As a result of strong economic growth and an expanding population over the course of the last two decades, China has become one of the world's leading economies and the world's largest energy consumer. Given the importance of China to the world economy, and the essential role that energy plays, it is crucial to understand the energy-related economic challenges faced by China. This thesis investigates four related topics on the economics of energy in China. Topics include (1) the relationship between urbanization and energy efficiency, (2) the cost effect of energy on industrial structure, (3) gasoline price patterns, and (4) the impact of energy abundance on industrial production and trade distribution. The results emphasize the importance of urbanization and open-market policies in determining the energy usage in China, and suggest that energy prices and energy-related regulations are efficient instruments to promote resources reallocation across industries and resources relocation across regions.

This thesis consists of three interrelated chapters on adaptive learning. In each chapter, I investigate the way in which adaptive decision makers/players behave in the long run. In particular, I consider subjective assessment maximizers; each player assigns a subjective assessment to each of his actions based on its past performance and chooses the action which has the highest assessment. They update their assessments adaptively using realized payoffs. I mainly focus on the following three cases; (1) an adaptive decision maker takes into account not only direct payoff information, but also foregone payoff information; (2) adaptive players face a normal form game with strict Nash equilibrium in each of infinitely many periods; and (3) adaptive players face a finitely repeated game in each of infinitely iterated periods. Then I show the conditions under which (1) adaptive decision maker chooses the optimal action, (2) adaptive players end up choosing Nash equilibrium strategies, and (3) adaptive players’ behavioural strategies converge to an agent quantal response equilibrium, which is a quantal response equilibrium for extensive form games.

We consider the concept of coarse correlated equilibrium (CCE) in various contexts; games with quadratic payoff functions (which include Cournot duopoly, public good provision and emission abatement) and a linear duopoly game. For the games with quadratic payoffs we compute the largest feasible total utility in any CCE and show that it is achieved by a CCE involving only two strategy profiles. The improvement over and above the Nash equilibrium payoff is substantial in the various economic examples considered for this class of games. In case of the linear duopoly game, we prove that Nash-centric devices, involving a sunspot structure, are simple symmetric CCE, and any unilateral perturbation from such a structure fails to be an equilibrium.

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This dissertation proposes a simple computerized game to serve as a pure test of backward induction and then tests the game in the laboratory. One of the fundamental assumptions of neoclassical economic theory is that human beings function as fully rational agents who maximize their utility over multidimensional alternatives under economic constraints. However, numerous studies have shown systematic deviation from rational decision making in a laboratory setting. While no single explanation is obvious for this suboptimal behavior, the literature suggests other motivations (besides maximizing utility) may be at play, including reciprocity, trust, reputation, and welfare. The "Race to 21" game we test renders these other-regarding preferences irrelevant; therefore we call it a "pure" test of backward induction. Chapter one introduces the game, as well as tests the effect of adding incentive payments in several places along the path of play. Chapter two continues by analyzing how each different intermediate incentive affects the speed of learning in the game. Chapter three concludes with a look at whether individual differences among laboratory subjects explain some of our experimental results. Common to all chapters is the result that incentive payments offered on the subgame perfect equilibrium path near the midpoint of the game particularly enhance the use of backward induction among subjects.

<p>In this dissertation I present a theory of charitable fund-raising in which it is costly to solicit donors. The second chapter shows how optimizing fund-raisers will affect the equilibrium level of contributions, determine the set of givers, respond to government grants, and behave in the limit in replicator economies. The third chapter characterizes optimal fund-raising when the fund-raiser learns to become a more efficient solicitor through experience. This chapter also introduces a notion of excessive fund-raising and it shows how this is affected by learning.</p> / Dissertation

Theoretical models of the exchange rate are developed where information on the model is not fully available to agents. It is an application of Benjamin Friedman's (1979) theme that full rational expectations may be a possibility only in the long-run, even for completely rational individuals. The thesis attempts to develop the theory of exchange rate behaviour by considering some neglected informational issues. The three substantive chapters each consider specific aspects of relevance to the determination of the exchange rate from an asset market view of perfect capital mobility. These are the possible current account inter-relationship, the persistence of interest rate differentials between the two currencies and the subjectivity of and the regress in beliefs across a decentralised market. Generally, limited information on the model will give rise to erroneous beliefs, on the one hand, and encourage the acquistion of information and the revision of beliefs, on the other. Erroneous beliefs will cause correlations between variables, which may not normally occur inside full rational expectations. The revision of beliefs will bring a particular source of non-stationarity to the data. And the stability of certain learning forms may require limitations on the degree of capital mobility. These conclusions would suggest that any empirical work on modelling the exchange rate may gain from relaxing certain a priori restrictions, which properly belong to models with stronger assumptions on the availability of information.

