Most Popular
1500 questions
10
votes
2 answers
The 2015 Economics "Nobel": Angus Deaton
Angus Deaton is only the sixth economist to not share the "Economics Nobel" (the "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel") in the last 20 years (i.e. from 1996 onwards).
The Press Release reads:
Press Release
13…
Alecos Papadopoulos
- 33,814
- 1
- 48
- 116
10
votes
3 answers
Why is the derivative used to represent marginal cost instead of the difference?
Marginal cost is defined as "the change in the total cost that arises when the quantity produced is incremented by one unit." And given a total cost function $C(q)$ that's differentiable, the marginal cost is the derivative, $C'(q)$. But if I were…
Quinn Culver
- 201
- 2
- 5
10
votes
3 answers
How to show that a homothetic utility function has demand functions which are linear in income
A homothetic utility function is one which is a monotonic transformation of a homogeneous utility function.
I am asked to show that if a utility function is homothetic then the associated demand functions are linear in income.
In general if $H$ is…
MHall
- 326
- 1
- 4
- 9
10
votes
3 answers
Is scalping tickets harmful?
IMHO, scalping tickets is no different from legitimate arbitrage unless manipulative.
Iirc, arbitrage increases surplus and hindering scalping is setting a price ceiling which leads to deadweight loss or something like that.
So why do some states…
BCLC
- 360
- 1
- 10
- 28
10
votes
5 answers
Are there real world examples of a shoe event horizon?
This is a famous quote from Douglas Adam's The Restaurant at the End of the Universe:
Many years ago this was a thriving, happy planet – people, cities, shops, a normal world. Except that on the high streets of these cities there were slightly more…
curiousdannii
- 625
- 9
- 19
10
votes
1 answer
How does a bank convert one currency to another?
Say for example I sell ZAR and buy USD. What happens behind the scenes so that the local ZAR bank is able to deposit USD into my account?
Does the bank require some sort of USD cash reserve?
How do the banks interact/negotiate with each…
Jasper Citi
- 223
- 1
- 4
10
votes
3 answers
Impact of auction systems that allow 'sniping'
I'm a bit perplexed that eBay has auctions that have a fixed time ending, and so winners are often determined by who can 'snipe' the auction, by putting in the winning bid at the last possible microsecond.
Often specialised software is used to…
dwjohnston
- 2,036
- 14
- 31
10
votes
3 answers
Nobel prize for empirical work
Did any recipients of the economics Nobel prize receive their prize for work that was primarily or substantially empirical (rather than theoretical) in nature?
Ubiquitous
- 16,925
- 4
- 37
- 84
10
votes
2 answers
OLS bias in demand estimation: the bias always underestimate the demand's elasticity?
Some papers argue that OLS can produce less bias than IV estimation depending on the quality of your instruments. Suppose we consider a demand estimation equation.
Suppose the demand elasticity is negative in OLS. By my intuition weak instruments…
John Doe
- 423
- 2
- 16
10
votes
3 answers
What is the calculable effect of counterfeiting on an economy?
I'm curious whether one can numerically calculate the effect that counterfeiting has on an economy.
As I understand it, counterfeiting essentially amounts to theft of the wealth of everybody holding units of that currency. For example, say you have…
Claudiu
- 263
- 1
- 9
10
votes
4 answers
Would poorer countries be better off by cutting off all trade with rich countries?
A 2017 Guardian article covered research that outflows from developing countries, primarily by way of unrecorded capital flight, significantly outstrips inflows.
... for every $1 of aid that
developing countries receive, they lose \$24 in net…
KDP
- 201
- 1
- 5
10
votes
1 answer
Are there papers in evolutionary game theory that are influential in economics?
The concept of evolutionary game theory has been around for about forty years. The mathematical details are worked out quite well. Yet this discipline is usually a side note in game theory classes and is seldom applied in economics research. Have…
Giskard
- 29,387
- 11
- 45
- 76
10
votes
1 answer
The median as a welfare function
In an economy with several agents who have different utility functions, it is common to define a welfare function, defined as an aggregate of the utility functions of the different agents. Then we can ask if and how this welfare function can be…
Erel Segal-Halevi
- 3,065
- 3
- 15
- 36
10
votes
2 answers
Fair voting procedure when there are many issues
When several people have to decide about a single yes/no issue*, the natural decision rule to use is the majority rule.
But when there are many issues to decide upon, the majority rule is "unfair" in the following sense: it is possible that the…
Erel Segal-Halevi
- 3,065
- 3
- 15
- 36
10
votes
3 answers
Is it possible to have a modern economy without a central bank?
Many mainstream economists say that such thing is impossible. Is there some specific reason why the financial system needs a central bank?
In this video http://m.youtube.com/watch?v=BcuAOdXD0Go, Krugman says at 03:00 it's impossible to leave the…
John
- 101
- 1
- 3