Questions tagged [theory]

The tag has no usage guidance.

Filter by
Sorted by
Tagged with
1
vote
1answer
181 views

Difference between LMSR and Liquidity-Sensitive LMSR

What is the difference between the LMSR (logarithmic market scoring rule) and the Liquidity-Sensitive LMSR (LS-LMSR) and what would cause prediction markets like Augur to focus on the later model?
4
votes
2answers
748 views

Do contemporary Marxist economists still deny the utility/value theory which underpins classical economics?

Do contemporary Marxist economists still apply the labor theory of value when analysing economic phenomena? Or do they e.g. acknowledge that value (and utility) is subjective as is common knowledge in ...
-1
votes
1answer
398 views

What consumer preferences exhaust the budget?

Suppose that a consumer has a complete and transitive preference relation over R+. Further suppose that the consumer faces prices p = (p1,p2,...,p) 0 and has ...
2
votes
2answers
76 views

Economic Confirmation Biases

I'm not sure if this is the right place to post this, since my question is a bit more general to all of social sciences (indeed sciences in general), but I figured since Economics is a social science ...
2
votes
2answers
188 views

How to theoretically explain an exponential income distribution?

I have been working on income distributions for a while, and I've been asked to do a theoretical justification for the idea that income distribution follows an exponential function for low incomes. ...
7
votes
3answers
1k views

Core elements of Marxist Economics

I am interested in understanding the differences between mainstream economics and marxist economics. For that, a guide about what is central to the marxist economic theory (not political or cultural ...
0
votes
2answers
83 views

Are there strains of economics that are “no (political) economics”? [closed]

To support my belief in the arbitrariness of economic theory and thought, since different economic systems have their own rules, theories etc., which contradict the rules of other systems and which ...
1
vote
1answer
280 views

Transforming expected utility functions

I am using the following theorem: To better understand how I can transform expected utility functions. An example with which to work: I want to show that the preferences represented here satisfy ...
2
votes
3answers
848 views

Jokes in Economics; Challenging Assumptions in the Dismal Science [closed]

We've delved into questions about the history of economics. We've pondered what the most important equations in economics are. But in every science, academic culture inevitably forms a special set of ...
1
vote
0answers
36 views

Limits of utilitarianism?

In all of economics that I know, people maximize their Utility $U_i=f(x_1,...,x_n)$, and therefore make some kind of cost-benefit analysis. One obvious criticism to this model is that we often do not ...
1
vote
1answer
27 views

Static wage posting model and indifference to wage levels

Suppose a monopsonistic firm has the following simple profit function: $$\pi (w) = PL(w) - wL(w) $$ where $L(w)$ is the labor supply, $P$ is the constant output price, and it has a linear production ...
1
vote
1answer
78 views

Theories relevant to institutional quality and economic development [closed]

I want to write a term paper on institutional quality and economic development. What will be its possible theoretical framework?
1
vote
1answer
265 views

On closedness: commodity space

In Intriligator (2002, p. 143) we find the following statement: \begin{align} C = \{(x_1,x_2,\ldots,x_n) : x_j \geq 0,~j=1,2,\ldots,n\} \subset [0,\infty)^n \end{align} Thus commodity space ...
4
votes
1answer
38 views

Prediction market based on LMSR: Sell, or buy other side?

Consider a prediction market with two outcomes (Yes and No) and a scoring rule based on Hansons’s LMSR, i.e. ln(ea+eb), where a and b are the number of Yes resp. No shares sold. Assume that I have ...
1
vote
1answer
178 views

Have any economists ever argued that the notion of opportunity cost should be done away with?

I hold the opinion that the notion of opportunity cost "muddies the intellectual waters" so to speak, and I'd like to know if any professional economists have expressed this sentiment, or similar. ...
2
votes
1answer
172 views

Any information on a toy economy with 3 types of agents in it

I was thinking about a theoretical economy where there are 3 types of roles for the agents. They can be : workers : produce good A criminals : steal good A cops : protects good A without going into ...
5
votes
1answer
195 views

What term/theory describes more efficient utilization of a resource?

