Questions tagged [self-study]
Questions about self-studying economics, including curriculum design, study strategies, resources, etc.
2
votes
0answers
74 views
Auctions with affiliation
This problem is an example given in Vijay Krishna's Auction Theory(2nd Edition, Chapter-6, Example 6.2). The problem is as follows-
Suppose $S_1,S_2$, and $T $ are uniformly and independently ...
1
vote
0answers
24 views
Take It Or Leave It Strategy: Social Optimum
Here is what I understood
Using Backward Induction, I inferred that buyer offers a price, say, $P$ and the seller will sell only if $P \geq c(I)$. Setting the lowest possible Price that will ensure ...
0
votes
0answers
5 views
Relation between Captial Market Line and Security Market Line
I am referring to the book, "William Sharpe et al, Investments, 6th Edition. I am trying to wrap my head around some lines from the book, pertaining to Security Market Line.
It reads,
"Earlier it ...
1
vote
1answer
22 views
Is there book or research on economically sustainable design of town or village?
I'm looking for a book which may help to design a self-sustainable small settlement, which can maintain its own economy with limited connections to the outside world. Prefereably it should answer ...
3
votes
3answers
107 views
Book recommendations: Introduction to economics
I recently made my first trip to a foreign country. I'm quite amazed by how things work. Why are things priced differently at different places? Is the bed-sheet that I bought from that country worth ...
3
votes
1answer
57 views
Disagreement in Strategic Bargaining
Construct a pair of startegies for the ultimatum game ($T=1$ bargaining game), that constitutes a Nash Equilibrium and together support the outcome that there is no agreement reached by the two ...
2
votes
2answers
41 views
Matchstick Game
Consider the following $2$ player finite extensive game. Player $1$ moves first. She must choose an integer from $1$ to $10$, and place that number of matchsticks on the table. Next, Player $2$ must ...
0
votes
0answers
18 views
Strategy sets and SPNE
I need to find the startegy sets for the two players in this game. I understand that the game has only one subgame, that is, the entire game.
I cannot seem to understand the strategy sets of the ...
1
vote
1answer
56 views
features of Generalised Method of Moments estimation
[
What does it mean that GMM is robust to distributional assumptions?
0
votes
0answers
21 views
Linearisation of the IS curve?
How to the IS curve linearised around the structural equilibrium?, what is the math behind it?
1
vote
1answer
36 views
Nash Equilibria in Target Destroying-Guarding Game
Army A has a single plane which can strike one of three possible targets, A, B and C. Army B has one anti-aircraft gun that can be assigned to one of the three targets to guard it. The value of each ...
1
vote
0answers
32 views
Best Response Functions for Cournot
For a Cournot Duopoly game with Linear Demand functions, we need to find the optimal quantity of each firm such that profit is maximised. Given the linearity of the Demand curves, we will obtain a ...
0
votes
1answer
55 views
General Equilibrium Involving Production
I need a little conceptual clarification.
For a standard $N*K*M$ general equilibrium model, would an allocation, say, $y^k$ be Pareto Optimal if it does not solve $max(py^k)$?
I understand that the ...
1
vote
1answer
40 views
Majority Rule and Single Peakedness
Majority Rule will induce non empty choice set if individual preferences are single peaked
Is this statement true? I have some trouble in understanding the meaning of 'single peakedness' in context ...
3
votes
1answer
76 views
Blocking Coalitions
For $n$ individuals, can a blocking coalition only be formed by at least $n/2$ individuals? For example, if there are 6 individuals, can less than 3 individuals form blocking coalitions?
0
votes
2answers
38 views
Yield To Maturity exact meaning
From investopedia: "YTM is the total return anticipated on a bond if the bond is held until it matures"
I have also seen this interpretation used in other sources however this seems wrong to me.
...
2
votes
1answer
61 views
Is it right to derive social marginal benefit by adding individual prices instead of quantities?
I come across a lecture material on market functions and externalities that makes me quite confused. Here's the setup: Two stores are located next to each other. If one installs a camera system in ...
