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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1answer
44 views

A maximization problem with multiple goods and integrated markets

Update: I will try to clarify the question: Let us say that the total harvest of the fish population at time t is $H_t$. Every harvest produce three types of fish: salmon ($f_1$), which is valuable ...
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1answer
26 views

Do barriers to entry increase the (collective) market power of incumbent suppliers?

For example in the case of the labour market lower immigration means that low-skilled labour can ask higher wages or better conditions (other things equal). Low skilled labour may have even put the ...
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Why Hanson's logarithmic scoring rule define an Automated Market Maker?

Why Hanson's logarithmic scoring rule define an Automated Market Maker? We have in this paper in page 47, section automated market maker, that this scoring rule can "easily" be turned into ...
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Link between Automated market makers and Logarithmic scoring rules

In most articles I read about AMMs (automated market makers), there is a link or a mention to Hanson's work about the Logarithmic scoring rule. But I don't clearly see the link between AMM's and the ...
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20 views

Who pays what in reversed auction marketplace

Say I, the auctionner, hold a marketplace that runs reversed auctions for an infinitely divisible good, that is, in a given auction one buyer pays multiple sellers to take in charge parts of the good (...
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1answer
43 views

Why doesn't stock market help to boost the economic growth directly?

For example, during the recession, the central bank often goes to buy financial instruments that are riskier than government bonds (such as corporate bonds)- which is called "quantitative easing&...
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1answer
169 views

What has been the reception of Posner & Weyl’s claim that property rights lead to market power?

Posner & Weyl claim that property rights lead to monopoly rents: Property Is Only Another Name for Monopoly Radical Markets Have their claims been elaborated, tested, or peer-reviewed? In ...
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1answer
21 views

Measurement for the downstream use of a commodity

I am looking to find a measurement that would tell me the size of the market of the downstream use of some particular commodity. For example, salt or wheat would be used by many companies downstream. ...
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3answers
184 views

Increasing returns, implications?

If a firm has increasing returns to scale (i.e., doubling inputs more than doubles output) would that firm logically end up being the sole firm in its sector in the long run? If not, what is the ...
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1answer
51 views

Pareto efficiency of organ markets

Organ sale is legal in Iran. I was wondering: are organ markets Pareto efficient? Or could an argument be made for them being Pareto efficient? I have been thinking that both the buyer and the seller ...
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0answers
53 views

Why do two-sided marketplaces often charge both sides of the transaction?

Why do marketplace apps often charge both sides of the transaction, when charging one side could raise as much (or more) revenue and be simpler? i.e. if the marketplace knows which side of the market ...
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1answer
30 views

The ability of markets and prices to direct resources to higher valued uses: Is this a short run or a long run attribute?

I came across the following quote in a lecture: "In economics, we often talk about the power of markets and prices to direct resources to higher valued uses." - Mike Munger Is this ability ...
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2answers
74 views

Why will inflation raise sellers' purchasing power?

According to my textbook, in the chapter on inflation, "When a price rises, buyers of that good must pay more, but sellers get more revenue when they sell it. The loss in buyers' purchasing power is ...
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3answers
116 views

Economic anthropology: Have there been cultures / societies without a market?

I was having a discussion about whether the "market" or "markets" always and inherently emerge as long as human societies exist. Given the definition of market as the interplay of ...
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1answer
28 views

What is homebody economy? [closed]

What is this thing named homebody economy? It seems to be related with the virus It refers to working at home or maybe at online shopping?
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1answer
40 views

Increase in the price of skateboard wheels cause a decrease/no change in the demand of skateboards? (2 separate markets w/ 2 separate buyers)

Would an increase in the price of skateboard wheels cause a decrease/no change in the demand of skateboards? (2 separate markets with 2 separate buyers) Note: I'm going to be mainly focused on the ...
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1answer
132 views

Why are Americans at the top of nearly every field?

