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27 votes

How do economists explain why people contribute to Wikipedia?

Voluntarily contributing to a public good (such as Wikipedia) is a strong social norm. The tendency to follow such norms even if this is costly in the short run has developed over humans' evolutionary ...
VARulle's user avatar
  • 6,825
23 votes

How do economists explain why people contribute to Wikipedia?

I wouldn't underestimate the role of learning by answering. Drafting a significant text typically forces a person to put their thoughts in order, to engage in research, and then to structure the ...
Steve's user avatar
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15 votes

How do economists explain why people contribute to Wikipedia?

tl;dr: There could be multiple explanations depending on how you want to treat Wikipedia. If you want to treat Wikipedia as public good where everyone contributes a small part towards its creation and ...
1muflon1's user avatar
  • 56.4k
8 votes

How do economists explain why people contribute to Wikipedia?

Look at the data For starters, the obvious thing is to look at the data about the self-reported reasons for contributing to wikipedia (and I'm surprised that neither the question asker nor most of the ...
Peteris's user avatar
  • 488
6 votes

Auctions and finding nash equilibrium of a dynamic game

Let's first determine the sets of actions of the players. An action of player 1 is simply a bid $x_1 \in \mathbb{R}_+$. An action of player 2 is a function: $f_2: \mathbb{R}_+ \to \mathbb{R}_+$ that ...
tdm's user avatar
  • 12k
6 votes

Auctions and finding nash equilibrium of a dynamic game

You are only required to get Nash equilibria and not sequentially rational/subgame perfect equilibria. Hence Player 2's actions at information sets that do not occur (that do not reflect Player 1's ...
Giskard's user avatar
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5 votes
Accepted

Who is the first one to equate "rational" with "complete and transitive preference"?

As pointed in the comments this was done by Ragnar Frisch. At least Barten and Böhm. (1982) as well as Johansen (1969) attribute these axioms to one of these two publications: Frisch, Ragnar (...
1muflon1's user avatar
  • 56.4k
5 votes

Why is exponential discounting considered rational?

To see that exponential discounting is (more or less) the only time consistent manner to discount the future, consider a decision maker obtaining a utility (payoff) level at period $t$ and at period $...
tdm's user avatar
  • 12k
5 votes

Is the linear probability model consistent with utility maximization?

This is a very interesting question. Let me do a little algebra. Consider the latent variable model $y = I(a+xb > u)$, where $I(\cdot)$ is the indicator function. Let $F(\cdot)$ be the CDF of $u$. ...
chan1142's user avatar
  • 2,114
5 votes
Accepted

Necessary and sufficient conditions for the existence of a utility function

The following is essentialy due to Debreu. The result is formulated in terms of linear orders, but each complete and transitive relation induces a linear order on the indifference classes: Theorem: ...
Michael Greinecker's user avatar
4 votes

What would you call a preference relation that is intransitive yet complete?

A preference is rational if it is complete and transitive. You need both properties satisfied for it to be rational. So an intratransitive and complete preference will still be irrational. ...
Rumi's user avatar
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4 votes
Accepted

How are these examples irrational?

a) If Sophie is not indifferent between all options, then completeness requires that she have some ranking between atleast 2 of them. In this case, she must weakly prefer one option to the others.So ...
Pallak Goyal's user avatar
4 votes
Accepted

Demand correspondence is both upper and lower hemi-continuous; is the preference continuous?

I think that you should proceed by contradiction assume D is continuous, but $\succsim$ is not, then for a bundle either the more preferred than or the less preferred than sets are not closed. Choose ...
Regio's user avatar
  • 4,188
4 votes

Violation of completeness axiom (simple everyday examples)

There is a problem in how you translate completeness into behavior. Let $R$ be any binary relation, representing preferences, on a set $X$ of alternatives and $A\subseteq X$ be a nonempty set of ...
Michael Greinecker's user avatar
3 votes

Demand correspondence is both upper and lower hemi-continuous; is the preference continuous?

If the commodity space is $\mathbb{R}^2_+$ and the preference is Lexicographic, then with the standard budget sets $B=B(p_X, p_Y, M) = \{(x, y) \in \mathbb{R}^2 | p_Xx + p_Yy \leq M\}$ where $(p_X, ...
Amit's user avatar
  • 8,476
3 votes
Accepted

Is soil exhaustion rational?

The true answer is of course it depends. What it depends on is how you define sustainability. In a natural resources context, with weak sustainability, soil quality is a capital asset, just as a fish ...
Maarten Punt's user avatar
  • 2,375
3 votes

How are these examples irrational?

Pallak Goyal gave what I think can reasonably be assumed to be the answers the author was looking for. This answer is a comment that would not fit under the actual comments. The idea behind (a) and (c)...
Michael Greinecker's user avatar
2 votes

Why is exponential discounting considered rational?

Any discounting that yields time consistent preferences can be considered rational discounting. To check if the intertemporal utility with any discount factor is time consistent, you need to check if ...
1muflon1's user avatar
  • 56.4k
2 votes
Accepted

What would you call a preference relation that is intransitive yet complete?

Complete but intransitive preferences are Cyclical Preferences. An example of complete but intransitive preferences is in the game of "rock, paper, scissors" In this case we can have $$\...
EconJohn's user avatar
  • 8,345
2 votes

Analyzing a Gambling Race Paradox

There are several problems with your game that you are not considering, the first of which is that the risk of ruin is irrelevant. The game is a race. Your question is roughly equivalent to ...
Dave Harris's user avatar
  • 2,006
2 votes

Rationalizable strategies and Weak Dominance

In 2-player games, the strategies that survive iterated elimination of strictly dominated strategies are called rationalizable. Note that even if no strategy is strictly dominant, there can be ...
Bayesian's user avatar
  • 5,290
2 votes

Understanding Classical Rationality at a Basic Level

In microeconomics people are rational if they act to maximize their utility function. What goes into the utility function? Anything that is relevant when they choose, which is of course up to debate. ...
Three Diag's user avatar
2 votes
Accepted

Understanding Classical Rationality at a Basic Level

(Bottom in bold is a partial TL;DR) The definition your book gives you only seems incoherent because you take "people act to make themselves better off" (your book's definition) as the same ...
Kitsune Cavalry's user avatar
  • 6,628
2 votes

Violation of completeness axiom (simple everyday examples)

Indifference is different from incompleteness. A good example is indecisiveness. Eliaz and Ok have a nice discussion. Suppose you want to buy holidays for your family. You know your wife prefers ...
Fato's user avatar
  • 550
1 vote
Accepted

Premises on which the Efficient Market Hypothesis is built upon

The efficient market hypothesis does not require everyone being omniscient. It works through the supply/demand and price mechanism. For example, imagine that you have private information that a ...
1muflon1's user avatar
  • 56.4k
1 vote

Understanding Classical Rationality at a Basic Level

After all,suppose person A knows they will derive satisfaction from honoring sunk costs. Then doesn't honoring sunk costs make them better off (it fulfills their desire for happiness), and therefore ...
Samuel Russell's user avatar
1 vote

Does Preference have a Hierarchy? A Silly Question

*A little disclaimer, this is more me ruminating than providing a rigorously proofed response. I have never thought of preferences being related that way before, especially through the use of ...
J.N's user avatar
  • 96
1 vote

Violation of completeness axiom (simple everyday examples)

I assume you are talking about preferences? In case you are talking about mathematical relations in general, $\geq$ in $\mathbb{R}^2$ is not complete, as neither $(0,1) \geq (1,0)$ nor the opposite ...
Giskard's user avatar
  • 29.5k

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