically sub-optimal decision-making scenario is described, with the factors distinguishing it from the first two explained. In other words, the agricultural entrepreneurs behave as econs1 (exhibiting the anticipated behaviour) in the first two instances, but exhibit System 1 thinking2 (demonstrating unexpected behaviour) in the final instance. A comprehensive discussion reconciles the seemingly-conflicting empirical observations by segregating them by context and arguing the two decision-making systems employed, while contradictory, can and do co-exist as domain-specific approaches.