I may be asking the wrong question here, but I wonder if there is a term/theory that describes/studies the evolution of an economy that continually improves the utilization and allocation of certain ...
1
vote
1answer
472 views

How is signaling theory different from cue utilization theory?

I think they are quite similar. I am a bit confused. Can anyone explain this to me? I got the name and the information about the cue utilitarian theory from a journal article that related to organic ...
1
vote
1answer
123 views

Will the goods market be in equilbrium along the AD curve?

This is a question which was asked in the entrance to Jawaharlal Nehru University's (New Delhi) entrance for their post-grad program specializing in International Economics in 2014. Which of the ...
5
votes
2answers
176 views

Why the total value of the whole economy is constantly appreciating?

Take S&P for example. In the long run it just keeps climbing. Same for the market as a whole. Why would this happen? Why the market keeps going up (in the long term) all the time? (source)
2
votes
1answer
169 views

Is Capitalism dying or will it prevail? [closed]

During the last decades there has been an increase of anti-capitalistic movements around the world which are fundamentally different from those of the XIX-th and XX-th centuries in the sense that they ...
6
votes
1answer
104 views

Looking for the title of a short (~100 page) Herbert Simon book about “Bread-bricks”

I'm trying to find a short (~100 page) book by Herbert A. Simon in which he presents a simplified economics in which there is only one item of value and it is called the 'Bread-brick'. One can eat a ...
3
votes
1answer
161 views

Derive marginal productivity conditions in DW Jorgenson paper

I'm reading Jorgenson, Dale W. (1963), "Capital Theory and Investment Behavior", American Economic Review. Vol 53, No. 2, pp. 247-259. http://www.jstor.org/stable/pdfplus/1823868.pdf I would like ...
2
votes
1answer
423 views

Intuition behind the linkage principle

An important result in auction theory is Milgrom & Weber's linkage principle, which, roughly, holds that the expected revenue from an auction is higher is the seller commits ex ante to reveal as ...
8
votes
2answers
350 views

Does economic theory support the notion that the wealth of the wealthy is based on the poverty of the poor?

Almost any discussion about poverty and wealth and income inequality at some point includes arguments based on the premise that the wealth of the wealthy is causally related to the poverty of the poor;...
6
votes
1answer
142 views

State of general equilibrium theories Post Blanchard 2008

This question arose from a useful comment I received upon answering a question on this site, and a recent question from a doctoral student. The so-called theory of general equilibrium (including the ...
3
votes
2answers
151 views

What are the economic justifications of the size premium?

What are the economic justifications of the size premium? In factor pricing models like the intertemportal capital asset pricing model (I-CAPM) or arbitrage pricing theory (APT), it is assumed that ...
9
votes
2answers
993 views

When can one safely talk about decreasing marginal utility?

One thing I hear a lot is talk of decreasing marginal utility—the idea being that additional units of a good become progressively less attractive the more units of that good one has already. However, ...
11
votes
3answers
277 views

Influential Theory in the Economics of Poverty

As far as I can tell, research on the economics of poverty is very empirically driven, and this is probably appropriate. What kind of economic theory has been developed though? I'd also be interested ...
2
votes
2answers
98 views

Utility and the tyranny of a minority

Follow on to this question. Using similar constraints: The constraints regarding the system I'm modeling are (and looking for a general solution to): Marginal Utility for every unit of a ...
14
votes
5answers
806 views

Are there Utility Monsters in Economics?

Economics, especially in the modern school is broadly influenced by the utilitarian concept of utility. More so since the labor theory of value has been broadly replaced by the theory of marginal ...
11
votes
3answers
355 views

What are the recent advancements in building a unified theory of bounded rationality?

It seems that bounded rationality models focus on explaining a particular psychological bias, in a very specific way. In particular, its seems that the state of the art consensus is that one size does ...
8
votes
3answers
558 views

What are some theoretical explanations for deviations from the efficient market hypothesis?

According (the semi-strong form of) the efficient market hypothesis, the price of an asset should reflect all publicly available information about the 'fundamental value' of that asset. The reasoning ...

1
2