Download or read book Competitive Equilibrium with Quality Uncertainty written by Papusson Chaiwat and published by . This book was released on 2007 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: The product quality plays important role in modeling competition. This paper explains the behaviors of both consumers and firms by using Monte Carlo simulation when they face quality uncertainty during the competition. Quality uncertainty will lead to market failure, which decreases consumer welfare and distorts profits among firms. Uninformed consumers that face difficulty to recognize quality of each product are easily deceived by firms. Because consumers use price as a signal of product quality, deceiving firms set the high price with low quality (pooling price strategy) to deceive uninformed consumers. Model of simulation shows the Nash equilibrium results for three cases. In the first cases when all consumers are informed, all firms will set reasonable price with their quality (separating price strategy). The utility is the highest. In the second cases when the market has a small fraction of uninformed consumers and low deceiving power of firm, at the Nash equilibrium the lowest quality producing firm will use the pooling price strategy. The consumer utility decreases when the uninformed fraction increases. In the last case with more uninformed consumers or high power of deceiving, at the Nash equilibrium firms that produce the highest quality and the lowest quality will use the separating price strategy whereas the firms that produce medium quality products will use the pooling price strategy. The medium quality firms have incentives to create the unclear quality to consumers by using the pooling price strategy to increase profits. The utility of consumers in last two cases are not maximized because some consumers suffer from consuming low-quality products with high-priced. Consumers will adjust their taste to eliminate quality uncertainty. When no ones will be deceived, welfare of buyers is high but there are still some losses from deceiving attempt. This utility level is lower than in the case when there is no quality uncertainty. Policymakers can solve this problem by giving information about quality to buyers before they make a decision. Government should set up the regulation for the producer to reveal quality of their product in comparison with others opponents or make the consumers guide book to explain the feature of products to consumers. These measures will help eliminate the quality uncertainty to uninformed consumers and raises social welfare of market.

Download or read book Competitive Equilibrium Under Uncertainty written by Roy Radner and published by . This book was released on 1965 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper represents an application of the modern theory of competitive equilibrium to the case of uncertainty. Two theorems are presented: the first sets forth sufficient conditions for the existence of a competitive equilibrium for the case in which each economic agent has a given structure of information available and the second sets forth sufficient conditions for the existence of a competitive equilibrium for the case in which any available structure of information may be used. However, if the costs of obtaining information are included in the analysis, the conditions of the theorem may not be met. This is also true if the costs necessary to perform computations are included. In addition if part of the information available to economic agents concerns the behavior of other agents rather than concerning environmental variables, the conditions of the theorem may not be fulfilled. (Author).

Download or read book Market Uncertainty and Competitive Equilibrium Entry written by Elie Appelbaum and published by . This book was released on 1989 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Temporary competitive equilibrium under uncertainty written by Dieter Sondermann and published by . This book was released on 1971 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Existence of a General Equilibrium with Price Uncertainty written by Graciela Chichilnisky and published by . This book was released on 1992 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Effects of Demand Uncertainty on Equilibrium of Prices and Quantities in a Competitive Market written by Muruvvet Celikbas and published by . This book was released on 2002 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Price Controls Non Price Quality Competition and the Nonexistence of Competitive Equilibrium written by John William Hatfield and published by . This book was released on 2019 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate how price ceilings and floors affect outcomes in continuous time, double auction markets with discrete goods and multiple qualities. When price controls exist, the existence of competitive equilibria (the solution concept of classical market theory) is no longer guaranteed; hence, we investigate the nature of non-price competition and how markets might evolve in its presence. We develop a quality competition model based on matching theory. Equilibria of the quality competition model always exist in such price-constrained markets; moreover, they naturally correspond to competitive equilibria when competitive equilibria exist. Additionally, we characterize the set of equilibria of the quality competition model in the presence of price restrictions. In a series of experiments, we find that market outcomes closely conform to the predictions of the model. In particular, price controls induce non-price competition between agents both in theory and in the experimental environment; market behaviors result in allocations close to the predictions of the model.

Download or read book GENERAL COMPETITIVE EQUILIBRIUM TIME AND UNCERTAINTY written by Heracles M. POLEMARCHAKIS and published by . This book was released on 1994 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book A Competitive Theory of Equilibrium and Disequilibrium Unravelling in Two Sided Matching written by Wing Suen and published by . This book was released on 2000 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: I offer a competitive explanation for the rush toward early contracting in matching markets. The explanation does not rely on market power, strategic motives, or instability of the assignment mechanism. Uncertainty about workers' ability will produce inefficient matching if contracts are formed early. However, the insurance gain from early contracting may outweigh the loss from inefficient matching. If firms are risk neutral, it is the mediocre firms that will have the greatest incentive to offer early contracts. Opening up a market for early contracting will generally benefit the firms and hurt the workers. If firms are sufficiently risk averse, even the lowest-quality firms may want to offer early contracts, and a competitive equilibrium may not exist.

