All Questions
15,514
questions
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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 ...
- 499
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votes
1
answer
21
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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
- 1
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13
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(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 ...
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2
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27
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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 ...
- 21
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14
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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 ...
- 103
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1
answer
26
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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 ...
- 141
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31
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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 ...
- 375
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8
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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 ...
- 1
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0
answers
23
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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 ...
- 101
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44
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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 ...
- 41
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votes
1
answer
30
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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
1
answer
34
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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 ...
- 11
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0
answers
18
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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 ...
3
votes
1
answer
57
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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 ...
- 1,866
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1
answer
33
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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 ...
- 13
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7
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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,...
- 1
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1
answer
78
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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?
- 1
2
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0
answers
27
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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, $B$ ...
0
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0
answers
16
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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 ...
- 244
3
votes
1
answer
28
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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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1
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37
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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). ...
- 75
2
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0
answers
22
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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, ...
- 1,866
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1
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103
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How to show there is no a Walrasian equilibrium?
There are 3 agents, one seller and two buyers. There are two indivisible goods, apple(a) and banana(b), and one divisible good, money(m). The seller's endowment is $W_s=(1,1,0)$, and buyers's are $W_{...
- 41
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5
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Can I use secondary data to run LA AIDS model in R
Can the Almost Ideal Demand System analysis be done using secondary data
0
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0
answers
34
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how to derive that golden rule steady state = alpha in the solow model?
I have successfully derived the Golden Rule steady state for capital, but I'm struggling to derive the saving rate = equal to alpha (α) for the Golden Rule level. Have I made an error in my ...
0
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0
answers
56
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Who is a personal computer buyer in 80s?
There are many materials devoted to the rise of the personal computer industry. Some of them focus on technic aspects. Like "IBM PC was cheap and has open arcitecture. So it won Atari, Commodore ...
- 153
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0
answers
37
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Variance of OLS Error Variance Estimator
Consider a model $Y=X\beta+e$ and define the OLS error variance estimator as $\hat{\sigma^2}=1/n\sum_{i=1}^n \hat{e}_i^2$, assuming that $ E[e_i^2]=\sigma^2 $ More precisely I want to derive the ...
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0
answers
23
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Why has the price of laser eye surgery not changed?
Within the USA, I have long heard rumors that since laser eye corrective surgery is not often included in insurance plans or subsidized by governments, the price of laser eye has remained relatively ...
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1
answer
29
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Can FOSD-transitivity replace the transitivity in utility representation theorem?
Let $\succsim$ be a complete, non transitivity preference relation. I wonder if FOSD-transitivity implies transitivity.
The primitive is the space of lotteries $p_1,p_2,p_3,...$. We say the preference ...
- 1,866
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1
answer
33
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Can a Subgame Perfect Equilbrium consist of a weakly dominated action?
I was reviewing the Market Entry game and observed that 'being mean to the entrant' is weakly dominated by 'being nice to the entrant.' Coincidentally, 'being nice to the entrant' is also part of the ...
1
vote
1
answer
14
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What is the meaning of "Nominal GDP was converted to 2021 dollars using the GDP Price Index" in ERP 2023?
Reading the Economic Report of The President 2023, there is a note under the real GDP graph stating: "Nominal GDP was converted to 2021 dollars using the GDP Price Index"
What I understand ...
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0
answers
25
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Deriving the tax incidence formula -- what am I doing wrong?
I'm trying to derive the tax incidence for an excise $t$ so that producers receive $p$ and consumers pay $q=p+t$ per unit. The formula I am seeing everywhere is some version of
$$
\frac{\mathrm{d}p}{\...
- 111
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votes
1
answer
21
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Internationalization of Chinese Yuan, and Chinese exports?
If Chinese Yuan is internationalised and more countries use it to settle payments, then wouldn't that cause strengthening of Chinese Yuan and make Chinese exports uncompetetive ?
- 1
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0
answers
65
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About Theorem 3.5 (The Finite-Approximation Theorem) in Game Theory: Analysis of Conflict by Roger Myerson
I am study infinite strategy set using Myerson's Game Theory textbook. The author stated the following theorem (Theorem 3.5) but did not prove it. I tried the proof, and would really appreciate it if ...
