Giskard
  • Member for 6 years, 11 months
  • Last seen this week
1 answers
5 votes
68 views
Bayesian game and the set of types
Accepted answer
4 votes

Sure. In the two type case there is an alternate solution that is frequently used. If $a \neq c$ and $b \neq d$, that is the types are really different in both attributes, then you can define a ...

View answer
1 answers
3 votes
143 views
Basic question about why supply/demand should move to the equilibrium price?
4 votes

What you write is true in a monopoly situation, but not when there are multiple firms on the supply side. However, when equilibrium is discussed in this context people usually mean competitive ...

View answer
2 answers
1 votes
140 views
The independence of Central Banks
Accepted answer
4 votes

The independence of the central bank means that the bank is independent of the government. A mandate of the central bank is to ensure price stability. However any excess cash the bank prints is the ...

View answer
3 answers
3 votes
505 views
modelling disutility from over consumption
Accepted answer
4 votes

Varian's Intermediate Microeconomics covers a concept called the bliss point. If the consumed amount of a certain good is under the quantity specified by the bliss point, then the consumer would ...

View answer
1 answers
1 votes
25 views
Growth in dividends will equal growth of earnings
Accepted answer
4 votes

The textbook probably means growth rate and not absolute growth. Given your assumptions $$ \frac{\frac{d}{dt}Div_t}{Div_t}= \frac{\frac{d}{dt}\text{Earnings}_t}{\text{Earnings}_t} $$ does hold.

View answer
2 answers
1 votes
2k views
How does the monopoly's deadweight loss affect market surplus and the economic pie?
4 votes

Consider the following two examples: There is a consumer who is willing to pay 50 dollars for a good. (Reservation price is 50.) There is a seller who is willing to sell for 30 dollars. (Marginal ...

View answer
1 answers
3 votes
116 views
Say's law stated in terms of general equilibrium theory?
4 votes

How about Walras's law? Walras's law is a principle in general equilibrium theory asserting that budget constraints imply that the values of excess demand (or, conversely, excess market supplies) ...

View answer
1 answers
3 votes
157 views
Multiple Equilibria and Index Theorem
Accepted answer
4 votes

What about \begin{array}{|c|c|c|} \hline &C&R\\\hline M&0,0&0,0\\\hline D&0,0&1,1\\\hline \end{array} ? This game has two pure equilibria, $(M,C)$ and $(D,R)$ but no mixed ...

View answer
2 answers
5 votes
604 views
If the (direct) utility is concave in all goods, is the indirect utility necessarily concave in wealth?
Accepted answer
4 votes

Your statement does not seem to be true for normal goods either. A counterexample: $$ U(x_1,x_2) = (x_1x_2)^{\frac{2}{3}} $$ By the Cobb-Douglas property the optimum bundle given $w,p$ is $$ (x_1,x_2) ...

View answer
1 answers
3 votes
114 views
Non-cooperative Nash Equilibrium in political game
Accepted answer
4 votes

You could add up the equations \begin{align} \delta(1-\underline{S})S_j=e_i(S_i+S_j)^2 \\ \delta(1-\underline{S})S_i=e_j(S_i+S_j)^2 \end{align} to get \begin{align} \delta(1-\underline{S})(S_i+S_j)=(...

View answer
3 answers
7 votes
7k views
Can a game with a unique pure strategy Nash equilibrium also have a mixed strategy equilibria?
Accepted answer
4 votes

In general: If you draw the numbers of the payoff matrix from continuous i.i.distributions then with probability 1 the game will have an odd number of equilibrium points. (Meaning the sum total of ...

View answer
2 answers
3 votes
2k views
Game theory - Definition problem - Strategy vs Action
4 votes

The definition "Strategy is one of the possible actions of a player" is very poorly phrased. As you note there is an important distinction between action sets and strategy sets in some games, e.g. ...

View answer
1 answers
0 votes
54 views
Request of references regarding Friedman's Nobel Prize
4 votes

The Royal Swedish Academy of Sciences has decided to award the 1976 Prize in Economic Sciences in Memory of Alfred Nobel to Professor Milton Friedman, University of Chicago, Illinois, USA, for his ...

View answer
1 answers
5 votes
15k views
Do import tariffs tend to increase a country's exchange rate (if so, why)?
Accepted answer
4 votes

Suppose that there is no 45 percent tariff and the market is in some kind of equilibrium. That is the demand for yuans equals the supply of yuans at the current exchange rate. Now assume Trump does ...

View answer
3 answers
0 votes
168 views
A trillion dollar invention
4 votes

Sure, because dollars are nominal goods. Perhaps a ticket to Star Wars Episode CXVIII will cost one trillion dollars. If you meant today, without huge changes in the price level: Yes, there is way ...