The thesis contains 5 independent papers together with an introduction and a general conclusion. All five papers consider private information in simple oligopoly models with linear demand and cost functions. The problem to be analysed is the extend to which private information is transmitted between firms and the consequences thereof. In principle the transmission (or dissemination) can take place voluntarily or involuntarily. In the case of voluntary information transmission (or sharing) we assume that this is done honestly. One of the main results in this strand of the literature is that firms have no incentives to share information unless they can collude over strategies. In chapter II and III we show that this conclusion is not generally true. In chapter II we consider the incentive for risk-averse firms to share their private information. We show that the assumption of risk-aversion in some cases reverse the conclusion in the literature. In chapter III we show that there are cases in which private information and the sharing thereof within a collusive arrangement prove detrimental to the size of a stable collusive arrangement. Thus in some cases private information imply a disincentive to collude. Chapter IV and V looks at the effect of uncertainty and private information on a two-stage duopoly model in which firms first choose capacity, then compete over prices. In chapter IV we show that no pure strategy equilibrium exists regardless of whether uncertainty is resolved before or after capacity is chosen. A mixed strategy equilibrium is shown to exist, and the equilibrium is worked out for a specific distribution of the random variable. In chapter V we modify the equilibrium concept by imposing a no-mill-price-undercutting rule. We shown that if firms' capacities differ, the firm with the highest capacity endogeneously sets the higher price. Examples of private-asymmetric information are considered and the main finding from the examples are that there are cases where neither firm wants to share the information of the best informed. Chapter VI which is joint work with Norman J. Ireland considers involuntary information transmission via output plans. This allows us to rationalise positive consistent conjectures in a simple oligopoly model. General for all the models considered is that the results not only differ from those found under certainty, but also that the results are possibly non-robust, especially with regards to changes in information structures and functional forms.

This thesis is concerned with the projection and valuation of the Egyptian social security pension system which represents the first and main pillar in pension provision in Egypt. The system is officially a funded defined benefit one and is managed by two public Funds on behalf of the state. As a result of the pre-funding strategy, the two Funds have been accumulating a large amount of assets, which makes them important institutional investors with certain characteristics. Larger contributions from employees and/or employers or cutting back some benefits cannot be recommended by the system's actuary in the event of an actuarial deficit for many political, economic and social reasons. Actuarial deficits can be dealt with by two methods, the first is higher interest rates on the invested funds from the National Investment Bank (NIB). The second is a transfer from the Treasury to shoulder the actuarial deficit alongside the annual subsidy given to improve the level of benefits. This strategy raises four very important questions. The first is whether the system's expected annual cash flow is sustainable under different demographic and economic scenarios, particularly whether the system will face any cash flow liquidity shortage in the near future. The second is how much the expected annual subsidy will be. The third is what is the required rate of interest on the invested funds to achieve the funding objective of covering 100% of the liabilities. The fourth is whether the current contribution rates are fair and adequate for new entrants at certain ages. In answering these questions a pension projection and valuation model is developed. This involves analysing and modelling the relevant demographic and economic factors in order to project them. It is found that the system will face cash flow deficits unless it liquidates some of its assets over the projection period. It is also found that the current contribution rates are more than enough to cover the cost of new entrants, even with delays in starting work as a result of the high unemployment. It is also found that a moderate rate of interest of around 6-7% per annum with salary growth of around 8-9% per annum can keep the funding level at 100% of the liabilities. Finally, a set of recommendations are made for reforming the system to enable it to survive the changes it faces in an uncertain economic and demographic environment. Some suggestions for further work are also discussed.