Download or read book Inefficiency of Competitive Equilibrium with Hidden Action and Financial Markets written by Luca Panaccione and published by . This book was released on 2006 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Microeconomics for the Critical Mind written by Fabio Petri and published by Springer Nature. This book was released on 2021 with total page 1395 pages. Available in PDF, EPUB and Kindle. Book excerpt: This textbook explains comprehensively and in rigorous detail not only mainstream microeconomics, but also why many economists are dissatisfied with major aspects of it, and the alternative that they are exploring in response: the Classical-Keynesian-Kaleckian approach. This advanced yet user-friendly book allows readers to grasp the standard theory of consumers, firms, imperfect competition, general equilibrium, uncertainty, games and asymmetric information. Furthermore, it examines the classical approaches to value and income distribution advocated by Adam Smith, David Ricardo and Karl Marx, as well as Post-Keynesian pricing theory, and the microeconomics of variable capacity utilization. Using simple models, it highlights the analytical roots of the important differences between the marginal/neoclassical approach and the classical-Keynesian, critically examining the plausibility and reciprocal consistency of their assumptions. The book also addresses various microeconomic issues not generally included in advanced microeconomics textbooks, including differential land rent, joint-production long-period pricing, capital theory from Walras to the Cambridge debates, the foundations of aggregate production functions, the microeconomics of labor markets, and the long-period theory of wages. Lastly, it presents a unique re-evaluation of welfare economics. Intended for advanced undergraduate and graduate microeconomics courses, this textbook offers a comprehensive introduction to the various approaches and different schools of thought currently competing in the context of economic theory. It can also be used in courses on value and distribution, heterodox economics, and the history of economic analysis. In the present situation, characterized by scientific uncertainty and the co-existence of competing approaches, it will stimulate students to form their own opinion as to which approach appears more promising from a scientific standpoint.

Download or read book Competitive Agents in Certain and Uncertain Markets written by Robert G. Chambers and published by Oxford University Press. This book was released on 2020-11-30 with total page 390 pages. Available in PDF, EPUB and Kindle. Book excerpt: For all its elaborate theories and models, economics always reduces to comparisons. Should we build A rather than B? Will I be better off if I eat D rather than C? How much will it cost me to produce F instead of E? At root, the ultimate goal of economics is simple: assessing the alternatives and finding the best possible outcome. This basic mathematical concept underlies all introductions to the field of economics, yet as advanced students progress through the discipline, they often lose track of this foundational idea when presented with real-world complications and uncertainty. In Competitive Agents in Certain and Uncertain Markets, Robert G. Chambers develops an integrated analytic framework for treating consumer, producer, and market equilibrium analyses as special cases of a generic optimization problem. He builds on lessons learned by all beginning students of economics to show how basic concepts can still be applied even in complex and highly uncertain conditions. Drawing from optimization theory, Chambers demonstrates how the same unified mathematical framework applies to both stochastic and non-stochastic decision settings. The book borrows from both convex and variational analysis and gives special emphasis to differentiability, conjugacy theory, and Fenchel's Duality Theorem. Throughout, Chambers includes practical examples, problems, and exercises to make abstract material accessible. Bringing together essential theoretical tools for understanding decision-making under uncertainty, Competitive Agents in Certain and Uncertain Markets provides a unified framework for analyzing a broad range of microeconomic decisions. This book will be an invaluable resource for advanced graduate students and scholars of microeconomic theory.

Download or read book Reputation and Uncertainty written by Hadi Salehi Esfahani and published by . This book was released on 1986 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Quality Uncertainty and Perception written by Lalit Wankhade and published by Springer Science & Business Media. This book was released on 2010-06-16 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt: It has been observed that the studies of quality are pursued in various disciplines like economics, quality management, and marketing science, and are seen isolated. The treatments imparted to these studies are also different and has the backdrop of discipline in which the work has been pursued. The nature of isolation is equally seen when quality uncertainty and perceived quality were pursued separately without showing any inkling that these can be complimentary. Economist and Nobel Laureate, Akerlof (1970), wrote a seminal piece “The market for lemons: quality uncertainty and market mechanism”, where he described quality uncertainty due to information asymmetry. It refers to the fact that a party in a transaction may have more information than the other. This is information asymmetry. If the seller has more information than the buyer about the product quality, he/she may sell it, as if it is a high-quality product. In reality, it could be a low-quality product. The buyer does not have the information regarding the quality of the offered product. The market condition that led to this transaction is quality uncertainty due to information asymmetry.

Download or read book Risk Uncertainty and Profit written by Frank H. Knight and published by Cosimo, Inc.. This book was released on 2006-11-01 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.

Download or read book Repeat Purchases Under Quality Uncertainty written by Lynda Thoman and published by . This book was released on 1984 with total page 420 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Organization of Economic Activity written by Harold Demsetz and published by . This book was released on 1990 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: