A critique of the Ellsberg Paradox

Jessica YungEconomicsLeave a Comment

Ellsberg Paradox We discussed the following version of the Ellsberg paradox in a microeconomics lecture yesterday: There is an urn with 100 red balls and 200 balls that are each either blue or green. (e.g. may have 100 red and 200 blue or 100 red, 199 green and 1 blue.) You have two choices. Choice 1: (a) ┬áReceive 1,000 if … Read More

What does the Lagrange Multiplier mean?

Jessica YungEconomicsLeave a Comment

Note: The crux of this post really is in talking about the Lagrange Multiplier, so scroll down to ‘The Lagrange’ for that. What is a constrained optimisation problem? Suppose we want to maximise our own utility (our enjoyment) but have a limited amount of resources (time and money, say) we can use to do that. Or say I want to … Read More

What is a Game Theoretic Best Choice? Part I

Jessica YungEconomics, UncategorizedLeave a Comment

The aim of this series is to come up with some formalisation of what a game theoretic best choice is without reference to established results before the material is covered in lectures. I will then compare my formalisation to established┬áresults. Notation In Dr. Elliott’s lectures we defined a Nash Equilibrium to be when for all and for all . stands … Read More

Social decision rules and Condorcet’s Jury Theorem

Jessica YungEconomicsLeave a Comment

Thoughts from Microeconomics Lecture 1, Cambridge Economics Part IIA (Michaelmas) Social decision rules Dr. Elliott introduced four social decision rules in this lecture. Social decision rules are rules by which a society collectively makes decisions, e.g. whether or not they should exit a union. The four decision rules introduced were Majority Rule (get >50% of the vote to win), Super … Read More