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 ...
Giskard's user avatar
  • 29.3k
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 ...
emeryville's user avatar
  • 6,935
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 -...
Jason Nichols's user avatar
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. ...
Regio's user avatar
  • 4,188
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 ...
1muflon1's user avatar
  • 55.6k
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 ...
manifold's user avatar
  • 831
7 votes
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Are logarithmic values ​used in finance?

Logarithmic values are used very frequently. financial modelling and statistics often use logarithmic values for its properties logarithmic scales are used to display long term (exponential) growth (...
AKdemy's user avatar
  • 4,092
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 ...
Alecos Papadopoulos's user avatar
6 votes
Accepted

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 ...
Herr K.'s user avatar
  • 15.4k
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 ...
Giskard's user avatar
  • 29.3k
6 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 ...
Bayesian's user avatar
  • 5,280
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-...
Dolphin 613 Motorboat's user avatar
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 ...
Giskard's user avatar
  • 29.3k
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. ...
VARulle's user avatar
  • 6,735
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) ...
Bayesian's user avatar
  • 5,280
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" (...
Dawson A. Verley's user avatar
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 ...
pegasus's user avatar
  • 151
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 ...
luchonacho's user avatar
  • 8,591
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 ...
EconJohn's user avatar
  • 8,305
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 ...
dsmithecon's user avatar
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 ...
EconJohn's user avatar
  • 8,305
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 ...
Dolphin 613 Motorboat's user avatar
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 ...
1muflon1's user avatar
  • 55.6k
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 ...
1muflon1's user avatar
  • 55.6k
5 votes

Definiton of information sets in rational expecations models

Two notes. A. "Conditioning on information" has always been applied in economics without much attention to probability theory-rigor, because it has (indeed) such a strong intuitive sense: &...
Alecos Papadopoulos's user avatar
5 votes

Can we rank stochastic dominance of distribution functions that belong to the same class?

Let $X_b$ a random variable uniformly distributed on $[b,2]$ with $b<2$. For every $x\in\mathbb{R}$, $$\mathbb{P}[X_b\geq x]=\begin{cases} 0\text{ if }x>2\\ \frac{2-x}{2-b}\text{ if } b\leq x\...
Michael Greinecker's user avatar
5 votes
Accepted

What are some alternative words for "cartel"?

I don't think an exact synonym exists. There are words that describe a type of cartel. You could use trust or combine, if the cartel is legal and known. You could use syndicate in case of illicit ...
Giskard's user avatar
  • 29.3k
5 votes
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Is "avoiding being the bearer of bad news" an example of the "principal-agent problem"?

I think it is. Intelligent economist site states: The Principal Agent Problem occurs when one person (the agent) is allowed to make decisions on behalf of another person (the principal). In this ...
WilliamT's user avatar
  • 1,785

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