my friend is taking a game theory class. for extra credit, everyone in the class (40 people) were asked to guess a number between 1-100. the person who guesses closest to ⅔ of the average gets their guess as extra percentage at the end of the year.

some friends and i came to the conclusion that the nash equilibrium here is 1.

the twist i added for fun that has us stumped is what if you only get the extra credit if you are the sole person to guess that number.

two scenarios:

1. any number which is guessed more than once is disqualified for selection (i.e., still included in the average, but you are no longer eligible for the extra credit).

2. ⁠if multiple people guess the number which is closest to the nash equilibrium, nobody gets the extra credit.

for each scenario, what number would you guess and why?

How increasing interest rates leads to an increase in bond yields?
Also is that the reason why an increase in interest rates will increase a government’s budget deficit, because more tax revenue will go towards servicing the debt (bond yields)?
I recently saw a graph that showcased that an increase in interest rates in the USA will increase the federal government’s budget deficit and I began to wonder.

When comparing a potential AI bubble with the dot-com bubble, how much does the distinction between public and private markets matter?

Public markets allow expectations to be repriced continuously, whereas private valuations are negotiated through funding rounds. To what extent can existing investors sustain those valuations by providing follow-on capital, limiting the price discovery that might otherwise trigger a correction?

I’m particularly interested in whether this gives investors enough control to keep financing companies until their earnings justify their valuations, or whether capital constraints and the eventual need for liquidity make that adjustment unavoidable.

If so, will their then be no Ai bubble?

Same as the title, if a country, particularly Costa Rica, has observed polluted rivers due to the advanced farming techniques that include overuse of chemicals( fertilisers and Pesticides ) then can we consider the overuse of chemicals a case of negative consumption externality or is it negative production externality?

Over the past few weeks, I've seen a lot of articles focussing on France's unsustainable debt. Is there any particular reason why economists are particularly concerned about France. Looking at common measurements of debt, France doesn't seem to be the worst of the 'developed' countries:

• Debt-GDP: Both Italy, the USA, and Japan have a higher debt-GDP ratio.
• Deficit-GDP: The UK, Belgium, and the US have a higher deficit-GDP ratio.
• Bond Yields: UK / USA / Australia all have higher bond yields.

Am I looking at the wrong metrics? Is there a reason why more focus is being placed on France's debt situation as opposed to the US / UK?

Is there any theorization/simulation of what would happen if all organizations that have them had to get rid of their endowments? I know it would have a large impact, but I can’t even start to imagine what it would be, and can’t seem to find much through my own searches.

I recently joined a project studying indigenous communities. I unfortunately cannot reveal too many details due to confidentiality. It is related to socio-economic aspects of the communities.

I am studying 3 tribes in 2 geographical regions. The study has both a quantitative as well as a qualitative aspect. The doubt I have is regarding quantitative sampling. I will give a population breakdown

Region 1

Community A = 4558

Community B = 3765

Community C = 2366

Region 2

Community A = 1323

Community B = 676

Community C = 390

How to determine a representative sample which adequately represents all 3 communities? When I used Cochran's (1977) method of estimating sample size, I got a total required sample of 374 (after finite population correction), which then further subdivided proportionally based on the population sizes of each community in each region. However, that made the required sample from region 2 very small (38, 19 and 11 samples for each group in region 2).

My supervisor told me to calculate sample size separately for each community. But doing so gives an unreasonably large sample size which I cannot feasibly cover in the project period.

Need advice. What's the correct method here? Is there any other reputed method other than Cochran's to be used here?

I don't know if this is the correct sub to ask this. I am an economics masters graduate so i thought I'd ask here. I am very new to applied research. I didn't want to rely on AI either

Please help

Having been to Costa Rica and Panama, both countries partially use the United States Dollar, but they also both have local currencies too (the Costa Rican colón and the Panamanian balboa).

They don't use their local currencies for everything, but then why wouldn't they fully switch to the United States Dollar either (like El Salvador or Ecuador)? Sure, they can maintain monetary control if they don't fully switch to the United States Dollar, but if that's their goal, why not avoid partial dollarisation and use their local currencies for everything instead?

This system of partial dollarisation is also something that seems to be official government policy in Costa Rica and Panama. It's not like, say, elite shops in the USSR that only accept payment in western currencies; or the United States Dollar being used as the de-facto currency during hyperinflation in Venezuela, Argentina and Zimbabwe.

If maximizing profits has always been the incentive, what has fundamentally changed in the last 10 years that's made companies increasingly willing to sacrifice product quality and customer satisfaction?

Wouldn't this have been something companies have done for centuries if the goal is to maximize shareholder value?

So currently I have a Dell window pc. Been having it for 3 years and it always makes a sound. And it is really glitchy. I thought ab buying a MacBook Neo, that I only can use for school 80-90%. Do u think it is ok

I was mainly thinking about Iran. But this could apply to a greater or lesser extent to a number of countries/economies.

We know how sanctions can supress economic growth, cutting countries from outside capitol or markets and make it far harder to import key components needed to develop certain industries etc.

