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Two areas that have been profoundly affected by game theoretic research stemming from Nash's contribution are Oligopoly theory There are actually a few examples of what would come to be known as Nash equilibrium in the industrial organization literature that predate Nash's work (for example, Cournot's 1838 analysis of oligopoly competition). However, until ...


11

You're not alone in your skepticism of the relevance of game theory. Some of the greats, including Gary Becker, were at times dismissive of the practical/empirical importance of game theory (see the introduction/preface of his Economic Theory book). No doubt it is in a way foundational to the economic sciences (see Myerson's great essay on Nash's ...


10

This is only half a joke : Nash-equilibrium gives a very good prediction on the relative size of groups of foraging ducks on a pond when two food sources are established at opposite sides of the pond. A very good explanation can be found at https://headbiotech.wordpress.com/nash-equilibrium-example-on-ducks/, among other places (https://headbiotech....


8

The primary literature concerned with this type of question (at least where classical results break down) is behavioral economics. There's a great general compilation of papers put together by the Russell Sage Foundation called the "Behavioral Economics Reading List" that includes, among other things, a General Introduction section with overview papers by ...


5

I didn't see the evidences on the recent European immigration, but the event is similar to the Mariel Boatlift story in Card (1990): The Mariel immigrants increased the population and labor force of the Miami metropolitan area by 7 percent. Most of the immigrants were relatively unskilled: as a result, the proportional increase in labor supply to less-...


5

Yes, you should look at the regression discontinuity literature in political economy that uses close elections as the identification strategy. For example, see http://sekhon.berkeley.edu/papers/CaugheySekhonRD.pdf and http://www.polmeth.wustl.edu/media/Paper/EggersetalRDD.pdf


5

The recent development of many "developing countries" and "emerging markets" does not mean that Western colonial powers did not exploit them in the past. Emerging economies owe their modern GDP growth to cheap labor, as (former) Western colonial powers switched their (expensive) manufacturing bases to countries like China, India, etc. In the past, they were ...


5

Well, certainly you'll see literature saying it is possible to make monetary redistributive. This paper by Brunnermeier and Sannikov (2012), Redistributive Monetary Policy, says that deflation can cause redistributive effects in an economy, and that monetary policy can be used to correct that, but "shouldn't" be used as a redistributive tool beyond that ...


4

To complement @rocinante answer the argument described in the question silently assumes that growth can happen only if you steal from somebody. So if the past colonies cannot steal from anybody, they are bound not to ameliorate their material welfare. Assume two persons, $A$ and $B$, that currently have the same unexploited resources. It so happens that in ...


4

For example, "Assessing the Impact of the Maternity Capital Policy in Russia" (2014): Starting in 2007, the federal government has pursued an ambitious pro-natalist policy. Women who give birth to at least two children are entitled to "maternity capital" assistance ($11,000). In this paper we estimate a structural dynamic programming model of fertility ...


4

Have there been any empirical attempts to estimate the value of being taught specific skills - for example, phonics or solving algebraic equations? If I may be brazen enough to challenge the basis of this question. We first need to have an economic criteria to evaluate a subject in a curriculum before we start analysing its relevance to the labour market . ...


4

Here is a fact sheet by the OECD about the effects of competition. It is mostly concerned with growth and productivity, but also discusses the effects on poor consumers and prices. It cites a wide range of empirical studies that you might find of interest. https://www.oecd.org/daf/competition/2014-competition-factsheet-for-print-en.pdf OECD, Factsheet on ...


3

The easiest generalization, of envy free sharing of a heterogeneous cake between two cake eaters is quite common. My family growing up frequently used the you divide and I choose method for sharing a lone piece of dessert. Depending on what you'd accept for "concrete example", Abraham and Lot use this method to divide the land of Canaan. A two-stage fair ...


3

Neumark and Wascher have a paper that surveys recent empirical work on the effects of the minimum wage in detail. It includes a number of tables that nicely summarise the results of a large number (102!) of studies. They conclude the paper with the following remarks: Nonetheless, the oft-stated assertion that the new minimum wage research fails to ...