View answer
2 answers
1 votes
5k views
What are examples of inversely (negatively) correlated stock prices in economics?
4 votes

Have you tried Google? By copying a part of your question into Google I was able to find several examples. The best one may be this site which lists 20 positively and negatively correlated stocks for ...

View answer
3 answers
3 votes
2k views
Long Run Equilibrium of Oligopolies
Accepted answer
4 votes

The 'long run' assumption is not about whether the firms already on the market are price takers (perfect competition) or oligopolists but whether entry to the market is free. If entry to the market is ...

View answer
1 answers
2 votes
320 views
CV, EV for additive utility; confirm or deny
Accepted answer
4 votes

Questions with numbers are usually not as good as questions without numbers. If you had written down the formula for CV and EV you would probably have noticed that your premise is false. CV and EV ...

View answer
1 answers
3 votes
2k views
Oddness of equilibrium points
Accepted answer
4 votes

It depends on what you mean by generically. The Prisoner's Dilemma has exactly one equilibrium. If you generate the payoffs in your $2 \times 2$ game by drawing payoffs from continuous i.i.d.'s then ...

View answer
1 answers
4 votes
526 views
Calculating Time to Balanced Growth Path
Accepted answer
4 votes

a) Your calculations are correct, but in order for consumption to be positive, so for $$ c_t=\bigg(\frac{R}{(\beta R)^{\frac{1}{\gamma}}}-1\bigg)k_t > 0, $$ you will need to additional conditions. ...

View answer
3 answers
5 votes
673 views
Is the Convex Combination of Two Pareto Optimal Allocations Also Pareto Optimal?
Accepted answer
4 votes

Here $$\not\exists\;x_i^\star\; s.t.\; u_i(\alpha x_i)\geq u_i(\alpha x_i^\star)\;\forall i\;\text{and}\;u_i((1-\alpha)\hat{x}_i)\geq u_i((1-\alpha)x_i^\star)$$ $$\implies\not\exists\;x_i^\star\;s.t.\...

View answer
1 answers
5 votes
191 views
Question on significance of different ways of measuring Price Elasticity of Demand
4 votes

Ideally the points $(x_1,y_1)$ and $(x_2,y_2)$ are very close. The assumption is that that they are so close that the elasticity of the demand function on the curve between them is nearly constant. ...

View answer
3 answers
3 votes
1k views
Given a Utility function, U(x,y), why is multiplying U(x,y) * x not a monotonic transformation?
4 votes

The utility function $U'$ is a monotonic transformation of $U$ if there is a strictly monotonically increasing function $f$ for which $$ \forall x,y: \ f(U(x,y)) = U'(x,y) $$ Larger values of $U(x,y)...

View answer
1 answers
3 votes
141 views
Papers with insignificant results
Accepted answer
4 votes

This does not directly answer your question, but I will try to explain why I don't think that such well known papers exist. If submitted I don't think that such a paper would be accepted by the top ...

View answer
3 answers
1 votes
2k views
Two quasilinear utility functions
4 votes

The statement is not true. Let $x_A + x_B = 1$, $y_A + y_B = 1$. Let $U_A(x_A,y_A) = x_A + \ln(y_A)$, $U_B(x_B,y_B) = x_B + \ln(y_B + 1)$. $f \neq g$ are both strictly increasing & concave. For ...

View answer
1 answers
3 votes
215 views
Confusion on Strategy Sets in a simultaneous move game
Accepted answer
4 votes

There is no conflict. The strategy is a function which maps decision points to actions, that is it tells the player in each decision point (to be precise, in each information set) what she should do. ...

View answer
4 answers
16 votes
6k views
Is Malthusian theory of population growth being realized?
4 votes

I think the answer of @EnergyNumbers covers most of the important points but I would like to emphasize something else. When setting up a model you should not give the same weights to data from 500 ...

View answer
1 answers
6 votes
727 views
Prove that a continuous $\succsim$ is quasilinear
Accepted answer
4 votes

First off it seems to me you are proceeding in a manner more complicated than necessary. (Perhaps this is intentional because you wish to face a harder exercise.) Since it is given that $v(x)$ ...

View answer
2 answers
3 votes
1k views
Why doesn't Costco simply raise prices and nix the membership fee?
Accepted answer
4 votes

I agree with @Alecos Papadopoulos that this is probably a marketing/product differentiation trick. You attract a specific type of consumers with a specific mindset. Another theoretical explanation ...

View answer
1 answers
1 votes
44 views
If a business charges more for a product than the cost to make it, how is our economy not inevitably doomed for debt?
4 votes

To continue your example: Resources (including labor) cost $x$, product sells for 4$x$. The fat cat business owner makes 3$x$. What does he do with it? If he spends it, for example plays golf or gets ...

View answer
1
3 4
5
6 7
20