# Tag Info

### Has mathematical economics contributed to the mathematics of space exploration?

In the history of dynamic programming some economic works are considered pioneering contributions to the theory of dynamic programming (and in this sense it can be said that they contributed to ...
• 3,802
Accepted

• 8,811

### Finding the set of Pareto Optimal Allocations

Interpretation 1: Given the data in the problem, I think you're interested in a pure-exchange economy with externalities i.e., $u_1(x_1,y_2) = x_1^\beta y_2^{1-\beta}$, $u_2(x_2,y_2) = \min(x_2,y_2)$,...
• 8,811

### Are the marginal conditions for Pareto optimality sufficient?

These are all conditions that cover local deviations. Without further assumptions, usually ones involving convexity & closedness of sets and/or concavity & continouity of functions they are ...
• 29.2k
Accepted

### Lump sum transfers to implement any Pareto efficient equilibrium as the market outcome

Here is the Edgeworth box of your exercise: The green dot with the curves running through it is your equilibrium allocation. The red and blue lines are indifference curves of $A$ and $B$, while the ...
• 29.2k
Accepted

### Can we define the core as the intersection of Pareto efficient allocations and upper-contour sets?

Assume there are three individuals $A, B, C$ and three goods $x, y, z$. Endowment for $A$ is $(1,0,0)$ for $B$ is $(0,1,0)$ and for $C$ is $(0,0,1)$. Assume the utility function for the individuals ...
• 12.2k
Accepted

### Find the set of Pareto efficient allocations. $U_1 = -|x_1-2|$ and $U_2 = −|x_2 − 8|$

To answer your question, you can't use the Edgeworth box in this kind of setup because it is used for an economy where we have two goods and two agents. However, there exists an alternative graphical ...
• 625

### Are ALL externalities inefficient?

Pareto efficiency and inefficiency, as Michael Greinecker comments, are properties of allocations of resources. An allocation is efficient if there is no alternative allocation which makes someone ...
• 8,519
1 vote

In particular, why are externalities bad? This is a non-economics question. Economics cannot say if something can be good or bad. For that you need moral philosophy. For example, if some economic ...
• 56.8k
1 vote

### Are ALL externalities inefficient?

There might be a bit of a misunderstanding. It is not the existence of the externality as such that is Pareto inefficient, but rather the level of the externality which is usual Pareto inefficient. ...
• 12.2k
1 vote

### Social Welfare Function (Pareto Efficiency)

Pareto efficient compensation criterion is a criterion that allocates compensation such that it is impossible to reallocate resources such that one person can be made better off without making at ...
• 1,819
1 vote

### Information asymmetry and market failure

It’s little bit more nuanced. Market failure in economics is rigorously defined as a situation where markets are not allocatively efficient (see Ledyard 2017). That is, technically speaking, market ...
• 56.8k
1 vote

### Under what conditions does market failure occur?

I just wrote about this very thing. There are many misconceptions and incorrect information floating around about market failure. The 3 types of market failures I identify are: Externalities Anti-...
• 109

Only top scored, non community-wiki answers of a minimum length are eligible