# Tag Info

5

Why don't you just take a weighted average? Suppose you have ten years $t \in \{1,...,10\}$ and year $t$ has $N_t$ observations such that in total you have $\sum_t N_t=N$ observations. Let the year-$t$ CDF be $F_t$ with support $[\underline w_t,\overline w_t]$. You can then define a weighted average CDF as $$\overline F (w) = \sum_t \frac{N_t}{N} F_t(w).$$ ...

3

If $\alpha \sim U$, then how come there is no expectation in your profit function? The $\alpha$ is unknown and which $\alpha$-types the firm gets depends on salary $v$. This should be reflected in the profit function. Next, your $n(v)$ seems to assume that $\alpha \sim U[0,1]$, but you set $\alpha \sim U[0,2]$. I assume this is a typo and I edited your ...

3

The answer by @Baysiean proposed to compute a weighted average of the per-period empirical distribution functions $EDF_t(w)$ (where $w$ is the value in the support of a random variable $W$), a value at which we evaluate the $EDF_t$ of $W$. Let's see what that may mean. The $EDF_t(w)$ expression is, for each value $w$ in the support, EDF_t(w) = \frac 1{N_t} ...

1

In relation to the problem of heteroskedasticity in linear probability models, the following Ben Lambert video is a useful link: youtube.com/watch?v=pgPhbVEbYqw

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