I live in India, and having spent several years in America before returning, I noticed that Americans dominate in nearly every sphere of human activity. For example, the US seems to be blessed with ...
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1answer
28 views

Does the theory of contestable markets apply to industries where there is a natural monopoly?

The theory contestable markets requires that there be no barriers to entry, no sunk costs, and access to the same level of technology. I know common industries that have natural monopolies (like ...
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1answer
22 views

How to graph a monopoly that does not exhibit the properties of a contestable market?

This question is not a homework question. I am taking a course in industrial organization, and the textbook/professor have given an illustration of a monopoly that is a contestable market. However, I ...
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2answers
39 views

Remove Linear Good From Quasi-linear Utility Function

Given a quasi-linear utility function: $u(x_1, x_2) = f(x_1) + \beta x_2$, $\beta > 0 $ What would happen if good 2 ($x_2$) is removed from the market? Would the new utility function be: $u(x_1) =...
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Lerner Index Interpretation?

How do you interpret the Lerner Index? I ask because at Uni. we have been told that, for monopoly, when the producer max. his profit, he sets the price such as the demand is elastic and the lerner ...
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1answer
88 views

What is the latest thinking on the economic calculation problem? [closed]

Eric Posner and Glen Weyl write in the epilogue of Radical Markets (2018) that they “remain confident that for at least a few generations markets – Radical Markets, that is – will remain the best ...
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1answer
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House allocation: Data notation correction with Top Trading Cycles (TTC) example

I am trying to understand TTC algorithm for house allocation. I have got a small problem. I am trying to understand the following example: IE=[i1 , i2 , i3 , i4], IN=[i5], Ho=[h1 , h2 , h3 , h4], ...
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1answer
29 views

Why is the equilibrium network size can be less than the socially optimal size in networks w/ positive externalities for single system?

For Context, I am reading http://web.mit.edu/rpindyck/www/Courses/NetEx19.pdf. The chapter talks about network externalities in single system like fax machine, email, vaccinations for measles. ...
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1answer
31 views

Does price cap in emergency situation (COVID-19) reduce the availability of a good? Does unregulated market increase it instead?

I was discussing with one of my friend about Italy price cap on surgical mask to control speculation. He says price cap does not allow industries to invest more to increase the production that would ...
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Can we consider a supermarket as a market?

Good morning, I have been reading a book in which the author said that "the supermarket is not a market, because despit the large number of buyers, the seller is unique". So, I've been wondering ...
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1answer
227 views

Properties of Financial Markets in Real Life

When studying financial economics, three concepts appear everywhere Equilibria (investors maximise utility, markets clear and aggregated demand equals aggregated supply) Completeness (there are ...
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15 views

When has the US imposed large price controls in markets?

During the second world war, the US imposed widespread price controls on various markets. Since then, has the US government employed these sorts of measures (price floors, ceilings, and so on), on a ...
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1answer
34 views

What value do virtual traders of commodity add to the market?

Many if not most companies trading in commodities are only trading them on paper. They will not use the commodity they are buying and can not take deliver of the physically commodity. What value do ...
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1answer
143 views

Why didn't other oil pricing benchmarks such as Brent go negative?

This question is asking why the oil (in this case, WTI) price is negative. While I think I have broadly understood why WTI collapsed, I don't really understand why other oil pricing benchmarks didn'...
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1answer
25 views

CDO and Nonpositive Equity Questions

I have two questions about statements made in this video: https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/bank-bailout/v/bailout-2-book-value At 6:25, the video ...
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Are final goods commodities?

I've been reading about final goods and commodities and some links https://en.wikipedia.org/wiki/Final_good https://marketbusinessnews.com/financial-glossary/final-good/ mention that final goods ...
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1answer
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Does the case of strategic complements always result in a situation where the Stackelberg leader is worse off?

