12 votes

What precisely is scarcity?

Your formula $\mu = \sum\limits_{i=0}^n x_i$ just denotes the total amount of goods, so this just means that $\mu$ units were distributed among $n+1$ agents. Scarcity (in this context) means that no ...
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  • 26.7k
8 votes

Is 'full employment' synonymous with 'the natural rate of unemployment'?

Full employment is a more general term, which has much less implication than natural rate of employment. My experience reading a lot of economics papers is that careful authors do not mix the two ...
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  • 1,246
8 votes
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What is an econometrician?

An interesting question that leads to a debate among econometricians. Some consider that Econometrics is just statistics applied to economic problems Econometrics is just statistics applied to ...
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  • 6,662
7 votes
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What is the difference between gross, operating, net profit and EBIT(DA)?

So, here goes: Gross Profit = Revenue - COGS (Cost of Goods Sold) If you bought an orange for a dollar and sold it for two, you have one dollar of Gross Profit Operating Profit = Gross Profit - Labor -...
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7 votes
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Meaning of $dF(z)$ in expected utility framework

Not all cdf’s have a density function, (for example if $F$ is not differentiable). However, when they do have a density, the notation $dF(z)$ is equivalent to $f(z)dz$. When performing integrals. ...
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  • 4,158
7 votes

What makes a company too big to fail?

In economics Too Big To Fail (TBTF) can have slightly different meaning depending on what research you are looking at but generally speaking literature seems to agree that what matters is how ...
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  • 43.6k
7 votes

$I(g)$-terminology

It's hard to tell without more context. But mostly sure it means "$Z_t$ is integrated of order $g$", i.e. $\Delta ^g Z_t=(1-d)^gZ_t$ (where $d$ is the lag operator) is stationary, in other ...
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  • 717
6 votes

Economies of Scale vs Learning Curve

Consider a production function $$y = F(A,K,L)$$ where $A$ represent "technology" (in the broad sense including for example also organizational technology), $K$ is capital and $L$ is labor (again ...
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6 votes

What does 'intelligent money' mean?

"Intelligent money" or "smart money" is not an economic term per se, but a finance term. It is colloquially used in the finance industry to describe the collective group of individuals who are paid ...
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  • 259
6 votes
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"Competitive equilibrium" vs. "General equilibrium"

Competitive Equilibrium A competitive equilibrium ("Walrasian Equilibrium")'s defining characteristic is that it's competitive. It's about an equilibrium in which market forces (say, consumers, firms)...
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  • 10.4k
6 votes
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Is "management science" a subsection of economics?

The journal Management Science is a decent one. Many economists do publish on that journal. In fact, a quick look at its editorial board reveals many notable names, with the recent Nobel laureate in ...
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  • 14.6k
6 votes
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Is there a general name for the setup in which payoffs are not known exactly but players try to influence each other's perception of the payoffs?

What players are trying to do is always up for interpretation, it is not coded into the mathematics of game theory. The madman strategy can be modelled as a Bayesian game, with different types ...
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  • 26.7k
6 votes
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Are social goods and public goods the same thing?

I guess it might depend on the author. Here's another classification: The classifications of public goods associated to agriculture identify two main categories: environmental goods and non-...
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  • 3,728
6 votes
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What's the opposite of a Pareto improvement called?

I usually use the phrase "Pareto worsening". It is not really widespread, in fact I am not sure I have ever heard anyone else use it. However now I googled it and people seem to use it in connection ...
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  • 26.7k
6 votes

What's the difference between Ex-post Incentive Compatibility and Dominant-Strategy Incentive Compatibility

In Def. 3 of the paper you link to, EPIC is not "defined as truth-telling is the best strategy no matter what the others do". What the $-i$-agents report is held fixed at $\theta_{-i}$, i.e. ...
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  • 4,589
6 votes
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What's the difference between Ex-post Incentive Compatibility and Dominant-Strategy Incentive Compatibility

I think the right paper here is Jehiel, Meyer-ter-Vehn, Moldovanu and Zame (Econometrica 2006): The Limits of ex post Implementation. Take a direct mechanism. Ex post incentive compatibility (EPIC) ...
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  • 5,090
5 votes
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What's the term for consumers not being able to pay their mortgage?

Not paying a mortgage is first known as delinquency (when payments are missed) and later, default (when the loan is written down and the lender seeks foreclosure). But an inability to pay has no ...
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5 votes
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What is the difference between a Start-Up and a small company which is not a Start-Up?

Probably, there's no clear-cut definition, however, there's an article of Paul Graham called Startup=Growth which represents the opinion many agree upon: startup is a company that plans to grow fast (....
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  • 286
5 votes

Is there a name for this family of games (Binomial games?)?

OK, Erel Segal Halevi's comments have placed me on the right track for finding what I was looking for; This family of games is called "Resource Selection Games", and it has quite a few papers ...
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  • 620
5 votes

Confused by the Term "Welfare Relative to Full Information Welfare"

What it means is the following: Consider the same bargaining game played by two players that are fully informed (i.e. the buyer is also informed about the value of $q$). Then find the equilibrium of ...
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  • 151
5 votes

A guide to hyphenation in economics?

Plamen Nikolov of Binghamton University presents a brief treatment of this in "Writing Tips For Economics Research Papers". He notes that there are two basic rules of economic usage: "Long run" (...
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5 votes
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Teaching changes in "demand" v. "quantity demanded"

I think the terminology below is pretty unambiguous and also common: a shift in the demand curve to refer to movements from $D$ to $\tilde D$ (using shift is quite more specific than using ...
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  • 8,477
5 votes
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Is the arable land a mean of production?

Yes. Anyone who utilizes their privately owned property or assets as a means of production for the sake of profit is a capitalist. In this case the farmer's capital is the land which they use for ...
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  • 7,725
5 votes

Intuition Behind the Definition of Prudence?

From the Wikipedia article: Economists describe a consumer as "prudent" if he or she saves more when faced with riskier future income. This additional saving is called precautionary saving. For ...
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5 votes
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What does Marx mean by "the division between capital and labor"?

Two main changes happened when capitalism came into existence these being the ability to buy and sell property among the peasantry. Under the feudal system each household was endowed land which was ...
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  • 7,725
5 votes
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What is the “entry price” in relation to tariffs?

Entry price system (EPS) is a EU-specific term relating to their food import tariffs, more specifically to fruits and vegetables. It's a somewhat complicated system designed to strongly discourage ...
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  • 3,728
5 votes
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Why is it called Bayesian Persuasion?

In a standard cheap-talk setting, a sender (S) has better information on a state of the world and wants to communicate this information to a receiver (R) who then takes an action. However, S and R ...
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  • 5,090
5 votes

What is the average percent of value an employee makes which he gets on salary (called)?

You are most likely looking for labor or wage share defined as the ratio of labor costs to nominal GDP. It basically expresses how much share of nominal GDP gets captured by labor. You can find the ...
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  • 43.6k
5 votes

Is the use/consumption of natural resources considered an externality per se?

Use or consumption of natural resources is not in mainstream economics considered as an externality per se. First of all the quote from Mankiw is probably from undergraduate textbook and taken out of ...
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