CharleyBates - Atlas of Economic Models

Charley Bates

To Do List

  • 2008-07-17
    • Bibtex convention lower case, all pulls off main Biblio page (or will when working) so put repec stuff on Bibliography then can cite on model page
  • 2008-07-29
    • dollar \[ \] dollar to see another line - see RufusPollock

    • Plan for next week: finish Romer, then Tirole stuff then move on to GE - DONE

    • Update homepage - DONE

  • 2008-08-11
    • 'Getting started' page and make Help pages more user-friendly - DONE

    • See RupertGatti for 'minutes' of meeting

  • 2008-08-18
    • Refactor GettingStarted page - DONE now How To Contribute

    • User stories - follow through - walk through stories, follow their steps - DONE

    • Brief written summary on macro/micro page - intro then list of pages tagged with category - DONE

    • Update AtlasModelTemplate - DONE

    • Add RP todos to Todo list - DONE

    • Models page update
      • Exemplar models - link to other models - DONE

      • Related models, even if not then stubs (?) - DONE

    • Emails:
      • Advisory board - blurb about project (see about page for inspiration), template email: Dear X etc
      • Recruiting undergrads/grads - what say to them: brief bit then lots of blurb at the bottom
    • Toolbars:
      • Improvements/suggestions - DONE on TodoList page

      • Change when logged-in from not logged-in?
    • More models - stubs (intro and reference to article) - DONE Models Wanted page

    • Todos in category section?
    • Anything don't do onto Todo list then mark as DONE just so have record

Editing Existing Models

  • Long term: go around existing pages putting into more standardized layout
    • at least standard metadata at top maybe refactor sections
  • Monopolist_Screening_Model

    • Have General Model section at top + remarks (general version)
      • Spence-Mirrlees condition
      • Honest mechanism result - need a separate Mechanism Design page
    • Then linear case as an example
      • Diagrams
    • Extensions different from Applications
  • Market_For_Lemons

    • Add worker/wages models as application - Mas-Collel ch13
  • Moral_Hazard_In_Teams

    • Change 'slack off', plus risk aversion?
    • App&ext - mechanism design, realistic implementation, info requirements, robustness

  • Create Free Riding page - marginal cost ne marginal benefit since other people's effort affects benefit.
  • Co-ordination models - e.g. R&D models of techno (Romer), interdependent payoffs.

Already discussed

  • Category - links to right place - HOW???
    • Ans: just do Category... then create Category... page and it will list all pages tagged with that category
  • Consistency with use of algebra? - all in LaTeX, when in normal font in italics...
  • Use of diagrams?
    • use attachments and then

    • also can use python + matplotlib to generate diagrams programmatically -- see Python_Getting_Started

  • Use of bold/italics for emphasis?
    • up to you
  • More explicit help with inputting maths/link to external LaTeX site for symbols
  • Definitions page? Put important ones at the top of each article or spread through?
  • Make LaTeX font bigger? At present difficult to read esp if subscripts etc, when zoom in with IE maths written combined with normal text (i.e. in paragraph rather than as bullet points) not formatted correctly, even if can read OK doesn't display 'LaTeX' as it should be.

  • Have to add to Biblio page each time or macro that does it automatically?
    • Ans: Yes - add to Biblio page first then should cite automatically on model page (not working currently but will be!)
  • When using 'new page' type box on HelpOnPageCreation comes out with HelpTemplate page rather than Model template - DONE

Potential Models

Asymmetric Information Models

Adverse Selection Models

  1. Screening Models - Mechanism Design
    • Monopolist Screening Model
      • Optimal contract design under asymmetric information (second best), get firm to reveal cost type, must satisfy incentive feasibility (participation/incentive compatibility constraints), informational rent, single crossing property (Spence-Mirrlees Condition)
        • Application: Government Procurement Model
        • Application: Optimal Tax (Mirrlees)
          • Get worker to reveal high/low type by offering varying MTRs
        • Application: Screening by a Monopoly Insurance Firm - Stiglitz
          • Probability of accident private information, offer a menu of contracts and incentivise customers to pick the right one
      • Rothschild-Stiglitz Competitive Insurance Model
        • Equilibrium s.t. each contract makes non-negative profit, no contract if added would make strictly positive profit
  2. Adverse Selection: The Market for Lemons - Akerloff Priority

