# All Questions

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34 views

### Ability drawn from different distribution

My problem has two individuals who are unaware about their ability and learn whether they are high able or low able through promotion. High ability variable is denoted by $a$ and is drawn from ...
21 views

### Profit maximization; how to derive

Can someone expalin me the math process step by step behind this? I haven't been able to figure it out and I cannot find anything in google
13 views

### (Mechanism Design | Mailath Exercise 10.5.3) A Question

Hi, everyone! I'd appreciate some help with this problem, please. Suppose that a seller puts a one-unit good on the market, and a buyer comes around with an unknown valuation $θ$. This buyer has a ...
27 views

### Has mathematical economics contributed to the mathematics of space exploration?

We see the work of Bellman showing up in both orbital trajectory planning/optimization and, obviously DSGE modeling. Also, in a recent example, the JWST uses ideas surrounding Pareto optimization and ...
14 views

### How do I argue that "prices aggregate beliefs" in this Walrasian equilibrium?

Consider an $n$ person economy with only 1 good and 2 states of nature $r,s$. Consumer $i$'s utility function is $$u_i(x_{ir},x_{is})=\pi_i \ln x_{ir}+(1-\pi_i)\ln x_{is}$$ where $\pi_i\in (0,1)$ is ...
26 views

### Meaning of "determines"

In macroeconomics I come across lot of sentences like In the short run, demand determines output. In the short run, the central bank determines the interest rate. In the short run, output is ...
1 vote
31 views

### How to find the Walrasian eqilibrium and determine the welfare?

Suppose there are 2 farmers. Farmer 1 grows rice and farmer 2 grows wheat. There are 2 states of nature tomorow: rainy or sunny, both with probability 0.5. If it rains, farmer 1 grows 1 unit of rice ...
8 views

### How does the sum of a chain linked prices series for the chain linked year equal exactly the sum of the same year of the current prices series

Above are the current prices GDP and chained 2015 prices GDP for South Korea The chained 2015 prices figures for each quarter don't match the current prices series for the period of 2015 (the chain ...
23 views

### If Milei is able to apply his economic plan during the next decade, what are the chances of Argentina becoming (once again) a major economy?

Once Argentina was one of the strongest economies in South America. It is pretty clear that the economic model that made Argentina successful then does not stand a big chance to work again. Javier ...
44 views

### How to find a Walrasian Equilibrium under uncertainty?

Two farmers: 1 grows rice(r) and 2 grows sunflowers(s). Today: complete markets. Two states of nature tomorrow: rain and sun. If rains, farmer 1 has 1 rice and farmer 2 has 0 output. If sun, farmer 1 ...
30 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 [...
1 vote
34 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 ...
18 views

### 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 ...
57 views

### 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
33 views

### 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 ...
7 views

### 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,...
78 views

### 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?
27 views

### 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, $B$ ...
16 views

### 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 ...
28 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 - &...
37 views

### 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). ...
22 views

### 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, ...