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Mechanism Design
Mechanism design is a field in economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ... and game theory Game theory is the study of mathematical model A mathematical model is a description of a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. ... that takes an objectives-first approach to designing economic mechanisms or incentives An incentive is something that motivates or drives one to do something or behave in a certain way. There are two type of incentives that affect human decision making. These are: intrinsic and extrinsic incentives. Intrinsic incentives are t ..., toward desired objectives, in strategic settings, where players act rationally. Becaus ...
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Stanley Reiter MDdiagram
Stanley may refer to: People * Stanley (name) Stanley is a toponymic surname dating from the 11/12th century contraction of ''Stan'' (a form of "Stone") and ''wikt:leigh, Leigh'' (meadow), later also being used as a masculine given name. Persons with the given name * Stanley Adams (singer ..., a family name and a masculine given name * Stanley (Brazilian footballer) (born 1985), born Stanley Richieri Afonso, Brazilian footballer Places Australia * Stanley, Tasmania Stanley is a town on the north-west coast of Tasmania, Australia. Travelling west, Stanley is the second-last major township on the north-west coast of Tasmania, Smithton, Tasmania, Smithton being the larger township in the Circular Head municipa ... * Stanley, Victoria Stanley is a small town approximately from Beechworth in Victoria noted for its apple An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple fruit tree, trees are agriculture, cultivated worldwide a ...
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Revelation Principle
The revelation principle is a fundamental principle in mechanism design function f(\theta) maps a type profile to an outcome. In games of mechanism design, agents send messages M in a game environment g. The equilibrium in the game \xi(M,g,\theta) can be designed to implement some social choice function f(\theta). Me .... It states that if a social choice function function f(\theta) maps a type profile to an outcome. In games of mechanism design, agents send messages M in a game environment g. The equilibrium in the game \xi(M,g,\theta) can be designed to implement some social choice function f(\theta). Me ... can be implemented by an arbitrary mechanism (i.e. if that mechanism has an equilibrium outcome that corresponds to the outcome of the social choice function), then the same function can be implemented by an incentive-compatible-direct-mechanism (i.e. in which players Incentive compatibility, truthfully report type) with the same equilibrium outcome (payoffs). In mechan ...
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Price Of Anarchy
The Price of Anarchy (PoA) is a concept in economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ... and game theory Game theory is the study of mathematical model A mathematical model is a description of a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. ... that measures how the efficiency Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and withou ... of a system degrades due to selfish behavior of its agents. It is a general notion that can be extended to diverse systems and notion ...
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Fundamental Theorems Of Welfare Economics
There are two fundamental theorems of welfare economics. The first states that in economic equilibrium, a set of Complete market, complete markets, with complete information, and in perfect competition, will be Pareto optimal (in the sense that no further exchange would make one person better off without making another worse off). The requirements for perfect competition are these: # There are no externality, externalities and each actor has perfect information. # Firms and consumers Price-taking, take prices as given (no economic actor or group of actors has market power). The theorem is sometimes seen as an analytical confirmation of Adam Smith's "invisible hand" principle, namely that ''competitive markets ensure an efficient allocation of resources''. However, there is no guarantee that the Pareto optimal market outcome is socially desirable, as there are many possible Pareto efficient allocations of resources differing in their desirability (e.g. one person may own everything ...
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Tragedy Of The Commons
In economic science, the tragedy of the commons is a situation in which individual users, who have open access to a resource unhampered by shared social structures or formal rules that govern access and use, act independently according to their selfishness, own self-interest and, contrary to the common good of all users, cause depletion of the resource through their uncoordinated action. The concept originated in an essay written in 1833 by the British economist William Forster Lloyd, who used a hypothetical example of the effects of unregulated grazing on common land (also known as a "common") in Great Britain and Ireland. The concept became widely known as the "tragedy of the commons" over a century later after an article written by Garrett Hardin in 1968. Although open-access resource systems may collapse due to overuse (such as in over-fishing), many examples have existed and still do exist where members of a community with regulated access to a common resource co-operate to e ...
