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3 answers
Clarification about Market Structure Oligopoly or Monopoly
As per the definition i found in the internet,
Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share.
Monopoly, where there is only one provider of a product or service.
Consider…
Rajneesh Kumar Gobin
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Are charitable donations on someone's behalf generally an effective incentive?
A study done in Sweden on 153 female, would-be blood donors showed
surprising results. The women were divided into three groups–
voluntary donation, paid donation, and paid donation with the
immediate option to donate to children’s charity.…
user48956
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5
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2 answers
How to derive utility possibility frontier?
I'm trying to derive the utility possibility frontier of a economy whose consumption contract curve is $$y_A = \frac {y} {x} x_A$$ and $$y_B = \frac {y} {x} x_B$$where $x_A + x_B = x$ and $y_A + y_B= y$.
$$U_i = \sqrt {x_iy_i}$$
While deriving the…
dexter
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1 answer
Link goods to sector (UCC to NAICS)
Universal Classification Code (UCCs) are six digit codes that identify items or groups of items. Here are some UCCs:
190903 Food and non-alcoholic beverages at restaurants, cafes, fast food places on trips
190904 Food and beverages purchased and…
FooBar
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5
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0 answers
Can repeated bidding in an auction make each player's type common knowledge?
In Benjamin Edelman, Michael Ostrovsky, and Michael Schwarz(2007), there's a hand-waving argument to justify their setting as a game of complete information:
we assume that all values are common
knowledge: over time, advertisers are likely to
…
Metta World Peace
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5
votes
1 answer
Selection bias - Will multiple regressions solve the problem?
Now I have a data from an African country concerning (i) levels of corruption across public sectors and (ii) perceptions of service quality from households (bad, medium and high). The data consist two types of household: those who have used the…
Khan
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5
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1 answer
The relation between the Black-Scholes model and quantum mechanics
As an active participant on the Physics Stack Exchange I have, on several separate occasions, run into some vague remarks about the 'intimate relation' between the famous Black-Scholes model in economics and the Schrödinger equation that appears in…
Danu
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5
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4 answers
Examples of non-differentiable problems in economics
As a research project, we're investigating various algorithms developed for non-differentiable, convex (or concave, if you're into economics) optimization. I'd like to find some good examples of real problem formulations that arise in different…
Benjamin Lindqvist
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1 answer
How to write the dual problem of this maximization problem?
On this note for Shapley-Shubik model, there's a maximization problem:
$$\max_{x_{ij} \in \mathbb{R}^{M \times N}}\sum_{j \in N}\sum_{i \in M}v_{ij}x_{ij}$$
$$\text{s.t.} \ \sum_{j \in N}x_{ij} \leq 1 \ \forall i \in M$$
$$\\ \sum_{i \in M}x_{ij}…
Metta World Peace
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5
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2 answers
Why is the income effect zero for quasilinear utility functions?
Suppose I have the utility function $$U(x,y) = \sqrt{x} + y$$
subject to budget constraint
$$p_x x + p_y y = m$$
Then
$$x_M =\frac{p_y^2}{4 p_x^2}$$
$$y_M = \frac{m}{p_y} - \frac{p_y}{4 p_x}$$
where $M$ denotes Marshallian.
Now suppose I…
Stan Shunpike
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5
votes
2 answers
Why is exponential discounting considered rational?
I have repeatedly heard a claim that only an exponential discounting is the rational one, however I've never seen the proof. Why is it so?
Intuitively, we would expect exponential discount since the economic growth (and compound interest) is…
marmistrz
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5
votes
1 answer
Yield and interest rate?
Are they the same thing?
Is yield the annualized return rate?
Why when yield rise, yearly return increases but price falls?
Student
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votes
1 answer
Question on Isolating The Wealth Effect in Analysis of Changes in Price-Wealth Combinations - MWG Exercise 2.F.3 Parts (e) and (f)
I am doing exercises in Chapter 2 of MWG. I feel I got completely lost in exercise 2.F.3 parts (e) and (f).
$\textbf{Exercise}$
Here is the question:
I have solved parts (a) to (d). In particular,
I denote $\mathbf{p}^1 = (p_1^1,p_2^1) =…
Shenron
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5
votes
2 answers
Continuous logit framework
I am reading Dupuy & Galichon (2014), which extend the estimation of matching model in Choo & Siow (2006) to continuous types. The way they build the continuous logit model is based on the insights of Cosslett (1988) and Dagsvik (1994) which "have…
Alalalalaki
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5
votes
1 answer
Do assets without rental income streams appreciate relative to assets with rental income streams?
In his book "The Armchair Economist", economist Steve Landsburg critiques an op-ed concerning the relative value of stocks and real estate:
James K. Glassman wrote a piece in The New Republic to prove that stocks are better investments than real…
Keshav Srinivasan
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