For example, in the case of Bertrand competition, is the Stackelberg leader worse off relative to the follower? If so, why? Is this because the first mover can always undercut until marginal cost is ...
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1answer
320 views

Competitive vs complete and non-competitive vs incomplete marekts

The very insightful questions that arise, when someone studies micro foundation are the following: What is the difference between competitive and complete marekts? When we refer to the first is it ...
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27 views

A problem: allocation of apartments

Setup: Trine owns an apartment in Copenhagen. She is willing to rent it out at any positive price. Peter and Simon lives together and are both students. They will like to rent the apartment for less ...
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Market structure determination

I will be conducting a research about the market structure of an outdoor farmers market. I wanted to know what kind of survey questions could help me for example to determine the PES of the market or ...
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2answers
515 views

Why currency purchasing power is linked to confidence in central banks

From the New Statesman, http://www.newstatesman.com/politics/economy/2016/02/coming-storm, "Ever since the collapse of the Bretton Woods system of pegged exchange rates in 1971, the sole guarantee ...
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1answer
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If a firm produced 100 pens with a market value of $1 each, but only 50 were sold, what is the value added to the GDP? [duplicate]

Is it 100 dollars or 50 dollars? I'm assuming it is $100 because GDP is the total market value of all final products. Is this correct?
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5answers
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Why isn't the cost of shoes affected by their size?

I have noticed that many shoe selling shops I have visited have the same price tag regardless of the shoe size. Intuitively I'd think the bigger the shoe the more material and consequently capital ...
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Does the property values (or rental price) of a neighborhood/region increase with new residents taking up empty lots or apartments changing residency?

Does research explore the idea that there is an association of house prices in an area or neighborhood with the influx of new residents? That is, if there are empty spaces in a neighborhood, or ...
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1answer
46 views

Why has gold dropped during the same week as Deutches Bank faces great difficulties

I chose the phrasing "great difficulties" to be polite. The "capital release unit" seems to be a bit of a desperate action from the bank, coupled with further complications involving bad press made ...
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1answer
144 views

bonding curves and the market

This question is related to economics on the blockchain. Bonding curves are becoming popular; however, it is a bit concerning that the price on an asset is predetermined by a mathematical function. ...
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4answers
65 views

Bandwidth, latency and price

Can a market be seen as a set of nodes (market actors) connected by edges with bandwidth and latency characteristics? Are these terms used in economics? If so would an import tariff affect bandwidth ...
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2answers
879 views

What would happen if stock markets were open 24 hours?

Suppose you are a broker or a trader, and the stock markets will be open 24 hours a day. What would be the implication for you as a broker in this scenario? I mean: How will your strategies change? ...
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1answer
60 views

Is it possible to sell a rival and non-excludable product?

The context pertaining to which I have asked this question is same as that of the question linked below Rival and non excludable products In the linked question, a few examples of rival and non-...
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1answer
71 views

What mathematical structure or formalism can be used for modelling strategic investment decisions of agents in the context of competition?

I'm trying to analyze the decisions of agents in investing scarce resource like time and money into developing their product/service/offering in the presence of competition. I need to know what kind ...
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1answer
73 views

Understanding agents selecting among markets

Let's say an entrepreneur can choose between starting a business in a competitive market with zero economic profit, and starting a business in a market that is not perfectly competitive with positive ...
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Wealth Distribution and market incompletness

From the literature of incomplete market (e.g. Aiyagary 1993,1994), it seems to be the case that: With complete markets, the capital distribution in the final steady state depends on the distribution ...
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1answer
48 views

Selling price of a widget at competitive equilibrium

Let's suppose that it costs producers a minimum of y dollars to produce a widget (it may actually cost more, depending on the producer, but that is the bare minimum). In a competitive equilibrium, ...
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1answer
18 views

Effect of prediction of later catastrophe

Say a catastrophic worldwide event is predicted likely for exactly 100 years from now, but it will not affect anyone til then. Say a large meteor hit. Would markets budge much? My only relevant ...