2

A napkin theoretical exploration of the issue, to find possible directions to look for explanations, could go like this: According to the paper, the volatility of output and productivity has fallen. So for the correlation to have gone down, the covariance must have fell steeply. Modeling output as $$Y = AK^a(h\cdot L)^{1-a}$$ where $h$ is the "effort ...


2

My reading is yes, it is procyclical in levels and margins. This paper uses industry and firm data to look at price cost mark-ups and firm profit margins in U.K. manufacturing and services. In particular it examines how they behave over the business cycle. It has two main findings. First, the estimated average mark-ups and the profit margin ...


2

I'll do the opposite and tell you something that we do not know a lot about: The elasticity of substitution between consumption and leisure. While many Macro models provide calibrations for that, there is no - as far as I know - proper econometric exercise based on micro data that gets to this value.


2

Another interesting issue could be on intertemporal elasticity of substitution and risk aversion. There are lots of experimental studies that you can find easily on econbiz or in similar websites. Also some other interesting studies focus on time inconsistency. You can find some famous articles by Laibson and Hepburn.


2

Applying the Law of Iterated Expectations on the defining property of a sub-martingale $E(X_{t+1}|X_1,\dots,X_t)\ge X_t$ we have that $$E\Big[E(X_{t+1}|X_1,\dots,X_t)\Big]=E(X_{t+1}) \geq E(X_t)$$ So a sub-martingale has also its unconditional expected value non-decreasing. Therefore any economic variable that appears to consistently increase in value is a ...


2

I'm not really an expert on the subject, but for welfare reforms I've been suggested to read Grogger and Karoly: "Welfare Reform: Effects of a Decade of Change" (2009) in the past. I believe it tackles at least some of the subjects you're thinking about and might be a good place to start.


2

Are Wages Procyclical? Here's the entry from Table 1 in King and Rebelo (2000; Resuscitating Real Business Cycles). The variable of analysis is log-wages, detrended with HP filter. It has a std, relative std, first-order autocorrelation and correlation with output of 0.68, 0.38, 0.66, 0.12. This leads the authors to conclude that The real wage is much ...


2

That that we have linear supply and demand functions, pretty much the simplest case such that quantity supplied of good $i$ is: $$ Q_{s,i,t} = \alpha_{0,i,t} + \alpha_{1,i,t} \cdot P_{i,t}$$ and quantity demanded is: $$ Q_{d,i,t} = \beta_{0,i,t} + \beta_{1,i,t} \cdot P_{i,t}$$ In equilibrium $Q_{i,t}=Q_{d,i,t}=Q_{s,i,t}$ so substitute and solve: $$ Q_{i,t} ...


2

Normally when we think about value added, we think of marginal revenue product of labor: how much more revenue does adding another worker add to the firm? If you assume that the market is competitive, then the MRPL should be exactly equal to what you said: wage, benefits, etc. Otherwise another worker would be willing to work for an epsilon less. In other ...


2

Sorry for any confusion in my previous answer but there are 2 steps to this process 1) tracing out the impact on the $\Delta$y's and the lags of the shocks and then 2) accumulating the shocks to get the cumulative response (Note that my original answer tried to do this simultaneously). So in the first step (ignoring the intercept, the dummies and the ...


2

The most likely explanation for discrepancies that political partisans like to pick at is that presidents like to cite different measures of unemployment. The BLS has 6 alternative categories of labor under-utilization. The U-6 measure of unemployment with seasonal adjustment stands at 9.7%. Although the official rate may be under 5% as in the BLS's ...


2

This is sort of my field, tough I focus more on education. One explanation that seems to fit the data is that the american labor market now is incorporating benefits and variable pay, so wages should decouple from productivity if total compensation doesn't - and voi lá, that's whats happening. One reason, perhaps, is that the character of the productivity ...


2

First of all, there is no need to believe any economic dogma. The real world is usually more complicated than these stories. If anyone can convince me of something with a two minute anecdote, that was probably not an important aspect of my world view, and I should probably not engage in setting such policy. (E.g. via voting for the person who tells the same ...


1

the first graph is 1970-2003, the second is 2003-2015


1

I've heard of this phenomenon but not for the reasons you suggest: The largest corporations tend to have the most interlocks (Table 4). This may occur because the directors of the largest corporations are the most knowledgeable, the most capable, and the most accomplished men available. Other corporations would naturally seek their advice and ...


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