Mechanism Design: An Introduction
Shurojit Chatterji
Efficient social decisions
Have to be implemented by an authority (planner); assume that this
person is benevolent
Axioms
Preferences are primitive and private
Players play strategically (they know
ERIC MASKIN
Enormous increase in globalisation (20 years)
- more trade of goods/services
- more production of goods/services across national boundaries
caused by:
- decline in transport costs
- decline in communication costs
- removal of trade barriers (e
Strictly Dominated Strategy
A strategy si Si is strictly dominated for player i if there is a
si Si such that for all s-i S-i (this means the other player)
ui (si, s-i) > ui (si, s-i)
This means that the strategy is strictly dominated
but if:
ui (si, s-i
III.
Existence of a Monopoly
There is no incentive/inducement for a monopolist to give up its monopoly
position/power
Information Asymmetries (IA)
Information is not disseminated properly
Some markets are better informed beside others
2 Types of IA
- P
Static Games of Complete Information
Games in Normal Form (Strategic Form)
-> Each player takes an action without knowing the action of the other players
-> Players move independently and without communication
Sequential Games
A player goes first before
Dr. Aldredo Paloyo
Introduction to Impact Evaluation of Development Programmes
OLS will be the most advanced model in this class
4 Conditions
> Continuous
> No perfect multicollinearity
> Independent Errors
> Exogeniety ofX E(ui | x1) = E(ui) = 0
If E( ha
II.
Perfect Competition (PC)
- Considered most efficient market
> allocative
> productive
> dynamic
> market
Short Run
- One input is fixed (ex. capacity & technology)
What is the condition? P = MC
(Price paid by consumer is equal to incremental
cost)
- T
I.
ECOIORG
Industrial Organisation
How firms organise themselves
- Organisational architecture
(Intrafirm)
- Firm vs firm(s)
(Interfirm)
4 KINDS OF ECONOMIC EFFICIENCY
any economic subject maximises or improves efficiency
(i) Allocative
- Best allocation
Mechanism Design
Canillas, Jose Raphael C.
Last Friday, a talk by Shurojit Chatterji was held at Yuchengco building giving
insights on the workings of mechanism design. Mechanism design in perspective may
be the initial phase before creating an impact eva
Lecture Notes IV Arbitrage Pricing Theory
19
IV. Arbitrage Pricing Theory
An alternative model of equilibrium security pricing developed by Ross
(1976, Journal of Economic Theory Vol. 13: 341-360).
APT describes the expected return on an asset (or portfol
VI. Stock Valuation Models
A. Discounted Cashflow Models (DCFM)
1. The General Model
Investors generally expect to get two types of cashflows when they buy a share
of stock: dividends during the period they hold the stock and expected price at
the end of
Arbitrage Pricing Theory
An alternative model of equilibrium security pricing (Ross, S., 1976,
Journal of Economic Theory Vol. 13: 341-360).
Hypothesis: When the assets market is in equilibrium, expected return
on an asset (or portfolio) is a linear funct
III. MULTIFACTOR MODELS AND EXPECTED RETURNS
The Single Index Model or Single Factor Model or Market Model (and
the underlying theoretical CAPM model) assumes that all explainable
variation in asset returns is related to a single factor, the return on the
Constant'Growth'DDM'Example'
In the past, XYZs stock was selling for 65.00 per share. At that
time, the firms earnings were 3.99 per share and it paid a 2.00
dividend. At that time a major brokerage firm was estimating the
firms long-term growth rate at 1
The Multi Index (Factor) Model
A. Multi Factor Model
Consider the K-Factor Model
rit = i + i1 f1t + i 2 f 2t + + iK f Kt + it
where
t = 1, . . , T; i = 1, . . . , N
rit = return on asset i at time t
i = expected return on asset i
i1 , , iK = factor sens
Three-Stage Model Example
Current year, t = 1994
et
Dt
1.33
0.16
High-growth period
Length
E Ga
(1 b) = Dt
et
r f (risk-free rate)
E rM r f
(market risk premium)
Transition period
Length
annual decline in E[growth] = (0.36 0.060 / 5
annual increase in
(1
APT Example
Question: The actual (realized) returns on two portfolios are believed to
follow a two-factor model:
r1 = a1 + 2 f1 + f 2 + 1
r2 = a2 + 3 f1 + 4 f 2 + 2
In addition, there is a risk-free asset with a rate of return of 10%. It is
known that 1 =
1-2. Short Questions and Multiple Choices
1. Given an actual demand of 60 for a period when
forecast of 70 was anticipated, and an alpha of 0.3, what
would the forecast for the next period be using simple
exponential smoothing?
F = (1-0.3)(70)+0.3(60) = 6
Sejong University
Sejong Syracuse Global MBA Program
Fall 2014
Supply Chain Management
Course Syllabus
Introduction
This course provides a working introduction to a field you have not perhaps studied before, at least
directly. In the 4 Ps you met in Basic
Linear Equations
Applications
WORD PROBLEMS
Number Problems
1. Find three consecutive odd integers so that the sum of the three
integers is 5 less than 4 times the first.
2. Find two consecutive even integers so that 18 times the smaller
number is 2 mor
A Culinary Innovation: 3D Food Printing
by
Block 3 of SOE ID 113
Research and analysis on the possibility of 3D Food Printers as a primary producer of food
for distribution to the famished populace
Abstract
The study examined the different scenarios, pote