Questions tagged [markets]
A market is an institutional arrangement in which buyers and sellers exchange goods, services, or information in transactions with or without money.
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What, quantitatively, is the problem with treating two conceptually nearby trading indicators as independent pieces of evidence?
Suppose you come across a financial trading system which starts by checking a security's 200-Period Moving Average, either by itself or in conjunction with the security's price data, perhaps signaling ...
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In the real world, who raises the price in a free market?
If I have a market for smartphones let's say and demand for this good increases then this would create a shortage ceteris paribus and as a response the price would rise, right? But who actually raises ...
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Why does the Rocket Internet purposefully avoid the market of China?
I am studying a very interesting entrepreneurial case: Rocket Internet, and one thing that confuses me is that they do business outside the U.S.A. and China.
“We identify and build proven Internet ...
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Is there any evidence for tragedy of the commons or is it all actually the tragedy of private ownership?
The tragedy of the commons is sold as the idea that common property is over used, and thus arguments are made that there should be regulations over the commons, or it should be owned privately, ...
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What functionality AI expert system what has functionality of ´businessmen´ would have?
Economy experts!
If you imagine a machine learning / expert system project, or something similar, what goal is to create a system what would perform the same task as a ´businessmen´ in market economy, ...
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What happens if the volatility in the equity market increases? Does interest rates move up or down?
I think both can happen and here is my reasoning. Please correct me if I am wrong.
During times of increased volatility in the equity market, investors adopt a more risk-averse approach and gravitate ...
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Can a business's search for profits be considered as movement in state space?
When businesses make decisions to increase profits, they have to adjust several "parameters" of the business such as quantity to output, pricing, choosing a production mix, brand positioning,...
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Competitive Equilibrium how to determine subject to functions
Consider a 1-commodity, 2-consumers, 2-periods economy with
S = 2, J = 1. The asset pays one unit (of the commodity) in state 1 and 2
units in state 2. q denotes the price of the asset at time 0. The ...
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Do market volatility and optimal trade confirmation strength correlate?
In this video, it is suggested that in high volatility markets, trading algorithms which wait for more confirmation to buy perform better than trading algorithms which buy more quickly, while in low ...
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Do banks influence each other's decisions to issue bonds, via a dependency graph?
This questions is about how to model the growth of a bond market. Consider a large set of banks, such as HSBC, BNP Paribas, etc, that can enter into syndication (i.e. join together in small groups) to ...
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Profit Maximizing with a competitive fringe
I have this question:
Your business is the dominant firm but there exists a competitive fringe.
The competitive fringe produces with total cost: $\; c_𝑓(q_f) = 3𝑞_f$.
There have also been some ...
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Austrian vs Neoclassical arguments for a market economy
I read through this article, and the phrase "least-worst alternative" sparked a train of thought, which I would like some insights on.
To me, it seems like one of the key differences between ...
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What are the consequences of the invisible hand?
I am currently reading The Wealth of Nations, and it is noticeable that the concept of the "invisible hand" appears only once in the whole book, and where it does appear, there is little in ...
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Optimization Model for Market Clearing using Uniform Pricing
Dear all, can someone please share a simple example for market clearing via Uniform Pricing using an Optimization Model?
I am trying to simulate a market using bid values with quantity and price, from ...
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What is the best survey or analysis of products or services in demand in an economy at the moment?
Is there a thinktank, survey or publication that is considered a gold standard in analyzing what jobs, skills, services, commodities, or resources are or would be most in demand in a given economy, ...
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Industry-specific control variables
I am writing about bank-lending to a specific industry and how that could be affected by the level of carbon intensity of a given industry within the EU. I have some thoughts on this:
Trying to think ...
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Monopoly markets
A monopoly can produce any output level at a constant marginal (and average) cost of θ per unit. Assume the monopoly sells its goods in two markets separated by some distance.
The demand curve in the ...
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Why does Taiwan dominate the semiconductors market?
The recent visit of US politician Nancy Pelosi to Taiwan generated a lot of news about the dependence the world has on Taiwan, given its dominance of the semiconductor market.
But I couldn't find ...
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Can a supermarket be viewed as a marketmaker (like market makers that operate on the financial markets)?
Marketmakers are traders who set the price on a financial market, because they have an obligation to buy.
Can a supermarket be viewed as a marketmaker (like market makers that operate on the financial ...
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Violation of the zero-profit condition
Suppose a perfectly competitive firm has cost function $C(q) = 40 + 0.5q + 0.05q^2$. If the market price is $p = 8$, the profit made is maximized at $MR = MC \implies 8 = 0.5 + 0.1q \implies q^{*} = ...
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Perfect competition allocations
Suppose the market demand is $P(Q) = \alpha - \beta(Q)$ where $Q = \sum q_1$. Variable $q_i$ denotes the output of the $i$th firm and $Q$ is the total output. The marginal cost for each firm is $c$.
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Economic Recession
Recession is expected to hit the world, according to recent news reports. I wanted to know why the recession is approaching because I'm new to this area. What are the main elements causing it?
Even ...
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How can we explain quantity competition and price taking?
Note: This is a question on the didactics of microeconomics, directed to those of you who have some experience teaching this subject.
When I studied the basic principles of microeconomics, a price-...
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Why is the spot price of electricity determined by the highest price that gets offered? Can't they scale it according to the actually offered prices?
most energy markets work using "spot markets", where everyone puts in an offer for how much electricity they can provide and at what price, and then everyone gets paid the highest price ...
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How are stock prices determined in the following cases?
