Giskard
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Derivation on p.99 of Salanie, The Economics of Taxation (2nd edition)
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3 votes

I think it is the chain rule. Let $w'(w) = w$, since we are looking for revealing mechanisms. The condition $$ \frac{\partial V}{\partial w'} (w'(w),w) = 0 $$ holds for all $w$ because the mechanism ...

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Shifts in demand curves
1 votes

Consider a curve with a negative slope (such as the demand function for a normal good). If you draw a second curve with a negative slope that does not intersect this one then it can either be in the "...

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Marginal rate of substitution
2 votes

There is more than one indifference curve. There is one belonging to every utility level. So for any utility level $c$, the points $(x,y)$ that satisfy $$2\cdot \sqrt{x} + y = c$$ are an indifference ...

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Price distribution: Negative values?
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2 votes

In Lemma 1 they say that the support $\left[\underline{p}_t, \bar{p}_t \right]$ is such that $ c < \underline{p}_t $. So even though the support is connected, it does not extend to $c$, hence the $...

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Strategic form: mixed strategy nash equilibria?
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3 votes

The probability vectors you gave in red describe pure strategy NE. (They assign probability one to an action.) $\tau$ shows the probability that the column player plays action $l_2$. If $\tau = 1$, ...

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Indifference curves and preferences?
1 votes

Perhaps you overlooked something, as I think Oral and Jim do not have different indifference curves. Pat and Jim do have identical indifference curves, but whereas Jim prefers curves that are 'higher'...

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Does concavity of the utility function has any bite?
0 votes

I think that the way marginal utility is frequently used is that there is an assumed unit of measurement. For example if in the utility function $$ U(x,y) = v(x) + y $$ $y$ denotes income spent on ...

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How to interpret "desired significance level"?
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2 votes

I am not sure what you mean by "appropriate significance level." Basically how sure you want to be is your choice. A frequently used analogy is the presumption of innocence. You are considered guilty ...

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Real Positive Eigenvalue, but Stable Dynamics
2 votes

If you have are trying to discretize the continuous time model $$ \dot{\textbf{x}} = A\textbf{x}, $$ then in discrete time you will have $$ \textbf{x}_{t+1} = B \textbf{x}_t $$ but $A\neq B$, since $A$...

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Why do we need both the UMP and the EMP?
2 votes

The solutions of UMP and EMP only coincide if certain conditions such as monotonicity of preferences is met. Hence they are different problems. Duality is important because the Lagrangian multipliers ...

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Interpreting how graphs of Cobb-Douglas utility functions. How does MRS vary as we vary $\alpha$?
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2 votes

I think it is important to note that $MRS(x,y)$ is a function. There is exactly one indifference curve passing through $(x,y)$. $MRS(x,y)$ shows the steepness of this curve at point $(x,y)$. Then $\...

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Extensive form: backward induction & subgame perfect nash equilibria?
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5 votes

Until the last paragraph your interpretation is correct. $(a,d)$ is not a strategy profile, it is merely a 'history', a way that the game can play out. A strategy of a player is a function that ...

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Delegation with Discreteness
1 votes

I believe this is the basic case discussed in the Laffont-Martimort textbook "The Theory of Incentives". The choice of the agent is either 0 or 1. You can find a complete description in "The Moral ...

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Is this equivalent to the game of chicken?
3 votes

As you stated the strategy set in the traditional chicken game has two elements and in the Akagi version it is an interval, so there will be no bijective mapping between the two. If I misunderstood ...

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Pareto optimality and Externalities
0 votes

My understanding is that we do not answer homework problems here. (I might be wrong.) However you did lay out some ideas and I will give you feedback on those: 1) There is no guarantuee that the NE ...

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Are symmetric equilibria continuous with respect to the payoff matrix?
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3 votes

If I understand your question correctly then the answer is no. Consider $$ A(h) = \left( \begin{array}{ccc} 1 & 1 & 0 \\ 0 & 2 & 0 \\ 2+2h & 0 & 3 \end{array} \right) $$ For ...

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Are symmetric equilibria monotone?
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2 votes

For a simple counterexample let $$ A = B = \left( \begin{array}{cc} 1 & 0 \\ 1 & 0 \end{array} \right). $$ In this game any strategy pair will constitute a Nash-equilibrium. Let $$ a^t = \left(...

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