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
98 views

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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1answer
141 views

What are some applications of Akerlof's 'lemons' in goods and services markets?

How can the idea of Akerlof's 'lemons' be applied to goods and services markets (that doesn't include second-hand cars)?
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1answer
207 views

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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2answers
2k views

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, ...
2
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1answer
141 views

When to prefer maximisation of surplus and when instead to prefer minimising differences in price and q to find market equilibrium?

Two alternative approaches to compute a market equilibrium (in static analysis) are either to minimize the differences (either using abs() or a quadratic diff) between supply-demand quantities and ...
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1answer
168 views

Difference between LMSR and Liquidity-Sensitive LMSR

What is the difference between the LMSR (logarithmic market scoring rule) and the Liquidity-Sensitive LMSR (LS-LMSR) and what would cause prediction markets like Augur to focus on the later model?
3
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1answer
848 views

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 ...
6
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3answers
166 views

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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2answers
306 views

Would you consider airport parking to be a monopoly or a monopolistic market?

If you look at it one way and group the different companies that offer parking, it could be a monopoly as that is the only place you can park. On the other hand, the different companies offer ...
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2answers
307 views

“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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2answers
4k views

Is the marginal cost the same for every firm in a perfectly competitive market?

Spin-off from: market equilibrium quantity $\ne$ firm profit maximising quantity? Consider a perfectly competitive market with equilibrium price $P_{eq}$ and quantity $Q_{eq}$ and firm with profit ...
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1answer
339 views

market equilibrium quantity $\ne$ firm profit maximising quantity?

Consider a perfectly competitive market with equilibrium price $P_{eq}$ and quantity $Q_{eq}$ and firm with profit maximising quantity $Q_f$ as illustrated below: I guess any firm in the market would ...
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0answers
44 views

Demonstrating that markets yield productive and allocative efficiency to introductory students

Has anybody come across a nice, intuitive (i.e. neither formal nor technical) way to demonstrate how markets yield both productive and allocative efficiency? I suppose the allocative argument ...
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1answer
654 views

University course references for Market Structure/Industrial Organization

Are there any books that are used in University-level courses that contain a detailed analysis of market structure ( Perfect competition , Monopoly and so on)?
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1answer
795 views

What is the wealth of a company?

I would like to better understand what is the wealth of a company and what is made of. Is the wealth of a company similar to GDP of country, like a "gross company product" ? As example: can we say ...
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2answers
10k views

How can the abuses of monopoly power lead to market failure?

So 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 monopoly's face a lack of competition, they have no incentive to improve ...
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2answers
504 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
557 views

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?
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0answers
57 views

World company database?

I need to find the list of companies with their respective market caps and their sectors of activities. For now I have found these two links: • https://goo.gl/E8WJzu • http://goo.gl/vuHDuF But I ...
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2answers
45 views

We see stocks outperforming things like bonds in the long run (past 100 years), but could this be an artifact of that particular 100 year timeline?

When looking at historical return patterns for investments, one can clearly see the stellar performance of equities over the long haul. That being said, we know that we can center in on certain 20-25 ...
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0answers
161 views

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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0answers
57 views

How to model optimal market pricing?

I am interested in understanding how to mathematically model market interaction to optimize pricing strategy. In my model I have two kinds of knowledge: the market's order book and the price/volume ...
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2answers
3k views

What is the difference between 'actual' and 'potential' interaction between buyers and sellers?

In the book "Microeconomics" by Pyndyck and others, the author(s) define a 'market' as a collection of buyers and sellers, who by the actual or potential interaction with each other determine the ...
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4answers
3k views

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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1answer
55 views

What are the implication of state-run oil production vs. private production from leases?

I'm not any kind of expert in this area, so please be gentle. It seems that we speak of oil (and other natural resources) as though control of output and revenue from extraction adheres to the ...
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3answers
451 views

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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1answer
37 views

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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0answers
88 views

Did I do something wrong in calculating the market equilibrium?

Sorry for asking such a silly question, but something seems odd about my answer to this question: Suppose that two consumers, Jeff and Walt, are the only consumers in the market for carrots. Jeff’...
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0answers
26 views

References for “Capturing value”

I have seen in several places references to "capturing value". For example: Value Creation vs. Value Capture Work on Stuff that Matters: First Principles I think that such considerations are ...
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2answers
312 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? ...
2
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1answer
44 views

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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63 views

Competition vs. cooperation [closed]

Why has competition evolved to be the leading principle of market based economies? Can this sustain in the long run? I am thinking about cooperation as a better principle of doing things in the long ...
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0answers
29 views

Understanding Options Quotes

Below is a picture of today's Rough Rice Options Quote. I would like to understand how to interpret the information in the table below. Firstly, with regards to the future contract we see that it ...
2
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0answers
80 views

What topics are important to analyse a financial product? [closed]

When reading analysis papers of financial product, derivative or stock, tangible or not, I noticed that a lot of those papers seem to have similar structures. This got me to the question if there ...
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0answers
44 views

Analysis of exogenous shocks on equities

Real Life Problem This one is a tough one and some crowd sourcing seems like a good way to get some feedback. I am trying to determine the effect of Non-Farm Payroll surprises on a subsector of the ...
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1answer
116 views

Will the goods market be in equilbrium along the AD curve?

This is a question which was asked in the entrance to Jawaharlal Nehru University's (New Delhi) entrance for their post-grad program specializing in International Economics in 2014. Which of the ...
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1answer
1k views

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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0answers
93 views

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 ...
2
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0answers
53 views

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 ...
4
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1answer
736 views

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 ...
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0answers
70 views

Decreasing consumption prices and increasing housing prices

It's election time in my country. The government boasts a decrease of 5% in consumption prices thanks to removing regulations, while the opposition blames the government for an increase of 5% in ...
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99 views

Economic Model: Incentive Compatible Market Economy that Satisfies Basic Needs

The capitalism system relies on a monetary system for exchange of goods and services. This appears to cause a large number of problems. For example, we shun those that don't have money. Is there an ...
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1answer
24 views

Setting prices in mobile telephony

Can someone please explain or provide some useful link on factors affecting setting prices of mobile telephony services?
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0answers
95 views

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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1answer
82 views

How do I distinguish price-taking in perfect competition from monopsony?

I'm working on a practice problem where I'm giving the following: Suppose a firm is a price-taker and can sell the good it produces at price $p$. There is more to the problem, but it is not ...
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1answer
667 views

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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1answer
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Is there a “personality test” for societies? [closed]

You may have heard of the Myers Briggs personality profile test. Is there a similar test for societies? The MB has four dimensions Introversion/Extraversion iNtuition/Sensing Feeling/Thinking ...
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0answers
144 views

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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3answers
365 views

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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1answer
59 views

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 ...