This paper explores possible reasons for the long and enduring dominance of neoclassical theory over the undergraduate microeconomics textbook. It proposes that those very attributes of neoclassical microeconomics that raise serious theoretical misgivings constitute the basis for the current hegemony of the standard undergraduate textbook. It further discusses the effects of the standard text on the education of economists in developing countries and conditions of the entrenchment of this text in undergraduate teaching. Finally, it looks at the possibilities of the emergence of alternative textbooks both in the centre and in the periphery of the global academic map.

This paper explores possible reasons for the long and enduring dominance of neoclassical theory over the undergraduate microeconomics textbook. It proposes that those very attributes of neoclassical microeconomics that raise serious theoretical misgivings constitute the basis for the current hegemony of the standard undergraduate textbook. It further discusses the effects of the standard text on the education of economists in developing countries and conditions of the entrenchment of this text in undergraduate teaching. Finally, it looks at the possibilities of the emergence of alternative textbooks both in the centre and in the periphery of the global academic map.

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This thesis groups three papers in applied microeconomic theory that focus on political economy and the economics of organisations. The first chapter studies the equilibrium outcomes of a dynamic game of electoral competition between two policy-motivated parties. I model incumbent policy persistence: parties commit to implement a policy for their full tenure in office, and hence in any election only the opposition party is free to choose a new platform. The model gives rise to novel equilibrium policy dynamics: governments alternate in power; parties compromise, that is, starting from differentiated ideological positions, they gradually move towards proposing platforms which resemble one another; however, they never capitulate, that is, party labels matter and parties maintain distinct policy goals. The second chapter studies a directed search model of competition between sellers that control the quality of buyers' private information about goods. As better informed buyers extract more informational rents from trade, sellers may try to attract buyers by offering better information. First, I establish how the characteristics of exogenously fixed sale mechanisms determine equilibrium information provision. Information provision is higher under competition than under monopoly, yet partial information is provided for many sale mechanisms. Second, when sellers commit to both information provision and mechanisms, I identify simple conditions under which every equilibrium has full information. In these equilibria, sellers capture the efficiency gains of information provision and compete only over non-distortionary rents offered to buyers. Retaining the option to develop a currently inactive project often requires maintaining specialised stocks of knowledge. However, standard models of experimentation treat the choice of one project over another as entailing only an implicit opportunity cost. In the third chapter, I characterise the optimal experimentation policy in a model in which undeveloped projects have explicit maintenance costs and can be irreversibly discarded. Projects which in the absence of maintenance costs would be developed only after more promising projects fail are sometimes developed first and then discarded early. Maintenance costs alter optimal project development by providing incentives to bring the option value of less promising projects forward.

This thesis groups three papers in applied microeconomic theory that focus on political economy and the economics of organisations. The first chapter studies the equilibrium outcomes of a dynamic game of electoral competition between two policy-motivated parties. I model incumbent policy persistence: parties commit to implement a policy for their full tenure in office, and hence in any election only the opposition party is free to choose a new platform. The model gives rise to novel equilibrium policy dynamics: governments alternate in power; parties compromise, that is, starting from differentiated ideological positions, they gradually move towards proposing platforms which resemble one another; however, they never capitulate, that is, party labels matter and parties maintain distinct policy goals. The second chapter studies a directed search model of competition between sellers that control the quality of buyers' private information about goods. As better informed buyers extract more informational rents from trade, sellers may try to attract buyers by offering better information. First, I establish how the characteristics of exogenously fixed sale mechanisms determine equilibrium information provision. Information provision is higher under competition than under monopoly, yet partial information is provided for many sale mechanisms. Second, when sellers commit to both information provision and mechanisms, I identify simple conditions under which every equilibrium has full information. In these equilibria, sellers capture the efficiency gains of information provision and compete only over non-distortionary rents offered to buyers. Retaining the option to develop a currently inactive project often requires maintaining specialised stocks of knowledge. However, standard models of experimentation treat the choice of one project over another as entailing only an implicit opportunity cost. In the third chapter, I characterise the optimal experimentation policy in a model in which undeveloped projects have explicit maintenance costs and can be irreversibly discarded. Projects which in the absence of maintenance costs would be developed only after more promising projects fail are sometimes developed first and then discarded early. Maintenance costs alter optimal project development by providing incentives to bring the option value of less promising projects forward.

With the development of electronic commerce and online group-buying, many studies tried to explore theories about online group-buying. Following the recent development of online group-buying, this research tries to provide a comprehensive framework to study online group-buying by proposing five different dimensions as a basis to develop various group-buying models. The five dimensions are initiator, price variety, bargain power, reservation price, and number of negotiators. The developed group-buying models are categorized into two categories, negotiating price before forming coaliation and negotiation price after forming coaliation. In addition, we also tried to analyze online group-buying model or behavior based on microeconomic theory. Hopefully, it can open a new research area in online group-buying models.

Magister Economicae - MEcon / The paper is a microeconomic analysis of household saving that specifically looks at whether informal saving should be formalised, the costs and benefits to formalising, what has been done and how this may be improved. A microeconomic study in respect of a developing country like South Africa is crucial, rather than blindly adopting the studies of developed countries. This is necessary for a developing country’s households as they have vastly different demographic structures, where most households are likely to be large and poor (Deaton, 1989: 61) and where money is earned from the sale of agricultural produce or low wages and income generated from informal enterprises and services.The Income and Expenditure Survey data of South African households is used in this paper to analyse the behaviour of poor households. The households are divided into 10 quintiles; each quintile represents 10 percent of all households in terms of per capita income. The poorest household is represented in the first quintile and the richest in the tenth quintile.The results of the Income and Expenditure Survey indicate that the poor are concentrated amongst blacks, females, and those living in rural areas. They also have the lowest educational level whereas the larger households are found here. Furthermore, the poor tend to spend more of their income on health, food, education and cultural activities. However, the savings of the poor is lower than the savings of the higher income categories. What is of concern is that the poor do actually save but their saving methods are less likely to be recorded formally. They often prefer the easy access and convenience of informal savings as compared to deposit and credit facilities of formal financial institutions which are difficult to access (Sukhdeve, 2008: 34). However,informal savings carry significant risk for the poor households and barely contribute to GDP. The paper then looks at initiatives to improve the savings of the poor. Enhanced methods to save,accessibility of savings facilities, the reliability of these facilities and convenience will be investigated. These seem to be essential for the accumulation of cash in the long run.

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