The Fine Picture

2011 ◽  
Author(s):  
Yves Balasko
Keyword(s):  
Demand Function ◽  
Terms Of Trade ◽  
Exchange Model ◽  
Full Measure ◽  
Revealed Preferences ◽  
Trade Intensity ◽  
Demand Functions ◽  
Regular Economies ◽  
Uniqueness Of Equilibrium ◽  
Weak Axiom

This chapter restricts the m-tuple (fi) of demand functions defining the exchange model to belong to ε‎c. In addition to the assumptions made in the previous chapters (recall that ε‎c is a subset of ε‎r), the demand function fi satisfies the weak axiom of revealed preferences for every consumer, and the slightly stronger negative definiteness of the Slutsky matrix for the consumer whose demand function satisfies desirability (A). These stronger assumptions are aimed at giving more economic flesh to the exchange model. As a consequence, the natural projection inherits much stronger properties that give a specificity of its own to the exchange model. The most important properties of the exchange model with (fi) ɛ ε‎c are the regularity of the no-trade equilibria, the openness and full measure (a.k.a., the genericity) of the set of regular equilibria as a subset of the equilibrium manifold, the inclusion of the set of equilibrium allocations in one and only one connected component of the set of regular economies, the uniqueness of equilibrium for all economies belonging to that component, and the interpretation of that property in terms of trade intensity.

The Broad Picture

2011 ◽  
Author(s):  
Yves Balasko
Keyword(s):  
Demand Function ◽  
Exchange Model ◽  
Natural Projection ◽  
Demand Functions ◽  
Regular Economies

This chapter shows that the m-tuple (fi) of demand functions defining the exchange model belongs to ε‎r, i.e., the demand function fi is bounded from below (B) for every consumer and satisfies desirability (A) for at least one consumer. These additional properties will give to the natural projection the very important property of properness. The combination of smoothness and properness will suffice to yield what is now known as the theory of regular economies.

Demand Functions

2011 ◽  
Author(s):  
Yves Balasko
Keyword(s):  
Utility Function ◽  
Budget Constraint ◽  
Utility Functions ◽  
Maximization Problem ◽  
Revealed Preferences ◽  
Consumer Theory ◽  
Market Prices ◽  
Demand Functions ◽  
Classical Part ◽  
Weak Axiom

Rational consumers are assumed to maximize their preferences subject to the constraints they perceive. With preferences that are representable by utility functions, the consumer's problem is modeled as one of maximizing a standard utility function subject to a budget constraint. This maximization problem determines the consumer's demand, a demand that is a function of the consumer's wealth and market prices. These demand functions feature several remarkable properties that make up the bulk of classical consumer theory. The most important ones are Walras law, the weak axiom of revealed preferences, and the negative definiteness of the Slutsky matrices. An important part of consumer theory is devoted to establishing these properties of demand functions when the latter come from the budget constrained maximization of standard utility function. This chapter focuses on this classical part of the theory. It also characterizes consumer's demand functions simply by their properties.

scholarly journals Regular Infinite Economies

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Enrique Covarrubias
Keyword(s):  
Demand Function ◽  
Excess Demand ◽  
Natural Projection ◽  
Banach Manifold ◽  
Equilibrium Manifold ◽  
Equilibrium Set ◽  
Regular Economies

The main contribution of this paper is to place smooth infinite economies in the setting of the equilibrium manifold and the natural projection map à la Balasko. We show that smooth infinite economies have an equilibrium set that has the structure of a Banach manifold and that the natural projection map is smooth. We define regular and critical economies, and regular and critical prices, and we show that the set of regular economies coincides with the set of economies whose excess demand function has only regular prices. Generic determinacy of equilibria follows as a by-product.

scholarly journals LEARNING TO PLAY BEST RESPONSE IN DUOPOLY GAMES

2004 ◽  
Vol 06 (03) ◽  
pp. 443-459 ◽  
Author(s):  
JAN WENZELBURGER
Keyword(s):  
Demand Function ◽  
Optimal Strategies ◽  
Market Demand ◽  
Response Behavior ◽  
Estimation Errors ◽  
Demand Functions ◽  
Best Response ◽  
Game Theoretic ◽  
Payoff Functions ◽  
Duopoly Market

We consider a quantity-setting duopoly market where firms lack perfect knowledge of the market demand function. They use estimated and therefore misspecified demand functions instead and determine their optimal strategies from the corresponding subjective payoff functions. The central issue of this paper is the question under which conditions a firm can learn the true demand function as well as the response behavior of its competitor from repeated estimations of historical market data. As soon as estimation errors are negligible, a firm is able to play best response in the usual game theoretic sense.