I looked at this question already. I know there is an order book with bid and ask and that the price is updated when a match occurs. But I have two questions:
What happens when the bid is higher than ...
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Why does Metro (AG) not allow to shop for everyone?
Why does the Metro wholesale allow to shop only for business persons and not to everyone? Do they have some limitations from anyone and why? They will make more money if everyone could shop there.
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Net Surplus and first party products calculation on digital platform
I was reading the book "The Economics of Platforms: Concepts and Strategy" by Paul Belleflamme and I was confused about the solution of the seller and buyer surplus equation on page 132. The ...
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Impact of contractionary monetary policy and IS-LM curve shifts
Using the IS-LM diagram, show the impact of a contractionary monetary policy for a country when:
(a) it does not affect expectations about future interest rates and output
(b) it affects expectations ...
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Does a free market economy sustain a greater variety of business models in any given industry?
I have a mere hunch that in a free market economy, a greater variety of business models can be supported or sustained in each industry, when compared to a more centrally planned economy. However, I ...
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Literature recommendation on market microstructure (real estate, car, etc.)
I am very interested in secondary-market-related research topics. Especially, from the micro-level, e.g., starting from the utility function of consumers. I want to understand how to model rational ...
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How can I compare surplus in monopolistic competition to surplus in monopoly?
Is there any way to compare the total surplus and consumer/producer surplus in monopolistic competition with that of perfect competition or monopoly?
All I can come up with is the idea that deadweight ...
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Will there always be excess profit in the Cournot model equilibrium/monopoly
So I'm studying market structures for the end of term, and I'm a bit confused about excess profits.
From what I can see, excess profits occur when the demand curve intersects the AC curve - the MR=MC ...
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How is trending coins or stocks calculated? What is the formula or metric used to define "top 10 trending coins or stocks today"?
We can see the top 10 trending coins today in Coinmarketcap, Coingecko, etc. The same goes for stocks. So, how is it calculated? They're obviously taking multiple factors into consideration - total ...
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Sum of LS-LMSR probabilities is greater than 1
I am trying to implement LS-LMSR in a prediction market with binary outcomes: YES and NO. I am implementing this formula as the cost:
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Market clearing price for a single good with two consumers with different utilities
Say I have a single indivisible good that is randomly allocated to one of two consumers. The first consumer's utility for the good is \$5 and the second consumer's utility for it is $10.
If the good ...
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Auction mechanism with quoters and price takers
Consider a market with one buyer with a fixed demand and multiple sellers for a divisible good. The goal of the market is to determine a uniform unit-price for the good as well as which seller ...
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Is There Literature on Individual Demand Cap (in Housing Market)?
Some (obv. very left) politicians in germany propose to impose that owning housing should be capped at what a person does use him/herself. That is, you should not be allowed to own housing for ...
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Black Market Resilience
In many countries drugs like marijuana are being increasingly legalized or at least decriminalized. In such circumstances, you would expect the previously illegal or bootleg marijuana producers to ...
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Is there a “runaway” threshold for Debt-to-GDP Ratio in the U.S.?
Last year, when Congress was debating the stimulus/relief packages, one Senator made a comment about the debt-to-GDP ratio and how we are approaching a point in that ratio that will have some major ...
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What is the relation between "Capital Market Line" and "Capital Asset Pricing Model (CAPM)"?
I asked this question on Personal Finance and Money but was asked to ask it here.
On the Coursera course Portfolio and Risk Management, on Week 2, I am having trouble finding the link between the ...
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Fall in price of sugar affects price and quantity of candy [closed]
Using the supply and demand model, explain and illustrate how the price and quantity of candy would be affected by sugar prices dropping, starting from the equilibrium point.
Am I right in stating ...
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Theoretical models of copyright infringement and efficiency implications
I wanted to know if there are theoretical models of copyright infringement and what are their implications for efficiency in the market and also, if possible, any empirical support they have.
When I ...
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Does stronger regulation of economic activity impede economic growth in constitutional democracies with basic constitutional rights?
Given similar democratic constitutions and basic constitutional rights such as property rights, freedom of speech, freedom of press etc and the definition of regulation according to OECD:
Regulation ...
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How did Cowen and Tabarrok calculate the probability of Hewlett-Packard sales?
The discussion on prediction markets in the chapter on the price system in Tyler Cowen and Alex Tabarrok's Modern Principles of Economics, Second Edition (pp. 123-124) contains the following ...
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Order-driven vs quote-driven markets
What is the difference between order driven and quote driven markets? Is there any theoretical microstructure book that gives the intuition behind the types of markets with respect to the orders that ...
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Non monotonic supply curve
Supply curves are usually non decreasing. For example in a electricity market, providing more capacity means turning on new production units with higher costs, see e.g. the following representation:
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How elastic are markets with regards to unethical companies? [closed]
Do markets respond by naturally boycotting unethical companies? For example, if an American company makes its products using Uyghur labor, can we trust their customers and would-be customers to ...
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European Commission getting rid of excess carbon emission permits
According to this Economist article,
For a long time after it was launched in 2005, the [European Trading System] barely functioned; a glut of allowances (which give the holder the right to emit an ...
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Cryptocurrencies: Is it possible to estimate price from market cap?
I'm looking at a website that figures out the potential price of a coin if it had a certain market cap.
I'm not sure I understand the underlying calculations though.
It's well established that: ...
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Understanding Vernon Smith's 1962 "An Experimental Study of Competitive Market Behavior"
Vernon Smith's 1962 paper "An Experimental Study of Competitive Market Behavior" simulates a market using students (who have piece of paper giving their reservation prices). In one of the ...
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