- 251
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0
answers
38
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What is a very very famous example of structural estimation?
I took a behavioral econ class and learnt the "structural estimation" of risk-aversion parameter.
Later some friends told me that what I learnt is too simple when I was bragging about my ...
- 259
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0
answers
44
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Durable goods in a (two sector) necolassical growth model
i want to add a firm to a neoclassical growth model that produces a durable good which it rents out in each period to the consumers.
Right now i'm using the following approach:
The firm maximizes: $\...
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0
answers
21
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Heterogeneity analysis for a randomised experiment
Suppose that you are planning a randomised experiment and will estimate how effects vary with baseline covariates. One simple approach uses interactions. That is, if $Y_i$ denotes the outcome of ...
- 856
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0
answers
25
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Definition of semi-elasticity
The "$x$-elasticity of $y$" is defined as $\epsilon = \dfrac{\partial y/y}{\partial x/x}$.
The $x$ goes down, and the $y$ goes up.
But we have two definitions of semi-elasticity:
$\epsilon_1 ...
- 123
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0
answers
60
views
1
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0
answers
47
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How can I find a Radner equilibrium?
Consider an economy with 2 consumers and 1 good. There are 2 dates, date 0 and date 1. At date 1 there are 3 states of nature. The utility functions for the 2 consumers are the same:
$$u_i(x_i)=\frac{...
- 375
1
vote
1
answer
26
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Total cost and public cost of sports stadiums
I'm interested in doing data analysis on the cost of large sports stadiums (in the US). I have an excellent data source in "Financing Professional Sports Facilities" (Robert A. Baade, Victor ...
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vote
0
answers
13
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Credit profile bank dataset for Machine learning
Can you advise please any credit profile Bank free available datasets for Markov chain and machine learning computational experiments? For my student masters thesis. Thank you.
- 11
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0
answers
4
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Aggregate elasticity of demand in a differentiated products market
Is the notion of aggregate elasticity of demand applicable in a market for slightly differentiated products? Intuitively, it seems like it should. If market output can be expressed in a single number (...
- 1
1
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1
answer
53
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If utility function is convex, what can be said about preference relation?
It is known that if a utility function is concave, then it is quasiconcave, and the preference relation is convex.
What can be said if a utility function is convex?
I've found on the Internet then in ...
- 125
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1
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37
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About infinite strategy sets and $\epsilon$-equilibrium from Game Theory: Analysis of Confilct by Roger Myerson
I am studying infinite strategy sets using Myerson's Game Theory: Analysis of Conflict. On Page 143, he defines an $\epsilon$-equilibrium as follows:
Definition For any nonnegative number $\epsilon$, ...
- 251
1
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1
answer
70
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If utility function is homogenous of order 1, then partial derivatives of demand function are equal
Prove that if $U(\alpha x)=\alpha U(x)$, then $$\frac{\partial x_i(p,w)}{\partial p_j}=\frac{\partial x_j(p,w)}{\partial p_i}$$ for any $i$ and $j$.
I've proved that $x(p,\alpha w)=\alpha x(p,w)$, but ...
- 125
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0
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33
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Second-degree price discrimination exercise
A monopolist produces output with constant marginal cost equal to 1. There are two of
consumers that are potentially in the market for the good. Consumer A has inverse demand
function
$$p_A(x) = 7 − x,...
0
votes
1
answer
19
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Marginal and Average costs for constant returns to scale production function being constant
Suppose that we are dealing with a production function $q = f(k,l)$, of inputs capital and labor. If this function exhibits constant returns to scale then I know that both the marginal cost and ...
- 1
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0
answers
19
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Engine efficiencies on small scale ( ice engines vs turbines
A formula one engine is around 51% efficient (and if it weren't for the regulation and rules it might have been close to 55 to 60% efficient read somewhere in Google) that the extreme side but there ...
0
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1
answer
36
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Showing UMP and EMP do not exhibit duality if the assumption of local non-satiation is absent
I have been trying to use the contradiction method to prove this, but it does not seem to be working.
Suppose $x^*$ is optimal in both EMP and UMP. Then $u(x^*) \geq u(x')$ for all $x'$ in $B_pw$.
And ...