China’s trade and economic relations with Algeria, Morocco, and Mauritania in the 21st century

2021 ◽  
pp. 55
Author(s):  
Kirill S. Kravtsov
Keyword(s):  
Service Sector ◽  
Terms Of Trade ◽  
Trade Flows ◽  
Trade Intensity ◽  
Economic Relations ◽  
Trade Relations ◽  
Intensity Index ◽  
Mineral Sector ◽  
Trade Turnover ◽  
Leading Position

The study analyzes the current level of China's trade and economic relations with Algeria, Morocco, and Mauritania. The research methods include comparative-historical and economic analysis with the use of trade intensity and trade complementarity indices. The author concluded that Algeria enjoys a leading position in terms of trade flows between the countries and investment from China. Morocco is in the second place in terms of trade turnover, while Mauritania has the smallest volume. The most diversified trade is between the PRC and Morocco, as there is not only the mineral sector (as in the case of the other two countries), but also the services and electronics sectors. Traditional areas of trade and economic cooperation in the field of mining have demonstrated a low level of trade complementarity for the China-Algeria, China-Mauritania pairs. The most promising industries, according to the results of the study, are China’s machinery, the service sector and agriculture. The intensity of trade flows was higher in the period 2010-2019 on the part of the PRC in the China-Algeria, China-Morocco pairs. The disparity in the intensity of trade progressed throughout the period for the China-Algeria pair, while the intensity remained the same for the China-Morocco pair. Mauritaniais the country with the highest trade intensity index with the PRC. Moreover, the intensity on the part of Mauritania was higher than on the part of the PRC throughout the entire period. The data obtained confirmed the importance of the region in China's foreign trade relations, a trend that may develop in the future.

Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty

2006 ◽  
Vol 6 (1) ◽  
Author(s):  
Johan N.M. Lagerlöf
Keyword(s):  
Hazard Rate ◽  
Demand Uncertainty ◽  
Demand Function ◽  
Market Price ◽  
Cournot Model ◽  
Weak Assumption ◽  
Equilibrium Uniqueness ◽  
Linear Demand ◽  
Uniqueness Of Equilibrium ◽  
Monotone Hazard Rate

If Cournot oligopolists face uncertainty about the intercept of a linear demand function and if the realized market price must be non-negative, then expected demand becomes convex, which can create a multiplicity of equilibria. This note shows that if the distribution of the demand intercept has a monotone hazard rate and if another, rather weak, assumption is satisfied, then uniqueness of equilibrium is guaranteed.

Distinct Orbitofrontal Regions Encode Stimulus and Choice Valuation

2009 ◽  
Vol 21 (10) ◽  
pp. 1956-1966 ◽  
Author(s):  
William A. Cunningham ◽  
Amanda Kesek ◽  
Samantha M. Mowrer
Keyword(s):  
Decision Making ◽  
Economic Theory ◽  
Orbitofrontal Cortex ◽  
Revealed Preferences ◽  
Left Posterior ◽  
Important Processing ◽  
Objective Value ◽  
Adaptive Decision Making ◽  
Weak Axiom

The weak axiom of revealed preferences suggests that the value of an object can be understood through the simple examination of choices. Although this axiom has driven economic theory, the assumption of equation between value and choice is often violated. fMRI was used to decouple the processes associated with evaluating stimuli from evaluating one's actions. Whereas activity in left posterior areas of the orbitofrontal cortex (OFC) was associated with processing the objective value of stimuli, activity in medial anterior areas of the OFC was associated with accepting high value gambles and rejecting low value gambles; that is, making correct decisions. These data demonstrate that distinct areas of the OFC provide dissociated representations for use in adaptive decision-making and suggest an important processing distinction between the concepts of good/bad and right/wrong.

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