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1500 questions
7
votes
3 answers
Interchangeability between knowing an event obtains with probability 1 and knowing an event obtains with absolute certainty?
In the literature of interactive epistemology, for a player, knowing an event obtains with probability one and knowing an event obtains with absolute certainty are different. Is there a nontrivial (say, it could be the case, an event is a proper…
Metta World Peace
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7
votes
4 answers
Do companies have non compete agreements between each other?
Do companies also know for a better lack of words armistice? When searching for non compete agreements everything that comes up are agreements between companies and employees, but do whole companies also have non compete agreements with other…
Hakaishin
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7
votes
1 answer
Understanding this particular criticism of RCTs by Deaton and Cartwright
Deaton and Cartwright make several criticisms of randomized controlled trials (RCTs).
My question is about this one in particular from a 2016 VoxEU piece:
Well-conducted RCTs could provide unbiased estimates of the average treatment effect (ATE) in…
user23101
7
votes
1 answer
What does Hayek mean at the end of the first paragraph of The Use of Knowledge?
I reproduce here the first paragraph of Hayek's well-known essay The Use of Knowledge in Society:
What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough.…
Gregory Higley
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7
votes
5 answers
Is it possible to have a preference relation that is complete but not transitive?
I've been doing my own reading on non-rational preference relations.
I'm currently under the impression that transitivity follows as a direct result of completeness of preferences. However my (much more advanced colleagues) have told me this is not…
EconJohn
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7
votes
2 answers
Reduced Form of an econometric model, identification problem and test
Looking for some help to understand the following problem and how to use the reduced form in econometrics
Consider a model for the health of an individual:
$$health = b_0 + (b_1)age + (b_2)weight + (b_3)height + (b_4)male + (b_5)work +
(b_6)exercise…
Clemente Cortile
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7
votes
1 answer
Is there empirical evidence on usability of Cobb-Douglas production function?
I am trying to estimate a simple Cobb-Douglas production function $Y=AL^{\alpha}K^{\beta}$
on US data and get an unrealistic estimate of $\alpha$ and a high p-value for $\beta$.
Structure of regression is as follows:
$\frac 1 Y \frac{\mathrm…
Petr
- 73
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7
votes
1 answer
Regression discontinuity questions
I am considering a regression discontinuity design (RD) where the "treatment" has a definite sorting rule (below the threshold, you are not fined - above the threshold, you are fined). The outcome I am considering is how much you are fined the…
oncearunner
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7
votes
2 answers
Identification of switching costs from price shocks
What, if anything, can we learn about customer switching costs by looking at price, revenue, profit, and quantity responses of producers to cost shocks?
For example, we can define the profit equation as:
$\Pi = \sum^\infty_{t=0} [ -\alpha S +…
BKay
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7
votes
2 answers
What do game theorists think of behavioural economics?
Though behavioural economics has been popularized over the past decade in both industry and pop culture, it seems that not much has changed with regard to the standard economic definition of rationality.
This is because for the most part (in my…
EconJohn
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7
votes
0 answers
Fixes of quadratic utility when probability of decreasing utility is large
In finance and specifically portfolio theory, a popular utility function is quadratic utility
$$
u(x)=x-\frac{\lambda}{2}(x-\mu_x)^2
$$
where $x$ is wealth and $\lambda$ is the parameter of risk aversion. For $x>\mu_x+\frac{1}{\lambda}$ the…
Richard Hardy
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7
votes
2 answers
Cobb-Douglas production function with expenditures rather than units
I want to estimate a standard Cobb-Douglas production function of the form
$ Y=AK^{\alpha}L^{\beta}$. However, I only have data on labour expenditures, not units of labour. I don't have data on the price of labour $w$ either, so I can't back out…
leecarvallo
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7
votes
9 answers
What are some further readings in Econometrics you recommend?
I've reached the end of my Econometrics courses for the undegraduate level at my university, but I would like to continue learning. I hope I could get some recommendations for further reading. I present a summary (off the top of my head) of what has…
Pablo Derbez
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7
votes
6 answers
What are alternative measures of risk?
In finance, the variance of the returns of a security are used as a proxy for the associated risk of the security. I've seen some books include sentences like "if you take variance as a measure of risk...". In what way might variance be an…
jmbejara
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7
votes
1 answer
How to see that upper-semicontinuity and supermodularity are equivalent in a supermodular game context?
One requirement for a supermodular game $(I, \mathbf S, \mathbf u)$ is usually presented in two ways (e.g. in this note):
For $i \in I$, $u_i$ is supermodular in $S_i$, when $s_{-i}$ is fixed, i.e. for $s_i, s_i' \in S_i$
$$u_i(s_i \vee s_i',…
Epicurus
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