Questions tagged [markets]

A market is an institutional arrangement in which buyers and sellers exchange goods, services, or information in transactions with or without money.

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What is the relation between “Capital Market Line” and “Capital Asset Pricing Model (CAPM)”?

I asked this question on Personal Finance and Money but was asked to ask it here. On the Coursera course Portfolio and Risk Management, on Week 2, I am having trouble finding the link between the ...
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Can a small reward control big money exchange rates? [closed]

Let we have a prediction market. Suppose the prices of some conditionals became high because it bubbled so much that people started to use the conditionals as means of payment. I want to control this ...
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1answer
38 views

Fall in price of sugar affects price and quantity of candy [closed]

Using the supply and demand model, explain and illustrate how the price and quantity of candy would be affected by sugar prices dropping, starting from the equilibrium point. Am I right in stating ...
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Theoretical models of copyright infringement and efficiency implications

I wanted to know if there are theoretical models of copyright infringement and what are their implications for efficiency in the market and also, if possible, any empirical support they have. When I ...
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1answer
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Does stronger regulation of economic activity impede economic growth in constitutional democracies with basic constitutional rights?

Given similar democratic constitutions and basic constitutional rights such as property rights, freedom of speech, freedom of press etc and the definition of regulation according to OECD: Regulation ...
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1answer
55 views

How did Cowen and Tabarrok calculate the probability of Hewlett-Packard sales?

The discussion on prediction markets in the chapter on the price system in Tyler Cowen and Alex Tabarrok's Modern Principles of Economics, Second Edition (pp. 123-124) contains the following ...
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Order-driven vs quote-driven markets

What is the difference between order driven and quote driven markets? Is there any theoretical microstructure book that gives the intuition behind the types of markets with respect to the orders that ...
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56 views

Non monotonic supply curve

Supply curves are usually non decreasing. For example in a electricity market, providing more capacity means turning on new production units with higher costs, see e.g. the following representation: ...
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1answer
50 views

How elastic are markets with regards to unethical companies? [closed]

Do markets respond by naturally boycotting unethical companies? For example, if an American company makes its products using Uyghur labor, can we trust their customers and would-be customers to ...
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European Commission getting rid of excess carbon emission permits

According to this Economist article, For a long time after it was launched in 2005, the [European Trading System] barely functioned; a glut of allowances (which give the holder the right to emit an ...
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1answer
53 views

Cryptocurrencies: Is it possible to estimate price from market cap?

I'm looking at a website that figures out the potential price of a coin if it had a certain market cap. I'm not sure I understand the underlying calculations though. It's well established that: ...
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Understanding Vernon Smith's 1962 “An Experimental Study of Competitive Market Behavior”

Vernon Smith's 1962 paper "An Experimental Study of Competitive Market Behavior" simulates a market using students (who have piece of paper giving their reservation prices). In one of the ...
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Why do stocks that don’t pay any dividends change price when the company does better?

I don’t understand why (non-dividend paying) stocks increase in price when a company is successful; is it just because everyone expects that everyone else will find it more valuable because the ...
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1answer
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Perfectly functioning credit markets and consumer saving

Today in my Macroeconomics lecture, while covering the Real Intertemporal Model with Investment (Chapter 11 of Williamson's Macroeconomics), my professor proponed that a key assumption to not make ...
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Statistics for IT jobs distribution over industries in 2021 or recent data before?

Own work done so far: After some googling, I think I must be doing something wrong. Is there no up-to-date infografic on that..? I can't find even not an article. Formal Q&A question: What is the ...
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Methodology of Estimating Economic Costs?

To be specific, I am currently devising an honours thesis proposal to estimate the effects of a lack of competition in consumer electronic repair markets on variables such as firm profits, consumer ...
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1answer
243 views

Why is South Korea classified as an Emerging Market economy?

I have recently found out that South Korea is part of the MSCI Emerging Markets Index, and that the South Korean Won (KRW) currency trades as a non-deliverable currency. Furthermore, the South Korean ...
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288 views

When do the curves touch the axes and when don't they?

The Demand Curve The Supply Curve Monopoly: How to Graph It In videos (1) and (2), we see that the supply and demand curves do not touch the axes. In (3), we see that the demand curve touches the Y-...
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What are the Industries and sectors who performs better during COVID?

Maybe I'm a bit late with this question, but I just want to list all the sectors who benefit in these covid times. My current list is cure researchers food delivery tech companies overall especially ...
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Are economic profits above normal for many firms in a perfectly-competitive increasing-cost industry?

In a perfectly-competitive constant-cost industry, all firms will have normal profits in the long run. This fact is very clear to me as the long run supply curve is perfectly elastic and hence each ...
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What is the intuition for the potential loss of market makers on LS-LSMR?

What risk do liquidity providers take on when they provide liquidity to an LS-LSMR automated market maker pool? How much can they lose?
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Do barriers to entry increase the (collective) market power of incumbent suppliers?

For example in the case of the labour market lower immigration means that low-skilled labour can ask higher wages or better conditions (other things equal). Low skilled labour may have even put the ...
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Why Hanson's logarithmic scoring rule define an Automated Market Maker?

Why Hanson's logarithmic scoring rule define an Automated Market Maker? We have in this paper in page 47, section automated market maker, that this scoring rule can "easily" be turned into ...
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Link between Automated market makers and Logarithmic scoring rules

In most articles I read about AMMs (automated market makers), there is a link or a mention to Hanson's work about the Logarithmic scoring rule. But I don't clearly see the link between AMM's and the ...
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55 views

Why doesn't stock market help to boost the economic growth directly?

