Questions tagged [self-study]
Questions about self-studying economics, including curriculum design, study strategies, resources, etc.
144
questions
0
votes
0answers
28 views
Corner solution of the maximization problem
I have the function
$$u(c,h,l)=ln(c-a)+bl+dh$$
I know that $a$ is minimum consumption level. ( which means that $c\ge a$
$h$ is working hours. $l$ is Leisure hours. And $c$ is consumption. The ...
0
votes
2answers
48 views
Mathematical calculation (easy I guess)
Let’s say we examine a labour market that includes 100.000 people in total.
80,000 employees are paid 100€ and the rest 20.000 are paid with 80.
I want to find the average salary in this labour ...
1
vote
0answers
62 views
Revenue maximization problem
There are $N>0$ Households in an economy.
The government has aim to maximize a weighted average of income by imposing tax on the rich people and redistribute the tax revenue to the labor ones.
...
0
votes
2answers
61 views
Question on Central bank loss function interpretation
How do you interpret this central bank’s loss function:
$$L(\hat x, \pi)=\alpha \hat{x}^2+(\pi-\pi^T)^2$$
where $\alpha >0$ and $\hat x$ is output gap.
Phillips curve is $\pi = \theta \hat{x}+\...
0
votes
1answer
66 views
Central bank loss function (I did a solution, but it doesn’t totally make sense I guess)
I have question on central bank loss function.
We know that the central bank loss function is
$$L(\pi, \bar{Y})= (\pi- \pi^e)^2+\beta \bar {Y}^2$$
And we know that fisher equation is $$i=r+\pi^e$$...
0
votes
2answers
55 views
The relationship between profit and wages
It seems obvious that an individual company increases their profits when they reduce wages or increase automation or some such.
But if wages fell universally because of this, wouldn't that decrease ...
0
votes
0answers
22 views
Recommendation on economics books for a statistician
I have mainly an statistics/informatics background and i have basically not knowledge in economics.
What some good books to star given my background?
Edit:
My principal interest is stock market ...
1
vote
1answer
40 views
OLS and 2SLS normal equations
For a system of equations with $M=2$ endogenous variables, $ Y=\begin{bmatrix} y_1 & y_2 \end{bmatrix}$ and $K=3$ exogenous variables, $X=\begin{bmatrix} x_1 & x_2 & x_3 \end{bmatrix}$.
...
0
votes
1answer
29 views
Sequential Price Competition for Perfect Complements
There are two goods, $1$ and $2$ produced by two firms at zero marginal costs. The goods are perfect complements. The demand for each goods is: $Q_1=Q_2=a-(p_1+p_2)$. The prices are set sequentially, ...
0
votes
0answers
16 views
Questions regarding 'Efficient Trade with Interdependent Values' by Marek Pycia and Peng Wang,2015
This question is with reference to the paper 'Efficient Trade with Interdependent Values' by Marek Pycia and Peng Wang,2015(See here).
At page no. 4 of the paper, the authors describe $v_i$ as the ...
2
votes
2answers
94 views
Bertrand Duopoly Equilibrium for Discrete Prices
There are two identical firms, $1$ and $2$, with zero marginal costs. They produce homogenous product, which is demanded by a unit mass of identical consumers, each of which has inelastic unit demand ...
0
votes
0answers
33 views
How to show that a leontief utility function is homothetic?
usually what i do to show that a utility function is homothetic is by either showing that the function is homogeneous or if the MRS is homogeneous of degree 0.
However the MRS is not defined. So im ...
0
votes
0answers
11 views
Reference Request: The Effect of Wealth in Society
I am new to the subject and I am looking for some help.
It goes without saying that the economy is the center of society, and the theory of economics deals with that, But I am especially interested ...
0
votes
1answer
174 views
Preference: Convexity and Monotonicity
I need an example of a
Convex, non-monotonic preference
Non-convex, monotonic preference
I figured that an example of non-convex, monotonic utility preference could be $U(x,y)=x^2+y^2$.
For convex, ...
0
votes
0answers
24 views
optimization problem for two individuals
Two flat mates 1 and 2, rent a flat and play their own music on the only CD player owned by flat-owner. They both like their own music, but dislike the music played by the other. Given the timing ...
0
votes
0answers
36 views
two period consumption problem
Ms. A earns 25,000 dollars in period 1 and 15,000 dollars in period 2. Mr. B earns 15,000 dollars in period 1 and 30,000 dollars in period 2. they can borrow money at an interest rate of 200% and can ...
-3
votes
1answer
37 views
NASH equilibrium [closed]
How to approach questions like these:
In a two player static game with a discrete strategic space that permits each player to chose one of the four possible strategies what is the maximum number of ...
2
votes
1answer
31 views
How do you keep up to date and find the most relevant papers?
What tools or methods you use to keep up with the frontier of the field? I follow some specific papers and authors. I was wondering what's the best way to keep up to date with relevant things with so ...
0
votes
1answer
37 views
Neoclassical model with proportional taxes
In a certain economy, time is discrete with periods $t=0,1,2,...$. The economy is populated by many households and identical firms. The utility of a household is:
$\displaystyle\sum^{\infty}_{t=0}\...
0
votes
1answer
55 views
Spence's Job Market Signaling Game
I have a little doubt in the Job Market Signalling Game. I am referring to A Primer in Game Theory: Gibbons, Chapter 4, Signaling Games
The attached paragraph refers to a Separating Equilibrium case ...
2
votes
1answer
74 views
Repeated Game SPNE
I approached this question in this way:
$(P_1,P_2), (R_1,R_2), (S_1,S_2)$ are the Nash Equilibria of the Stage 1 game. For the given strategy to be sustained as SPNE, there should be no way unilateral ...
1
vote
1answer
46 views
SPNE and Pareto Optimality
"The SPNE of a sequential game might not necessarily be Pareto Optimal"
I understand the definitons of Nash Equilibria and Pareto Optimality and that these are not synonymous concepts. An example in ...
4
votes
1answer
53 views
Expected payment in a second price auction with affiliation
The symmetric bidding strategy in a second-price auction with affiliation is given by $\beta(x)=v(x,x)$, where $v(x,y)=E[V_1|X_1=x,Y_1=y]$ (here $Y_1$ is the highest ordered statistic among the ...
1
vote
2answers
64 views
Bayesian Nash Equilibria: Strong and Weak Types
I need a little help with the question. I understand that since both players have two types each, there will be 4 different payoff matrices to be considered, $(S,S)$,$(S,W)$,$(W,S)$,$(W,W)$, each type ...
4
votes
1answer
144 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
33 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
11 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
23 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
184 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
104 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
65 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
40 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
59 views
features of Generalised Method of Moments estimation
[
What does it mean that GMM is robust to distributional assumptions?
0
votes
0answers
24 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
39 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 ...
2
votes
2answers
156 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
92 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
70 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
127 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
52 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.
...
3
votes
2answers
105 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
220 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
95 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
53 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
267 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. ...
2
votes
1answer
41 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
74 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
54 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
91 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
62 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.
