# Questions tagged [theory]

The tag has no usage guidance.

128 questions
Filter by
Sorted by
Tagged with
24 views

### What social aggregators are complete?

I am reading Eliaz (2004) for a general treatment of social-choice impossibilities. I am confused by the fact that it seems that we should get completeness even in situations where we should not have ...
1 vote
41 views

### Can the topological assumption in Debreu's representation theorem of cardinal utility be altered from "connected separable" to "second countable"?

Theorem (Debreu 1959 page 9, 10) Let $X$ be connected separable topological space endowed with product topology. If $\succsim$ is independent and at least three factors are essential, then there exist ...
• 1,656
120 views

### What does omitting capital from production function assume about capital?

We have two production functions, one $F(L)$ with labor as only factor of production, the other also includes capital $F(L,K)$. What do we assume about capital in the first case when we omit it from ...
• 1,131
211 views

### Does Debreu's representation theorem of ordinal utility require Hausdorff topology?

By Debreu's theorem of ordinal utility, any continuous weak order on $X$ is represented with a continuous utility function, if $X$ is a second countable or connected separable topological space. My ...
• 1,656
187 views

### Looking for a paper on game theory as a beautiful thing, not needing immediate purpose

I am looking for a paper I am sure to have read a while ago, but cannot recall its title. The message was that we should not judge game theory (or economic theory in general?) by its ability as an &...
• 151
82 views

### Does continuous preference imply upper-hemi continuous demand correspondence?

Let alternative $x,y,z\in R^N$. $\succsim$ is convex, rational, monotonic, and continuous. Let $B=[y,z]$ be a budget segment. Let demand correspondence be $D[y,z]=\{x\in B||x\succsim B\}$ $D[y,z]$ is ...
• 1,656
83 views

### How did econometricians justify the use of $EU$ instead of $EU^2$?

Consider the following two utility functions: $EU(p)=\sum_i u_ip_i$ $EU^2(p)=(\sum_i u_ip_i)^2$. In preference theory, $EU$ and $EU^2$ are equivalent because they represent the same preference. A ...
• 183
67 views

### Any good resources on Information Economics Theory?

I am coming from a political economy/public choice perspective, trying to explore some ideas in signaling, especially the supply-side analysis of information transmission by the media/news. Although I ...
• 53
1 vote
59 views

### How useful is the Fisher equation of exchange?

What empirical value does the Fisher equation of exchange MP=PV have given that the velocity of money, V, is measured as PY/M i.e. nominal GDP divided some preferred monetary aggregate? Surely there ...
• 163
58 views

### For any small perturbation dx, utility cannot change, or else, x* would not be optimal

I am having trouble understanding something that Varian says in "Microeconomic Analysis: Third Edition." For those of you who have the book handy, the question that I have regards something ...
• 103
1 vote
67 views

### Salop (1979) model for labor markets

Can the Salop (1979) model also be applied to labor markets or is there any reason why it should not be?
• 1,131
1 vote
51 views

### Does x ≽ y imply x > y or x ~ y in preferences?

Mas Collel Micro Theory question: Suppose that X is a set. Let ≽ be a binary preference on X. And ~ represents indifference defined from ≽. If ≽ satisfy completeness, is it okay to assume that: x ≽ y ...
• 13
27 views

### Sum of LS-LMSR probabilities is greater than 1

I am trying to implement LS-LMSR in a prediction market with binary outcomes: YES and NO. I am implementing this formula as the cost: ...
• 101
1 vote
29 views

### Theoretical basis of consumer confidence

I have read several papers on the formation of consumer confidence, how it is measured and also its role in predicting economic outcomes empirically. But I haven't come across any theoretical model of ...
6k views

### Why does economics escape Godel's theorems?

I've seen many professors say that Godel's incompleteness theorems don't apply to economics. Of course I've seen others like Yanis Varoufakis who has on record said that many economics papers defy the ...
• 119
30 views