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Continuous Distribution
In probability theory and statistics, a probability distribution is the mathematical Function (mathematics), function that gives the probabilities of occurrence of different possible outcomes for an Experiment (probability theory), experiment. It is a mathematical description of a Randomness, random phenomenon in terms of its sample space and the Probability, probabilities of Event (probability theory), events (subsets of the sample space). For instance, if is used to denote the outcome of a coin toss ("the experiment"), then the probability distribution of would take the value 0.5 (1 in 2 or 1/2) for , and 0.5 for (assuming that fair coin, the coin is fair). Examples of random phenomena include the weather conditions at some future date, the height of a randomly selected person, the fraction of male students in a school, the results of a Survey methodology, survey to be conducted, etc. Introduction A probability distribution is a mathematical description of the probabiliti ...
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Single-crossing Condition
Single Crossing Condition in Probability In economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ..., the single-crossing condition or single-crossing property refers to how the probability distribution of outcomes changes as a function of an input and a parameter. Cumulative distribution function In probability theory Probability theory is the branch of mathematics Mathematics (from Greek: ) includes the study of such topics as numbers (arithmetic and number theory), formulas and related structures (algebra), shapes and space ...s ''F'' and ''G'' satisfy the single-crossing condition if there exists a y^* such that \forall x, x \ge y^* \implies F(x) \ge G(x) and \forall x, x \le y^* \implies F(x) \le G(x); that is, function h(x) = F(x)-G(x) crosse ...
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Margarine
Margarine (, also , ) is a spread used for flavoring, baking and cooking. It is most often used as a substitute for butter. Although originally made from animal fats, most margarine consumed today is made from vegetable oil. The foodstuff was originally named ''oleomargarine'' from Latin for ''oleum'' (olive oil) and Greek ''margarite'' (pearl indicating luster). The name was later shortened to ''margarine''. Margarine may be chosen for a number of reasons including lower cost, ease of availability, evidence (primarily relevant for vegetable-based margarines) that it is healthier than butter, a desire to avoid consuming animal-based products (of particular concern for vegans and also based on the assumption that the margarine is vegetable-based) and/or a simple personal preference to butter and/or other spreads on account of taste. Butter is made from the butterfat of milk, whereas modern margarine is made mainly of refined vegetable oil and water. In some places in the United S ...
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Butter
Butter is a dairy product Dairy products or milk products are a type of food Food is any substance consumed to provide Nutrient, nutritional support for an organism. Food is usually of plant, animal or Fungus, fungal origin, and contains essential nutrients, such as ... made from the fat and protein components of milk Milk is a nutrient A nutrient is a substance used by an organism to survive, grow, and reproduce. The requirement for dietary nutrient intake applies to animal Animals (also called Metazoa) are multicellular eukaryotic organisms that ... or cream Cream is a dairy product Dairy products or milk products are a type of food Food is any substance consumed to provide nutritional support for an organism In biology, an organism (from Ancient Greek, Greek: ὀργανισμός, ' .... It is a semi-solid emulsion An emulsion is a mixture of two or more liquids that are normally Miscibility, immiscible (unmixable or unblendable ...
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Mechanism Design
Mechanism design is a field in economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ... and game theory Game theory is the study of mathematical model A mathematical model is a description of a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. ... that takes an objectives-first approach to designing economic mechanisms or incentives An incentive is something that motivates or drives one to do something or behave in a certain way. There are two type of incentives that affect human decision making. These are: intrinsic and extrinsic incentives. Intrinsic incentives are t ..., toward desired objectives, in strategic settings, where players act rationally. Becaus ...
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Marginal Rate Of Substitution
In economics, the marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility As a topic of economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals within thos .... At equilibrium consumption levels (assuming no externalities), marginal rates of substitution are identical. The marginal rate of substitution is one of the three factors from marginal productivity, the others being marginal rates of transformation and marginal productivity of a factor. As the slope of indifference curve Under the standard assumption of neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are driven by the supply and ...
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