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1500 questions
6
votes
1 answer
Why are Hicksian demand curves unobservable
I have read this paragraph in a book (Jehle, Reny: Advanced Microeconomic Theory):
I don't quite understand why Hicksian demand curves aren't directly observable? What does observable stand for in this context?
I can create a Hicksian demand…
mn2609
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6
votes
2 answers
Help with Income Elasticity Exercise in Becker's Economic Theory
On page 18 of his book Economic Theory, Gary Becker provides the reader with the following exercise (no answers given):
Exercise Statement:
Write the formula $\sum_j K_jN_j = 1$ where $N_j$ is the market income elasticity of demand for the $j$th…
Stan Shunpike
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6
votes
1 answer
Is a Nash equilibrium anything more than what it is?
(Sorry for the fuzzy title, could not think of something more informative. Feel free to suggest improvements)
This question is somewhat of a generalization of "Osborne, Nash equilibria and the correctness of beliefs". Consider the normal form…
Martin Van der Linden
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6
votes
1 answer
Meaning of $dF(z)$ in expected utility framework
Background: from a Microeconomics course,
$F$ is a cdf. In other words, if $F$ has a density function $f$, then
$$F(z)={\int_{-\infty}^z f(x) dx} $$
Write the Bernoulli utility function $u: \mathbb R_+ \rightarrow \mathbb R$ such that the…
Yejin
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6
votes
1 answer
Bayes Correlated Equilibrium: obedience
I would like your help to understand the definition of obedience in an incomplete information game at p.7 of this paper.
Let me summarise the definition provided in the paper.
There are $N\in \mathbb{N}$ players, with $i$ denoting a generic…
Star
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6
votes
1 answer
If Trump's economic policies are destructive, why is the US economy so healthy?
One doesn't have to look very hard to find suggestions that Trump's economic policies are damaging to the US economy. Example, example, example, example. In fact I barely recall reading any articles in the mainstream media that said that Trump's…
Allure
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6
votes
1 answer
GARP and SARP assumed mononticity?
Monotonicity means the decision maker prefer more goods than less. It is not mentioned in textbook that SARP and GARP preasumed monotonicity, implicitly.
GARP: if $a$ is indirectly revealed preferred to $b$, then $b$ is not directly revealed…
High GPA
- 1,906
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6
votes
1 answer
Is there a general name for the setup in which payoffs are not known exactly but players try to influence each other's perception of the payoffs?
A recent question elsewhere made me look at the "madman strategy" which actually consists of trying to make the opposite player think that he is playing a game of chicken instead of prisoner's dilemma. This can only work, of course, because in…
the gods from engineering
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6
votes
2 answers
How to perform unbalanced panel data regression in R?
I am attempting to perform an unbalanced panel data regression in R. My code is as follows:
pdata <- plm.data(b2, index = c("ticker", "year"))
try1 <- plm(formula = logDipLoanTotal ~ PrimeFiling +
logLiabBefore + logSalesBefore + EmplBefore +…
markiv189
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6
votes
2 answers
Predicted recessions that never happened
It seems generally accepted that recessions are hard to forecast, in both onset and intensity, but the bias seems to be toward rosy outlooks:
The main finding is that, while forecasters are generally aware that recession years will be different…
the gods from engineering
- 3,928
- 15
- 24
6
votes
2 answers
Does the Lucas (1978) asset pricing model feature complete markets?
The Lucas (1978) asset pricing model seems to be one of the workhorse models in finance / asset pricing models. It also seems to be the case that the environment, with claims to $n$ (exogenous) productive units traded, features complete markets. I…
mathsquestions1
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6
votes
1 answer
Econ Intuition for Jacobian inverse in demand system
Consider the following simple linear demand system (in vector notation) with n different products
Demand: $\quad\mathbf{q=B\left(a-p\right)}$
Inverse demand: $\quad\mathbf{p=a-B^{-1}q}$
where $\mathbf{p}$ is the vector of prices and $\mathbf{q}$ is…
bbecon
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6
votes
1 answer
Why are banks allowed to resell mortgages?
It just seems like a way to get around money creation limits imposed by liquidity requirements. For example if a bank creates new money by extending new morgages then securitizes them and resells them, the bank is effectively printing money and…
Jonah
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6
votes
3 answers
What arguments are there in favor of national food self-sufficiency?
National food self-sufficiency is an idea that appeals to many non-economists.
For example, George W. Bush (2001):
It’s important for our Nation to be able to grow foodstuffs to feed our people. Can you imagine a country that was unable to grow…
user18
6
votes
2 answers
Indifference curves and equivalence classes
Last week in class, my professor described indifference curves in the context of modelling consumer choice with multiple goods. He defined a partial-ordering operator $\prec$ and an equivalence operator $\sim$ to manipulate tuples that satisfied the…
Erwan Ounn
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