0
votes
1answer
102 views
Prove that $u$ is a utility function for $\succsim$
If X is finite, define this function $u : X \rightarrow \mathbb{R}$ by $u(x) = |\{z\in X:z \prec x \}|$. Prove that $u$ is a utility function for $\succsim$.
Is it sufficient to prove that the ...
0
votes
2answers
76 views
Doubt about equivalence relation
In class I was taking notes about equivalence relations defined as:
Given a generic relation $R$ on $X$, $xIy$ if both $xRy$ and $yRx$
Now, I don't really understand the following proposition:
...
2
votes
1answer
47 views
If $\succsim$ is transitive but irreflexive, then it is asymmetric, proof
If $\succsim$ is transitive but irreflexive, then it is asymmetric.
this is my proof:
Suppose $\succsim$ is not asymmetric, which means that for any $x,y \in X$ $x\succsim y \rightarrow y \succsim ...
3
votes
1answer
128 views
separable utility function and cross price effect
Suppose that consumer's utility function for three goods is separable, that is,
$U(x_1, x_2, x_3) = f_1(x_1) + f_2(x_2) + f_3(x_3)$ ...(i)
where $f_i$ is increasing and strictly concave, i=1,2,3. ...
1
vote
0answers
23 views
Prove that in presence of many goods, the law of DMRS implies that at least one good must be a net substitute for any other good
I've been reading a book where the author claims that "if there are two goods they are always net substitutes. Along an indifference curve an increase in price of good 2 leads to less of good 2 and ...
1
vote
1answer
50 views
Income gap in Ramsey model
Ramsey model with income tax
Question:
For this question you are required to setup a Ransey-Cass-Koopmans model economy with a Cobb-Douglas constant returns to scale production technology, with ...
0
votes
2answers
44 views
when a=0, would economy accumulate more physical capital? Why?
Utility function is
$U(c_t,l_t)=(1-a)ln(c_t)+aln(l_t)$
$l_t$ is leasure time
$c_t$ is consumption
Production function is $y_t=k_t^e(1-l_t)^{1-e}$
$k_{t+1}=i_t+(1-\delta )k_t$
where k is ...
1
vote
0answers
67 views
Signaling questions (separating equilibrium)
Consider two firms
Inverse functions: $p(q)=max\{a-q,0\} $
$q$ is total production and a is positive constant.
This value of a takes two values ah=2 (high demand) and aL=1 (low demand). Their ...
1
vote
0answers
57 views
Maximization under two different states of the world [closed]
What I did is the following one but I am not sure at all:
Any help will be appreciated. Thank you.
-1
votes
1answer
217 views
Profit maximization and allocative efficiency result
I completely stuck to the last part of this exercise. I cannot understand how can I determine an allocative efficiency result.
Any help will be appreciated. Thank you.
2
votes
1answer
183 views
Stackelberg setup
I am completely confused because I cannot find the leader's best response. I do not know if it is exactly the same as it was a Cournot game. What I did is:
Any help will be appreciated a lot. Thank ...
4
votes
1answer
306 views
Bertrand game - Nash equilibrium
The quantity is limited to 300 but the monopoly quantity is equal to 400 and gives a monopoly price of 600. But if we plug the quantity of 300 into the demand function we get a price of 700.But I am ...
2
votes
1answer
126 views
Subgame perfect equilibrium and expected profit
I am so confused because I cannot set up the monopolist's profit maximization problem.What I did is the following one:
Any help will be appreciated. Thank you.
1
vote
1answer
353 views
Pure exchange economy with free and non-free disposal
Question is as follows:
My answers are
(I)
Let k is constant utility level
Then
$$k=\sqrt{x_A^1x_A^2}$$
$$k^2/x_A^1=x_A^2$$
The first derivative is negative. So the indifference curve is ...
0
votes
2answers
363 views
Question on profit maximization with government taxation
(I) A monopolist has a cost function $c(q)=q$. It faces the following demand function $ q(p)=100/p$ for $p\le 20$ and $q(p)=0$ for $p\ge 20$. What are the profit maximizing price and output.
(ii) a ...
0
votes
1answer
167 views
Question on consumption theory
Question:
What my did is
I proceed this question until that point. But, I will be happy if help me to solve this question.
Thank you.
