# Questions tagged [self-study]

Questions about self-studying economics, including curriculum design, study strategies, resources, etc.

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### 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 ...
39 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 ...
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### 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, $X=\begin{bmatrix} x_1 & x_2 & x_3 \end{bmatrix}$. ...
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### 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, ...
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### 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 ...
347 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 ...
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### 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 ...
390 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, ...
52 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 ...
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### 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 ...
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### 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 ...
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: $\displaystyle\sum^{\infty}_{t=0}\... 1answer 163 views ### Spence's Job Market Signaling Game I have a little doubt in the Job Market Signalling Game. I am referring to A Primer in Game Theory: Gibbons, Chapter 4, Signaling Games The attached paragraph refers to a Separating Equilibrium case ... 1answer 127 views ### Repeated Game SPNE I approached this question in this way:$(P_1,P_2), (R_1,R_2), (S_1,S_2)$are the Nash Equilibria of the Stage 1 game. For the given strategy to be sustained as SPNE, there should be no way unilateral ... 1answer 118 views ### SPNE and Pareto Optimality "The SPNE of a sequential game might not necessarily be Pareto Optimal" I understand the definitons of Nash Equilibria and Pareto Optimality and that these are not synonymous concepts. An example in ... 1answer 67 views ### Expected payment in a second price auction with affiliation The symmetric bidding strategy in a second-price auction with affiliation is given by$\beta(x)=v(x,x)$, where$v(x,y)=E[V_1|X_1=x,Y_1=y]$(here$Y_1$is the highest ordered statistic among the ... 2answers 159 views ### Bayesian Nash Equilibria: Strong and Weak Types I need a little help with the question. I understand that since both players have two types each, there will be 4 different payoff matrices to be considered,$(S,S)$,$(S,W)$,$(W,S)$,$(W,W)$, each type ... 1answer 202 views ### Auctions with affiliation This problem is an example given in Vijay Krishna's Auction Theory (2nd Edition, Chapter-6, Example 6.2). The problem is as follows: Suppose$S_1,S_2$, and$T $are uniformly and independently ... 0answers 86 views ### Take It Or Leave It Strategy: Social Optimum Here is what I understood Using Backward Induction, I inferred that buyer offers a price, say,$P$and the seller will sell only if$P \geq c(I)$. Setting the lowest possible Price that will ensure ... 1answer 23 views ### Is there book or research on economically sustainable design of town or village? I'm looking for a book which may help to design a self-sustainable small settlement, which can maintain its own economy with limited connections to the outside world. Prefereably it should answer ... 3answers 386 views ### Book recommendations: Introduction to economics I recently made my first trip to a foreign country. I'm quite amazed by how things work. Why are things priced differently at different places? Is the bed-sheet that I bought from that country worth ... 1answer 209 views ### Disagreement in Strategic Bargaining Construct a pair of startegies for the ultimatum game ($T=1$bargaining game), that constitutes a Nash Equilibrium and together support the outcome that there is no agreement reached by the two ... 2answers 100 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 ... 0answers 66 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 ... 1answer 65 views ### features of Generalised Method of Moments estimation [ What does it mean that GMM is robust to distributional assumptions? 0answers 28 views ### Linearisation of the IS curve? How to the IS curve linearised around the structural equilibrium?, what is the math behind it? 1answer 49 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 ... 2answers 378 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 ... 1answer 121 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 ... 1answer 180 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 ... 1answer 232 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? 2answers 68 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. ... 2answers 239 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 ... 1answer 272 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 ... 2answers 142 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: ... 1answer 68 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 Xx\succsim y \rightarrow y \succsim ...
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. ...