Questions tagged [self-study]
Questions about self-studying economics, including curriculum design, study strategies, resources, etc.
156
questions
0
votes
1answer
32 views
Why does a firm in a perfectly competitive market not need to cover fixed costs in the short run?
While studying, I came across the solution that in some cases only the produces surplus, PS, needs to be positive, however not the profit, $\pi$. That means that if $PS \geq 0; p \geq AVC$, whereas, e....
0
votes
0answers
33 views
Economic interpretation of the given dynamic equations
How do you interpret these equations
$$c_{t+1}/c_t=1-\beta [(c_t/w_t)-a]$$
$$w_{t+1}+c_t =kw_t+q$$
where $\beta$ a, k, q are strictly positive parameters. $c$ is consumption and $w$ is wealth.
——...
0
votes
1answer
75 views
Job search theory in discrete time
Let us assume that there is a labor who lives in discrete time universe and discounts future payoffs with the discount factor $b\in (0,1)$.
And we assume that this labor is at period $t=0$ at first. ...
0
votes
1answer
44 views
Market impact function
I have the following Dynamical system for market impact function
$$p_{t+1}-p_t=a(d_t-s_t)$$
$$s_{t+1}-s_t=bp_ts_t-cs_t$$
$$d_t=y-rp_t$$
where $s_t$ is quantity supplied, $d_t$ is quantity demanded, ...
2
votes
0answers
30 views
Behavioral Dictator Game
I am doing a self study on behavioral economics and I am trying to solve behavioral version of the dictator game with following utilities for person 1 and 2.
$$ u_1( \sigma_1, \sigma_2 ) = \...
0
votes
0answers
29 views
Why decreasing co-state variable (over time) is Compulsory?
I have a short question.
In the continuous time infinite horizon optimal control maximization problem Like
$$\max \int^{\infty}_0 u(c_t)e^{-pt}dt$$
I use current hamiltonian function and I obtain ...
0
votes
1answer
40 views
Intertemporal budget constraint notion
Let $W$ denote the investor's wealth $B$ is the the investment in the risk free asset (suppose that the risk free rate is taken to be zero) and $X$ is the investment on the risky security which has ...
1
vote
0answers
58 views
Writing constraint
A firm accumulates useful knowledge $k$ by investing in R&D activities. Specifically, if the firm invests $r > 0$ dollars into R&D, the stock of useful knowledge grows by about $2\sqrt{r}$ ...
2
votes
0answers
49 views
Finding optimal path in continuous time
I have the following optimal control problem
$$\max_{c_t,l_t} \int_0^{\infty} [ln(c_t)+\theta ln(1-l_t)]e^{-pt}dt$$
st. $$\dot{k_t}=k_t^{1/2}l_t^{1/2}-c_t-\beta l_t$$ $$k_0>0$$
I do big part of ...
3
votes
0answers
74 views
Bliss point hamiltonian function
I have the following utility function
$$u(c_t)=g(c_t-b)^2$$ for constants $g,b>0$
Edited: in order to be bliss utility function, It must be g is negative. But in the question g is given to be ...
0
votes
1answer
27 views
Why do the gross return of wealth and wealth move in opposite direction?
I have a short question:
Why does the gross return of wealth decrease as wealth increases?
Why do the gross return of wealth and wealth move in opposite direction?
$$R=1+(a/w^2)$$ where a is non-...
4
votes
3answers
67 views
Books friendly to self-studying Industrial Organization
I'm currently an undergraduate freshman looking for resources to self-read Industrial Organization. I've read Varian's undergraduate book cover-to-cover and have a decent understanding of basic game ...
0
votes
1answer
38 views
Study guide (and…) for “Intermediate Microeconomics with Calculus” by Varian
I have been googling study guides, solution manuals and other helpful material made by professors. But I have not found anything useful.
Q: Do you guys know anything that will make the book easier ...
0
votes
2answers
174 views
Corner solution of the maximization problem
Answer
Hello, I upload the actual question with my 8-pages answer. Please can you check it. Is there a corner dissolution for $c=\gamma$. Please share your ideas. Thanks.
1
vote
0answers
85 views
Revenue maximization problem
There are $N>0$ Households in an economy.
The government has aim to maximize a weighted average of income by imposing tax on the rich people and redistribute the tax revenue to the labor ones.
...
0
votes
2answers
69 views
Question on Central bank loss function interpretation
How do you interpret this central bank’s loss function:
$$L(\hat x, \pi)=\alpha \hat{x}^2+(\pi-\pi^T)^2$$
where $\alpha >0$ and $\hat x$ is output gap.
Phillips curve is $\pi = \theta \hat{x}+\...
0
votes
1answer
80 views
Central bank loss function (I did a solution, but it doesn’t totally make sense I guess)
I have question on central bank loss function.
We know that the central bank loss function is
$$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
96 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
24 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
51 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
33 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
125 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
42 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
242 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
26 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
37 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
40 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
33 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
41 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
70 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
86 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
56 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
54 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
94 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
158 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
36 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
219 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
118 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
73 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
47 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
60 views
features of Generalised Method of Moments estimation
[
What does it mean that GMM is robust to distributional assumptions?
0
votes
0answers
27 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
40 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
198 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
98 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
107 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 ...