-1
votes
1answer
236 views
Finding the optimal tax
I have a problem regarding the last two questions of this exercises because I can not understand how to set up my model in order to find the optimal tax the optimal quantity to be as there was not a ...
0
votes
2answers
111 views
a question on the endogenous growth model
I have such a question on the endogenous growth mode”:
In the macroeconomics literature there are various ways in which the growth process in the Ransey-Cass- Koopmans model has been endogenized. ...
3
votes
2answers
296 views
Subgame Perfect Nash equilibrium: two stage game
Charitable organizations are ranked according to the proportion of their total budget that is spend on programs(what directly goes to the recipients of their services) relative to money spent on ...
4
votes
1answer
1k views
Cournot Competition game with 3 Firms
Three firms are in Cournot competition. The inverse demand curve is denoted p(q) where p is the price if a total of q units are produced. Assumptions are: p(0)>0 and p'(q)<0 and p''(q) $\le 0$ ...
0
votes
1answer
59 views
Capital accumulation
I have following dynamic optimization problem
$$V(k_0)=\max \sum_{t=0}^{\infty} b^t((1-a)ln c_t+a ln(l_t))$$
Subject to $l_t+e_t=h$ and $y=Ak_t^pe_t^{1-p}$ and $k_{t+1}=i_t+(1-x)k_t$
...
1
vote
1answer
136 views
Maximization with disposable income
Consider a welfare system u dear which a single cash transfer(guaranteed income ) is given to every citizen. Then for each dollar the person earns the payment is reduced to by a where 00 you get a ...
3
votes
0answers
268 views
Market clearing condition with Walras law
I have a diamond overlapping model
The question is as follows
Let us consider an infinitely lived production economy populated at time t by $N_t$ identical and perfectly competitive adult ...
1
vote
1answer
35 views
Where can I look up a companies Herfindahl index?
Where can I find Herfindahl indexes on companies (current or past)? Are there any published lists put out by a research institution?
0
votes
1answer
60 views
The verification of my solution
Farmer Smith's cattle wander into Farmer Jones' land once a month and cause $\$3,000$ of damage. If Smith reduced the size of his herd by half it would reduce the damage by half but it would also ...
1
vote
2answers
227 views
Finding subgame perfect equilibrium
The main part of the question is as follows
(if you cannot read this, I can immediately write it)
My question is how to find the subgame perfect Nash equilibrium for the both cases $\bar{g_2}\ge \...
-1
votes
1answer
192 views
Question on oligopoly.
Consider an oligopoly between two identical firms producing a homogenous good with constant marginal cost where firms face linear market demand. $B_i(q_j)$ denotes firm i’s best response given the ...
1
vote
1answer
153 views
Kuhn-Tucker and optimization (continue)
This is a question related to the question: Kuhn-Tucker optimization problem and game theory .The question is: Some cultures emphasize more social interaction more than others. Is there a role for ...
1
vote
1answer
180 views
Revenue maximization
We have two firms with identical cost structure compete in a market
Demand function = $p=a-bq$
And $q=q_1+q_2$
They are identical in every way. However, firm 1 maximizes profit and firm 2 ...
2
votes
1answer
152 views
Cournot equilibrium question
There are two firs in the market. They produce perfect substitutes at cost $c(y_i)=y_i/3$ for i=1,2. The demand function is $p=1-(y_1+y_2)$
Consider the Cournot competition where firms ...
-1
votes
1answer
80 views
Auction question
I’m studying on auction. But I couldn’t understand some questions about this topic. And I cannot solve such type questions. For example,
I know that a set of symmetric and risk neutral bidders ...
1
vote
0answers
81 views
Kuhn Tucker optimization problem and game theory [duplicate]
Consider a game with two players, where each player i= 1 ,2 has preferences $u_i$= $s_i^a$$c_i^{1-a}$, where c_i is the consumption and $s_i$ is social interaction. $s_i$ is given by :
$s_i$ = $t_i$ + ...
1
vote
1answer
86 views
Profit maximization question
Two firms are in a market together. They produce a product.
Total revenue from sales is $y=K+L$
K is the amount of capital
L is the amount of labor
These two firms each specialized in supplying ...
