Book•
Intermediate microeconomics : A modern approach
01 Jan 2006-
TL;DR: The Varian approach as mentioned in this paper gives students tools they can use on exams, in the rest of their classes, and in their careers after graduation, and is still the most modern presentation of the subject.
Abstract: This best-selling text is still the most modern presentation of the subject. The Varian approach gives students tools they can use on exams, in the rest of their classes, and in their careers after graduation.
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Posted Content•
TL;DR: In this article, the authors present a model of competition between web search algorithms, and study the impact of such competition on user welfare, showing that when search engines derive utility only from customers to whom they show relevant results, and every equilibrium of the resulting game achieves at least half of the welfare that could be obtained by a social planner, this bound also applies whenever the likelihood of selecting a given engine is a convex function of the probability that a user's demand will be satisfied.
Abstract: We present a model of competition between web search algorithms, and study the impact of such competition on user welfare. In our model, search providers compete for customers by strategically selecting which search results to display in response to user queries. Customers, in turn, have private preferences over search results and will tend to use search engines that are more likely to display pages satisfying their demands.
Our main question is whether competition between search engines increases the overall welfare of the users (i.e., the likelihood that a user finds a page of interest). When search engines derive utility only from customers to whom they show relevant results, we show that they differentiate their results, and every equilibrium of the resulting game achieves at least half of the welfare that could be obtained by a social planner. This bound also applies whenever the likelihood of selecting a given engine is a convex function of the probability that a user's demand will be satisfied, which includes natural Markovian models of user behavior.
On the other hand, when search engines derive utility from all customers (independent of search result relevance) and the customer demand functions are not convex, there are instances in which the (unique) equilibrium involves no differentiation between engines and a high degree of randomness in search results. This can degrade social welfare by a factor of the square root of N relative to the social optimum, where N is the number of webpages. These bad equilibria persist even when search engines can extract only small (but non-zero) expected revenue from dissatisfied users, and much higher revenue from satisfied ones.
2 citations
TL;DR: In this article, the Comanor-Wilson Minimum Efficient Size (MES) measure was used to investigate the validity of the MES measure and the results indicated that technical efficiency, size and age are the factors that compel MES to yield the same prediction as the DEA approach.
Abstract: The present article attempts to investigate the validity of the Comanor–Wilson Minimum Efficient Size (MES) measure. The basic assumption is that firms that have exhausted scale economies are in non-increasing returns to scale. The same firms are also assumed to have a size greater than MES estimated on sales (total turnover), employment or fixed assets. Data Envelopment Analysis (DEA) is used, on a sample of firms in three Greek manufacturing industries, to classify firms in operation according to increasing or non-increasing returns to scale. On the basis of the results of the DEA input oriented model, the MES measure correctly predicts over 85% of the cases. A probit model is applied to those cases that are not identically predicted by MES concerning returns to scale. Results indicate that technical efficiency, size and age are the factors that compel MES to yield the same prediction as the DEA approach.
2 citations
Posted Content•
01 Jan 2007
TL;DR: In this article, an iterative model for repeated Cournot games is presented, which solves time paths for repeated games allowing us to see how output, price, profits, and market share in the two-firm case change over time when one firm experiences per turn marginal cost reductions.
Abstract: This paper presents an iterative model, programmed in Mathematica, which solves time paths for repeated Cournot games allowing us to see how output, price, profits, and market share in the two-firm case change over time when one firm experiences per turn marginal cost reductions. By adjusting the marginal cost reduction rate for one firm and iterating, students can explore the various solutions and gain a better understanding of how the variables in the model diverge over time and the properties of that divergence. More generally, students gain experience designing models and programming in Mathematica and furthermore develop a deeper understanding of iteration in simulations.
2 citations
TL;DR: In this paper, a multi-category utility model is proposed to increase the diversity of recommendations over the entire session while improving the relevance of each recommendation within the session, and the proposed approach makes 6%-11% more accurate recommendations than optimized alternatives.
Abstract: The diversity of a set of recommendations can improve consumers’ satisfaction with the personalized recommender system. However, diversifying a list of products for a one-shot recommendation sacrifices relevance, which can reduce its value. We identify a popular scenario, sessions of online news consumption, where one can increase the diversity of recommendations over the entire session while improving the relevance of each recommendation within the session. Our approach is based on a multi-category utility model that captures consumers’ preference towards different types of content, how quickly they satiate with one type and substitute it with another, and how they trade off their own costly search efforts with selecting from the recommended articles to find new content. Taken together, these three elements enable us to characterize how utility maximizing consumers construct diverse “baskets” of content over the course of each session, and how likely they are to click on content recommended to them. We estimate this model using a clickstream dataset from a large international media outlet and apply it to determine the most relevant content at different stages of an online session. We demonstrate that by taking into account how consumers sequentially select content from different categories over time within a session, we not only recommend more diverse content over a session, but also recommend more relevant content than methods that do not incorporate such information. The diversity of the content recommended by the proposed approach closely matches the diversity sought by individual readers in their actual natural consumption — exhibiting the lowest concentration-diversification bias when compared to other personalized recommender systems. Meanwhile, the proposed approach makes 6%–11% more accurate recommendations than optimized alternatives. Using a policy simulation, we estimate that recommending content using the proposed approach would result in visitors reading 57% additional articles at the studied website, which has direct revenue implication for the publisher of this site.
2 citations
01 Jun 2019
TL;DR: In this article, the authors analyzed the causes and design and construct the framework of China's emissions trading system and found that the government should bear the short-term cost, and use the electronic trading system to establish a broad market with a wide range of participants to reduce the operating cost of the system.
Abstract: China's pollutant discharge management is based on the current government-led administrative approval system. Although some regions have carried out the pilot work of emission trading, they have not formed a legal basis and a system of standardization and haven't been promoted. The purpose of this paper is to analyze the causes and design and construct the framework of China's emissions trading system. Firstly, the resource allocation efficiency of emission trading is analyzed from the micro-economic point of view, and the total transaction cost is analyzed by the dynamic analysis method. Then the obstacle principle of system implementation is found. Although the establishment of a market with clear property rights contributes to the reduction of total transaction costs, the rapid increase of government transaction costs in the short term has affected the implementation of the system. The conclusion is that the government should bear the short-term cost, and use the electronic trading system and establish a broad market with a wide range of participants to reduce the operating cost of the system, so as to achieve the promotion and effective operation of the emission trading system. Keywords—transaction cost theory; emission trading; system construction
2 citations
Cites background from "Intermediate microeconomics : A mod..."
...exchange of emission permits.[2] As shown in the figure below, the main participants in emission trading are Enterprise A and Enterprise B....
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