    • Actual quality of good unobservable to buyer, only knows distribution, market failure since sellers of low quality goods have no incentive to reveal type
    • Application: health insurance (cream-skinning)
  3. Signalling Models Priority

    • Spence Model of Education
      • Workers use costly signal of education to show if high or low productivity, employers form belief about workers' MP from signal and pay accordingly - Perfect Bayesian Equilibrium
    • Crawford-Sobel Model
      • Costless signaling, different types have different preferences for outcome (cf Spence model where all want high wages)
  4. Dynamic Adverse Selection Models
    • 2-period models
      • Reveal type after first period, but then possibility to renegotiate contracts
    • Example: Optimal Exam Problem
      • A commits to costly action in period 1, but threat of defection by P from promised compensation limits initial action

Moral Hazard Models

  1. Principal_Agent_Model extensions: Priority

    • Informativeness Principle
      • Include in optimal wage contract any factor which reduces the error with which A's choices are estimated
      • P's payoff decreasing in variance
    • Equal Compensation Principle
      • With multiple desirable tasks the marginal returns to each must be equal or one will receive no attention
  2. Moral Hazard in Teams - Holmstrom Priority

    • n agents, no principal, equilibrium output < social optimum due to free riding

  3. Dynamic contracts
    • Holmstrom Career Concerns
      • No incentive contract (wage = expected not actual output) but positive effort in period 1 to increase wages in period 2
    • Rosen Tournament Theory
      • Explains seniority wages through increasing salary gaps between rounds of the promotion 'tournament'

Other areas to think about

General Equilibrium and International Trade Models

  1. Robinson Crusoe Model (better in consumer/producer theory?)
    • One individual both produces and consumes, social optimum vs competitive equilibrium
  2. Excess Demand and Walras' Law (better in consumer theory?)
  3. Hecksher-Ohlin Model of Trade
    • Countries export goods whose production intensively uses factors which are abundant in that country
    • Stolper-Samuelson Effect
      • If the price of a good rises, the price of the factor used intensively in the production of that good also rises
    • Rybczinski Effect
      • If the endowment of a factor increases, the output of the good intensively using that factor also increases

Growth Models

  1. Solow Model
    • Convergence to steady state growth, exogenous techo progress, diminishing returns to K
  2. Human Capital Models
    • MRW Model
      • H as input in CD techno
    • Lucas Model
      • investment in H increases effective labour input
  3. Endogenous Growth Models
    • AK Model
      • Non-diminishing returns to K, constant growth rate
    • Romer's R&D Model

      • Ideas $$ \to $$ non-rivalry $$ \to $$ increasing returns $$ \to $$ imperfect competition

Business Cycle Models

  1. Neo-Keynesian Models
    • Imperfect Competition Model
      • Market imperfections central to economic fluctuations, nominal and real rigidities, multiplier effects microfounded
    • Nominal Rigidities Model
      • Imperfect competition + menu costs = money non-neutrality
  2. Lucas' Imperfect Information Model
    • Rational expectations, money shocks affect prices and output
  3. Real Business Cycle Model
    • Fluctuations in output caused by techno shocks, maximising households and firms, intertemporal context to fully-specified general equilibrium model
  4. Stochastic Dynamic General Equilibrium Model
    • Add imperfections (Keynesian, affect AD) to RBC models to get more satisfactory overall theory

Tax models

  1. Diamond-Mirrlees

Bargaining Models

  1. The Core
  2. Shapley Value
  3. Nash Bargaining
    • Complexity (Suborean 2005)

Practice Maths

$$ x^{n} + y^{n} = z^{n} $$

$$ \frac{1}{2} $$

$$ \int_{a}^{b} x_{i} $$

$$ \[f(n) = \left\{ begin{array}{ll} x, & y=0 \\ z, & y>0 \\ \end{array} \] $$

$$ \[ \left\{\begin{eqnarray*}{l l} y &=& f(k,l) \\

  • &=& fsasd \\ &=& f(al,kl).

\end{eqnarray*}\right. \] $$