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Full-Text Articles in Economics
Hyperbolic Memory Discounting And The Political Business Cycle, T. Scott Findley
Hyperbolic Memory Discounting And The Political Business Cycle, T. Scott Findley
Economics and Finance Faculty Publications
The vintage political business cycle framework of Nordhaus (1975) represents the idea that the macroeconomic business cycle is manipulated opportunistically by an incumbent government to achieve re-election. A key assumption in this prototypical framework is that voters discount their memories about unemployment and inflation at a constant rate. Yet starting with Ebbinghaus (1885) and Jost (1897), a large body of research in psychology documents an empirical regularity that has come to be known as Jost's Second Law of Forgetting-individuals discount recent memories at a higher rate compared to the rate at which they discount older memories. I find that incorporating …
Numerical Simulations Of Competition In Quantities, Devon Haskell Gorry, John Gilbert
Numerical Simulations Of Competition In Quantities, Devon Haskell Gorry, John Gilbert
Economics and Finance Faculty Publications
We present a series of numerical simulation models built in Excel that can be used to explore the properties of various models of strategic competition in quantities and their economic implications. The resources incorporate both tabular and graphical data presentation formats and are built in such a way that they provide instant or ‘live’ feedback on the consequences of changes in the economic system. We discuss the theory behind the models, how they can be implemented as numerical simulations in Excel, and ways in which the simulations can be used to enhance student understanding of the material.
A Framework For Non-Drastic Innovation With Product Differentiation, Jeremy Jay Jackson, Jason Smith
A Framework For Non-Drastic Innovation With Product Differentiation, Jeremy Jay Jackson, Jason Smith
Economics and Finance Faculty Publications
We model non-drastic technological innovation in a duopoly model with differentiated products. We derive profit functions for both firms which depend on only one variable, the technological gap. As our model derives product demands directly from agent utility we are able to fully describe the welfare effects of innovation. We show that the welfare improvements from innovation come not only as firms accrue higher profits, by charging consumers higher prices, but also as consumers enjoy higher quality products.