For example, during the recession, the central bank often goes to buy financial instruments that are riskier than government bonds (such as corporate bonds)- which is called "quantitative easing&...
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182 views

What has been the reception of Posner & Weyl’s claim that property rights lead to market power?

Posner & Weyl claim that property rights lead to monopoly rents: Property Is Only Another Name for Monopoly Radical Markets Have their claims been elaborated, tested, or peer-reviewed? In ...
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201 views

Increasing returns, implications?

If a firm has increasing returns to scale (i.e., doubling inputs more than doubles output) would that firm logically end up being the sole firm in its sector in the long run? If not, what is the ...
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Pareto efficiency of organ markets

Organ sale is legal in Iran. I was wondering: are organ markets Pareto efficient? Or could an argument be made for them being Pareto efficient? I have been thinking that both the buyer and the seller ...
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Why do two-sided marketplaces often charge both sides of the transaction?

Why do marketplace apps often charge both sides of the transaction, when charging one side could raise as much (or more) revenue and be simpler? i.e. if the marketplace knows which side of the market ...
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The ability of markets and prices to direct resources to higher valued uses: Is this a short run or a long run attribute?

I came across the following quote in a lecture: "In economics, we often talk about the power of markets and prices to direct resources to higher valued uses." - Mike Munger Is this ability ...
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Economic anthropology: Have there been cultures / societies without a market?

I was having a discussion about whether the "market" or "markets" always and inherently emerge as long as human societies exist. Given the definition of market as the interplay of ...
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What is homebody economy? [closed]

What is this thing named homebody economy? It seems to be related with the virus It refers to working at home or maybe at online shopping?
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87 views

Increase in the price of skateboard wheels cause a decrease/no change in the demand of skateboards? (2 separate markets w/ 2 separate buyers)

Would an increase in the price of skateboard wheels cause a decrease/no change in the demand of skateboards? (2 separate markets with 2 separate buyers) Note: I'm going to be mainly focused on the ...
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135 views

Why are Americans at the top of nearly every field?

I live in India, and having spent several years in America before returning, I noticed that Americans dominate in nearly every sphere of human activity. For example, the US seems to be blessed with ...
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Does the theory of contestable markets apply to industries where there is a natural monopoly?

The theory contestable markets requires that there be no barriers to entry, no sunk costs, and access to the same level of technology. I know common industries that have natural monopolies (like ...
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32 views

How to graph a monopoly that does not exhibit the properties of a contestable market?

This question is not a homework question. I am taking a course in industrial organization, and the textbook/professor have given an illustration of a monopoly that is a contestable market. However, I ...
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58 views

A maximization problem with multiple goods and integrated markets

Update: I will try to clarify the question: Let us say that the total harvest of the fish population at time t is $H_t$. Every harvest produce three types of fish: salmon ($f_1$), which is valuable ...
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2answers
45 views

Remove Linear Good From Quasi-linear Utility Function

Given a quasi-linear utility function: $u(x_1, x_2) = f(x_1) + \beta x_2$, $\beta > 0 $ What would happen if good 2 ($x_2$) is removed from the market? Would the new utility function be: $u(x_1) =...
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Measurement for the downstream use of a commodity

I am looking to find a measurement that would tell me the size of the market of the downstream use of some particular commodity. For example, salt or wheat would be used by many companies downstream. ...
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Lerner Index Interpretation?

How do you interpret the Lerner Index? I ask because at Uni. we have been told that, for monopoly, when the producer max. his profit, he sets the price such as the demand is elastic and the lerner ...
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House allocation: Data notation correction with Top Trading Cycles (TTC) example

I am trying to understand TTC algorithm for house allocation. I have got a small problem. I am trying to understand the following example: IE=[i1 , i2 , i3 , i4], IN=[i5], Ho=[h1 , h2 , h3 , h4], ...
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Why is the equilibrium network size can be less than the socially optimal size in networks w/ positive externalities for single system?

For Context, I am reading http://web.mit.edu/rpindyck/www/Courses/NetEx19.pdf. The chapter talks about network externalities in single system like fax machine, email, vaccinations for measles. ...
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Does price cap in emergency situation (COVID-19) reduce the availability of a good? Does unregulated market increase it instead?

I was discussing with one of my friend about Italy price cap on surgical mask to control speculation. He says price cap does not allow industries to invest more to increase the production that would ...
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Can we consider a supermarket as a market?

Good morning, I have been reading a book in which the author said that "the supermarket is not a market, because despit the large number of buyers, the seller is unique". So, I've been wondering ...
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What is the latest thinking on the economic calculation problem? [closed]

Eric Posner and Glen Weyl write in the epilogue of Radical Markets (2018) that they “remain confident that for at least a few generations markets – Radical Markets, that is – will remain the best ...
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232 views

Properties of Financial Markets in Real Life

When studying financial economics, three concepts appear everywhere Equilibria (investors maximise utility, markets clear and aggregated demand equals aggregated supply) Completeness (there are ...
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154 views

Why didn't other oil pricing benchmarks such as Brent go negative?

This question is asking why the oil (in this case, WTI) price is negative. While I think I have broadly understood why WTI collapsed, I don't really understand why other oil pricing benchmarks didn'...
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What value do virtual traders of commodity add to the market?

Many if not most companies trading in commodities are only trading them on paper. They will not use the commodity they are buying and can not take deliver of the physically commodity. What value do ...
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CDO and Nonpositive Equity Questions

I have two questions about statements made in this video: https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/bank-bailout/v/bailout-2-book-value At 6:25, the video ...
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Are final goods commodities?

I've been reading about final goods and commodities and some links https://en.wikipedia.org/wiki/Final_good https://marketbusinessnews.com/financial-glossary/final-good/ mention that final goods ...