My
honours thesis,
written at the University of Sydney in 2018.
The first chapter explores the Diamond paradox: that when consumers have to pay a cost to search different stores to discover their prices, no matter how small the cost (as long as it is above zero), the prevailing market price necessarily is the price that a monopolist would charge. By introducing repeat customers, I show that a price below the monopoly price can also prevail as the equilibrium outcome.
The second chapter dispenses with the usual assumption in economics that property rights can be enforced without cost, and proves some results about the degree to which people will fund security to protect their property rights, and the profitability of expropriating others.