### Interaction of redistributive taxes, monetary policy and the growth rate

While studying macroeconomics, interaction with taxes are not seen to importantly. I am though interested in an interaction with redistributive taxes (such as the income or the inheritance tax rate), ...
• 106
1 vote
117 views

### Curiousity the validity of an example of normative, positive and consumer surplus?

Following up a pretty long but very informative discussion with 1muflon1, I want to expand and merge with consumer surplus to have a big picture. In research of Dasgupta, 2019 about that after ...
• 931
124 views

### Is there any overlap between Rawlsian approach and uncertainty avoidance?

From the definition of the Rawlsian approach The Rawlsian approach to social welfare, built on the foundation of the “veil of ignorance” (Rawls, 1999, p. 118) where "veil of ignorance" is ...
• 931
1 vote
110 views

### Is there any example to see the differences among Rawlsian ethics, Utilitarianism or (classical) liberalism ethics in policy economics?

From a decent answer and comment here of 1muflon1, I am motivated to know more about Rawlsian ethics, Utilitarianism, or (classical) liberalism ethics in policy economics. However, so far, I still not ...
• 931
250 views

### Why "positive theory" is important in discussions of how antitrust law achieve "normative goal"?

In this description regarding positive theory and normative theory, from what I understand, positive theory is based on fact and cannot be approved or disapproved (e.g., explain how the economy ...
• 931
158 views

### What is the difference between Impression Management and Signaling Theory?

I'm interested in theories on how organisations shape their stakeholders' (especially consumers' and investors') perceptions and decisions. I read about Impression Management and Signaling Theory. ...
• 133
140 views

### Effect of bounding action space on the set of equilibria

Suppose $N$ players play a game, where each player's action space is $[0,1]$. Each player has an identical continuous utility function $u:[0,1]\times [0,1]^{N-1}\rightarrow\mathbb{R}$, where the first ...
• 212
1 vote
96 views

### What is the "recursive moral hazard theory" of "trade credit"?

When reading a recently published paper, I saw the paragraph We construct a sample of over 200,000 supply chains to conduct a chain-based analysis of trade credit. Our study uncovers novel stylized ...
• 931
198 views

### Krugman 1980 AER, Deriving Equation 14

I have been trying to derive equation 14 from Paul Krugman's 1980 AER paper. I keep getting a different result, and further, I find that equation 14 from the paper does not balance payments when I ...
1 vote
55 views

### Definition of strictly convex preference

Let $x,y\in X$. Does strictly convex preference (which implies that the utility is strictly quasiconcave) mean that: $x\succsim y$ implies $\alpha x+(1-\alpha)y\succ y$ for any $\alpha\in (0,1)$?
• 1,656
137 views

• 121
66 views

### Theoretical economy calculation of closed country

Is there any well-known theoretical solution to the problem as described below? I am considering an ideal very simplified case. There is a closed country/community of N people. All people are working. ...
• 133
63 views

### Are there some examples of theoretical models that discuss pandemics?

I am looking for some papers/references that showcase theoretical economic models that incorporate pandemics. Most work seem to be purely empirical. Does anyone know of some papers that try to model ...
• 42.1k
72 views

### Economics perspective of connected workers

According to the Deloitte report published here, a connected worker is defined as someone whose working life is changing due to digital and other technologies. This is due to advancement of ...
• 113
1 vote
58 views

### Where can I find economics theories to learn about? [closed]

I'm a beginner to economics so I do not have much knowledge. However, I enjoy learning new economics theories. For now, I normally search for economics theories by looking at those that won nobel ...
1k views

### What is the point of all the models in an economics degree?

I am a student of Economics doing my masters degree and I have to say I am a bit tired of all the models. On the one side, there is these models where I can see how they are derived, which always ...
• 331
Let $\succsim$ be a transitive and reflexive relation on a metric space $X$ with closed upper and lower contour sets. If $\succsim$ is not complete, does it hold that: for all converging sequences ...
Given the following two conditions: $x\succ y$ implies $x+a\succsim y+a$, And, $x\prec y$ implies $x+a\precsim y+a$ We want to prove that $\succsim$ is a linear preference. One of the ...