Microeconomics FHS

Can you name the Microeconomics FHS?

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Adverse selection in the market for loans (_ _)
Even if EUT is criticised, it might be the best description of __ decision making
Public goods might have to be provided through __ tax on other markets
A higher real interest rate __ the chance of collusion
P_ P_ indicates collusion (Rees, 1993)
Steep loss function? Use a _
A strategy that is a best response to whatever others choose
Investment by an incumbent changes the rules of (market entry) game
Firms are endowed with a tradeable carbon license that diminishes by __% every year
A specification of probabilities with which to choose between pure strategies
EUT lacks a distinction between __ and __
If people adhere to rationality (in _ choice theory) over _ probabilities then expected utility analysis remains valid.
Leniency programs __ the chance of collusion
Crucially, threats such as limit pricing must be __ in order to deter entry
A set of prices where (amongst other things) supply = demand for every good.
Mergers have __ and __ effects on competition.
A higher ease of detecting deviation __ the chance of collusion
SPE rules out __ threats to entry
A set of strategies where each is the best response to the other
Outlined signalling: the informed party takes action to credibly convey information about themself
Demonstrated adverse selection in market for lemons
Empirically showed that the correlation between wages and education is highest when productivity is hard to observe
Defined coefficients of risk aversion
(2004) efficiency gains can offset the costs of lower competition
HintAnswer
Sellers and buyers have different information: this leads to only the 'bad buyers' or 'bad sellers' participating in the market
Prospect Theory/loss aversion
Invested in a £3bn battery factory
A higher frequency of sales __ the chance of collusion
__ equilibrium cannot exist in insurance market with high risks and low risks
When one lottery pays at least as well as another in every state and better in at least one state
Rabin concludes that we should reject EUT for __ stakes
__ axiom of EUT can be undermined by portfolio theory
Measure of industry concentration
Mergers that lead to a 'substantial lessening of competition' are banned under the 2002 __ __
Subjective choice theory requires a known number of _ of the world
The idea that a mean preserving spread is disliked
_ Paradox: Flip a coin as many times until tails - receive 2^no.ofheads. Expected value is infinite but few would pay more than around 25 dollars.
Cap and trade presents __ problems for small companies
When each stage game of a multi-stage game constitutes a Nash equilibrium
In carbon policy, a __ is preferred to a __ because of the steep loss function
Complete specification of what to do whenever a choice could have to be made
EUT neglects __ probability: which is the state of real life lotteries and uncertainty
A weakness of EUT is that it treats __ as __ risk
__ axiom of EUT: two gambles mixed with a third maintain the same preference order
Any feasible payoff pair giving each player at least her stage game eqn payoff can be supported as SPE if delta is high enough
Allais' paradox represents the __ effect.
Coordination difficulties __ the chance of collusion
An agent is risk averse if and only if their utility of wealth curve is c__
HintAnswer
__ axiom of EUT: any two lotteries can be compared
Rabin critique of concave utility: If an EU maximiser rejects a 50/50 between $100 loss and $_ gain then they must reject 50/50 between $_ loss and $_ gain
Pioneers subjective choice theory
Demonstrated screening: where the uninformed takes action to improve what they know
__ axiom of EUT: If A>B>C then A>C
With risk, we can __ probabilities, with uncertainty we are __
Test of industry boundaries - if a small but significant price increase would be profitable then substitutes are not a barrier to monopolism
Found consumer choices (in experiments) that systematically undermined EUT
Shallow loss function? Use a _
When a group of people agree to share in the outcomes of multiple risky projects
Rothschild-Stiglitz separating equilibrium does not exist if proportion of __ risk types is too high
In an infinite game, a mixed Bertrand strategy can even produce higher profits than Cournot
Decisions around uncertainty are influenced by framing
What makes people happy is relative prosperity - undermines EUT
When the outcomes of a risky project are shared amongst people
e.g. congestion, agglomeration
Developed the expected utility model
__ absolute risk aversion reflects the fact that gambles over say $100 should become more appealing as we get richer
Deal or no Deal shows consumers have path dependent risk attitudes
Method of finding out marginal benefits of public gods
A higher number of firms in a market __ the chance of collusion
__ axiom of EUT: If A>B>C then there must be some weighted average of A and C that is equally preferable to B
Showed that it is unrealistic to expect the same utility function to be appropriate for all levels of wealth
The same lottery might be preferred if the results can be known now rather than later to reduce __

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