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.
186 questions
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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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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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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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Can econometrics test for correlation or causality between prices and corruption?
This week there was news that some prices are rising. I heard that in some countries where corruption is high the prices are also higher. I wonder if there is causaility or just both at same. It would ...
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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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8
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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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Is market failure constant? What properly defines it?
My textbook defines market failure as when "the production or consumption of a good or service causes additional positive or negative externalities on a third party not involved in the economic ...
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Benefits of a cartel among firms
Suppose I have $n>2$ firms selling differentiated products. These firms form a cartel for the price. The cartel has size $n_c$. Let $\pi_{i,m}$ be the payoff of a firm $i$ outside the cartel and $\...
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7
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Auction mechanism with no trusted third-party
I have been using a double-auction mechanism to solve a two-sided market where multiple agents are competing to supply/use slices of a shared resource. The owner of the resource is a trustable third-...
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3
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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 ...
- 171
6
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When to use the market and when to use central planning?
I have a basic question: my understanding is that in a market economy, economic decisions are governed by prices, i.e prices signal what should be produced & how much. This is opposed to central ...
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Why do co-ops dominate in certain markets rather than more-conventional enterprises?
Why do co-ops dominate in certain markets rather than more-conventional enterprises?
For example, the US dairy processing market seems to be dominated co-ops like Land'O Lakes and Dairy Farmers of ...
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5
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1
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Are stock exchanges market makers?
Are stock exchanges like NASDAQ and NYSE market makers? In other words, are they providing liquidity by pairing individual buyers and sellers with each other in real-time? Or does it work differently?
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If Germany is the largest exporter, why do Chinese products pervade the the US market?
Despite Germany being the third larger exporter in the world, I have not once seen German products on online retail sites such as Amazon.com, NewEgg, BestBuy, or any retailer in the US really. Why is ...
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How can the abuses of monopoly power lead to market failure?
I know that the abuses of monopoly power can cause market failure, but I don't know why that is. I am guessing that because monopolies face a lack of competition, they have no incentive to improve ...
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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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5
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1
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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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Why is food less expensive in India than the United States?
India has 4x the population, less land, and far worse technology and infrastructure than the United States. Shouldn't food cost in the US be less expensive? I've never been to India, but it seems like ...
- 153
5
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1
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Prediction market based on LMSR: Sell, or buy other side?
Consider a prediction market with two outcomes (Yes and No) and a scoring rule based on Hansons’s LMSR, i.e. ln(ea+eb), where a and b are the number of Yes resp. No shares sold.
Assume that I have ...
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5
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1
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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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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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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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"For a market to exist there must be scarcity" (T/F)
The answer provided was 'true', that scarcity was necessary in the existence of a market. But isn't that not always true? For example, there's a market for canned air, and air is most definitely not ...
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4
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What are the most recent devopments with applying fractals to economics?
I was researching fractals for my senior mathematics presentation and discovered that one of the most recent pioneers in that section of the field was able to apply fractal mathematics to the field of ...
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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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Why is the Market-Clearing Price also an Equilibrium Price?
When the price is such that supply equals demand for e.g. bicycles, everybody who wants to buy a bike at that price gets one, and every bike gets sold. Everybody goes home happy and the marketplace ...
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Is there any historical example that a market is shrinking down after competition?
I was told that the advertising market as a whole shrank after Google became part of the marketing industry. Apparently, the decrease occurred in offline markets as well as online markets.
Is this a ...
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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 ...
- 141
3
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3
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305
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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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Why does Venezuela have such a high Big Mac Index?
Venezuela is ranked #2 in the 2014 Big Mac Index at \$7.15 per Big Mac. You can see the graph here. However, Venezuela is not a very rich country, having a gross domestic product of \$11,789 per ...
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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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3
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1
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Why do externalities lead to a Pareto-inefficient outcome?
So we know that under a Pareto-inefficient outcome, there is room for Pareto improvement, i.e. making someone better off without hurting anyone.
Assume that there is a drug company which is in ...
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3
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1
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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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3
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2
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Under what conditions does market failure occur?
Edit: Is it possible to broadly categorize the ways in which market failures occur into relatively few categories? If so, what are they?
3
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1
answer
675
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Where can I find statistics for numbers of 16-20 year olds in the world?
Where can I find statistics about how many 16-20 years old people do live in the world?
If there is no such statistics, how about people in this age-range in europe+amerika?
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3
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1
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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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3
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1
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Episodes of Housing Crashes and Never Recovering
Looking at many housing markets in major cities around the world today it looks like most (London, New York, Sydney, Beijing, Toronto,...) have become totally detached from the earnings of the local ...
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Are market structures on a spectrum?
So I understand that each market structure has their own characteristics, and that for instance Perfect Competition involves high competition, and I believe Monopolistic competition slightly less so, ...
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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 ...
- 1,959
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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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Fundamental Theorem of Asset Pricing (Linear Algebra)
I saw this question in a textbook that I was recently reading and don't really know how to aprpoach this problem.
Let $H$ be a finite dimensional vector space with inner product ($\cdotp$, $\cdotp$)....
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3
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0
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residential property shares trading (similar to REIT)
This year in the UK a residential property crowdfunding platform propertypartner.co went live and I would like to understand it from economic point of view.
The idea is that a flat/house is purchased ...
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3
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Capital asset pricing model (CAPM) applied to countries
I'm struggling on trying to find a beta for an equially wighted profolio for three countries (A, B,C).
All the data I'm given are montlhy retunrs of each countrys ...
3
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0
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Europe not self-sufficient in terms of food requirements and consumption?
An acquaintance once told me that Europe is not self-sufficient in terms of food consumption as it does not have enough farmland and farmers to produce enough for all its people, especially in terms ...
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With OPEC driving the prices of oil down, can American producers simply store oil produced at higher cost to sell later? [closed]
I have been wondering. With OPEC driving down the price of oil in order to stifle the growth of the American oil industry, what can we do about it?
More specifically, why don't these oil producers ...
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2
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1
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Access to the markets for a country
What does it mean for a country to have access to the markets. E.g: There is an ongoing discussion when Greece will follow a prosperity path in order to enter again the "markets".
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2
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1
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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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2
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551
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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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2
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Till what point do firms enter a market?
Hal Varian states that for a firm to enter an industry, the condition should be such that the price that the firm is charging is slightly above (p') the market price (p*) in a perfectly competitive ...
2
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1
answer
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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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