# All Questions

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7 views

### Mean preserving spread of a lottery

Suppose G is a lottery where the payoff is equal to -1 with 0.5 probability and 1 with 0.5 probability. I'm trying to show that G is a mean preserving spread of a lottery with uniform distribution on [...
13 views

### Is it possible to maintain economic equality in a society?

If the governor (or administrator) of a small town decides to keep the town economically equal by taking away the wealth of all residents and then redistributing it equally among the residents. In ...
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### Long Run Model of Oligopolies After Recession

I am currently investigating about the long run impact of the COVID 19 to the US airline industry. Is there any specific (long-run) model that I can use for oligopolies (for 4 main companies)? Because ...
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### In revealed preference (RP), is any two points $x,y$ related by the indirect revealed preference relation?

Let $X$ be the closed compact convex set of alternative and $B$ be a closed compact convex subset of $X$. $C$ is defined on all closed compact convex set $B\subseteq X$. $X$ is ordered by a strictly ...
1 vote
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### Conditions for an interior solution to the UMP

I was wondering under what set of conditions one is allowed to assume an interior solution to the Utility Maximisation Problem. In most of my classes and lecture notes, interior solutions are assumed ...
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### Ordered Logit Model: Marginal Effects Signs Opposite

I'm deeply stuck in an issue in my research paper's methodology. I'm getting the following disparate results for my marginal effects. In my Ordered Logit model, I have Y = Trust in banks (4-Max trust,...
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### Why does the Substitution effect always have to be negative?

I understand why the income effect can be positive or negative depending if the good is normal or inferior. but why does the substitution effect always have to be non-positive?
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### Why does the voter paradox entail 0 turnout?

The decision to cast a vote (under a simplistic FPTP two-candidate model), as formalised by Downs can be written as follows: $pB \geq C$ where $p$ is the probability of you changing the outcome, $B$ ...
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### Good tutorial on constrained optimization with state switching (macroeconomics)?

I am looking for some tutorial (website, book, video or even answer that explains it directly) that explains how to solve dynamic constrained optimization problem with state switching. Preferably the ...
26 views

### What is the issue in mapping verbal concepts to math symbols without proper justification, in economics?

I am really sorry for the vague question. I was going through some research on excessive math in economics, and I stumbled across this thread Criticism of Math in Economics One of the comments was - &...
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### A question about an exercise in Hal R. Varian, Microeconomic Analysis (1984), Ch.3 Exercises 3.1 (c), Page 48

I have a question on the following exercise: A competitive profit-maximizing firm has a profit function $\pi(w_1, w_2) = \phi_1(w_1) + \phi_2(w_2)$. The price of output is normalized to be 1. (c). ...
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### Find a choice function such that WARP or SARP is violated

WARP implies choice function is raionalizable. Say we have a choice function $C(B)$, $B$ is a closed convex compact set. I am looking for a intuitive example of $C$. The $C$ is economic meaningful, ...
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### Equilibrium asset prices of a risk-free bond and a stock

Setup: Two-period economy with two equally likely states of the world in the second period. Two consumers with Bernoulli utility and same discount factor