But are there any economic benefits to an economy being forced to adapt and develop on under such restrictions

Do long sanctioned countries maintain or develop their domestic industrial and skill base and supporting supply chains at a time where countries who have access to the global market have seen their own domestic industries dwindle or never develop where the cannot compete with imports? Does this lack of outside capitol but also outside competition make the economy more resilient, or money in the country circulate differently etc.

I suppose one example would be somewhere tiny like Cuba developing a pharmaceutical research and manufacturing industry because they couldn't import certain medications.

I understand most sanctioned countries still have allies willing to trade with them, and good amount of smuggling and grey market dealing goes on.

I was mainly thinking about Iran. But this could apply to a greater or lesser extent to a number of countries/economies. Do long term sanctions force countries to develop their internal industries and supply chains at a time where countries who have access to the global market have seen them dwindle? Does this lack of outside capitol make the money in the country circulate differently etc.

I understand most sanctioned countries still have allies willing to trade with them, and good amount of smuggling and grey market dealing goes on.

For example if each way to make money is taxed at 20%, the agents' rational profit-seeking behaviour shouldn't change compared to a situation with no taxation at all right ?

This is a thread for short questions that don't merit their own post as well as career and school related questions. Examples of questions belong in this thread are:

Where can I find the latest CPI numbers?

What are somethings I can do with an economics degree?

What's a good book on labor econ?

Should I take class X or class Y?

You may also be interested in our career FAQ or our suggested reading list.

There is plenty to learn before 1776 and some ideas and theories are still in use today. For instance, the French Physiocrats are nowhere near discussed as often as Adam Smith even though the first modern economic model and the term "laissez faire" came from them. Another example would be how mercantilism trade policies affected future economic theory. Why is this the case?

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Hi

As part of my degree, I'm able to choose an elective in either Macroeconomics (with data analytics) or Microeconomics, I chose Macroeconomics as the modules includes additional data analytics components and sounds more interesting.

However will I struggle with macro if I don't have much background in micro? I'll be joining the econ department in 2nd semester.

I'm on year 2/4 of my degree and I can continue doing Macroeconomics alongisde my main specialism until 4th year, where 100% of my credits will be dedicated to my specialism.

Thanks

Hi everyone, I'm currently a Econ senior taking Game Theory. I've been going to every class, taking notes and studying but I continue to fail the quizzes. I think I have a disconnect when it comes to the math but at this point I don't know.

I have a midterm next week and I've started studying for it but I'm nervous I'm going to fail it. If someone could help me understand it or possibly teach some of it to me I would appreciate it. The topics are Simultaneous Games, Sequential Games, Mixed Strategies, and Repeated Games.

Thank you

So from india a developing country we have a lot of subsidy programs from state to national level except on fuel which the goverment taxes heavily .

Yet isnt subsidised fuel better for the economy and gdp as it goes to productive sectors private buisnesses and all round increases purchasing power.

Yet cash transfers food fertilisers agri public transport subsidies etc are given .

So what kind of subsidies do you think helps an economy that produces wealth rather than distributes existing one.

I understand Amex model for revenue for platinum, revolves around merchant fees, annual fees, interest charges on balances not paid in full, merchant deals.
https://www.investopedia.com/articles/markets/012715/how-american-express-makes-its-money.asp

In turn there is a cost to paying out credit card rewards and Amex platinum credits but I don’t know how much burden falls on Amex vs merchant.

I am also aware that active duty military card users don’t pay the annual fee but still get all the annual credits.

https://upgradedpoints.com/credit-cards/reviews/american-express-platinum-card/active-duty-military-benefits/

I will come up with an example and want to understand if this is a profitable customer for Amex.

1. The user is in military so pays no annual fee
2. The user is changing their spending habits like going out of their way to buy from Saks to take advantage of the annual credits.
3. The user credit card rewards redeemed perfectly cancels out with the amount of merchant fees Amex collects from this user spending.
4. User pays in full each month generating no interest income.

Points 1, 3 and 4 means user is is net 0 profit for annual fee, merchant fees and interest. Therefore Amex must rely on the revenue from point 2 of user buying things they don’t need to cancel out the amount that is paid out as credits to the user.

Would there be enough revenue from user buying things they do not need to cancel out the costs of paying out credits to this user?

I see shops and restaurants full of people. Airport is always busy. Food prices and energy prices through the roof.
So what’s the real situation? I hear people saying they are struggling financially, but the high street seems busy. Interest rates are destroying people who are remortgaging now. Salaries in the UK are ridiculously low, rail travel ridiculously expensive.
What is the real economic situation? Why aren’t we in a recession when discretionary spending surely has been compressed by high cost of living and low wages? I don’t understand it - and of course I am not an economist. Thankful for any comments to help me understand the whole scenario as it all
Seems contradictory to me.

I find that letting the economy fluctuate works as a selection mechanism that weeds out inefficient firms and frees up capital for more productive activities. Fluctuations can also spur innovation and leads to the effective investments.

There seems be an assumption that if everyone invested in the stock market that everyone would earn historical stock-market returns indefinitely For every seller of stock there has to be a buyer. In the case where population is declining, wouldn't a point be reached where there aren't enough buyers to buy the much larger retiring generations' stocks historic rates of return? In other words, doesn't a declining population create a risk of fewer buyers for retiring generations' stocks, which could depress historical asset returns?