1.
Economics
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Economics is a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services according to the Merriam-Webster Dictionary. Economics focuses on the behaviour and interactions of economic agents and how economies work, consistent with this focus, textbooks often distinguish between microeconomics and macroeconomics. Microeconomics examines the behaviour of elements in the economy, including individual agents and markets, their interactions. Individual agents may include, for example, households, firms, buyers, macroeconomics analyzes the entire economy and issues affecting it, including unemployment of resources, inflation, economic growth, and the public policies that address these issues. Economic analysis can be applied throughout society, as in business, finance, health care, Economic analyses may also be applied to such diverse subjects as crime, education, the family, law, politics, religion, social institutions, war, science, and the environment. At the turn of the 21st century, the domain of economics in the social sciences has been described as economic imperialism. The ultimate goal of economics is to improve the conditions of people in their everyday life. There are a variety of definitions of economics. Some of the differences may reflect evolving views of the subject or different views among economists, to supply the state or commonwealth with a revenue for the publick services. Say, distinguishing the subject from its uses, defines it as the science of production, distribution. On the satirical side, Thomas Carlyle coined the dismal science as an epithet for classical economics, in this context and it enquires how he gets his income and how he uses it. Thus, it is on the one side, the study of wealth and on the other and more important side, a part of the study of man. He affirmed that previous economists have usually centred their studies on the analysis of wealth, how wealth is created, distributed, and consumed, but he said that economics can be used to study other things, such as war, that are outside its usual focus. This is because war has as the goal winning it, generates both cost and benefits, and, resources are used to attain the goal. If the war is not winnable or if the costs outweigh the benefits. Some subsequent comments criticized the definition as overly broad in failing to limit its subject matter to analysis of markets, there are other criticisms as well, such as in scarcity not accounting for the macroeconomics of high unemployment. The same source reviews a range of included in principles of economics textbooks. Among economists more generally, it argues that a particular definition presented may reflect the direction toward which the author believes economics is evolving, microeconomics examines how entities, forming a market structure, interact within a market to create a market system
2.
Game theory
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Game theory is the study of mathematical models of conflict and cooperation between intelligent rational decision-makers. Game theory is used in economics, political science, and psychology, as well as logic, computer science. Originally, it addressed zero-sum games, in one persons gains result in losses for the other participants. Today, game theory applies to a range of behavioral relations, and is now an umbrella term for the science of logical decision making in humans, animals. Modern game theory began with the idea regarding the existence of equilibria in two-person zero-sum games. Von Neumanns original proof used Brouwer fixed-point theorem on continuous mappings into compact convex sets and his paper was followed by the 1944 book Theory of Games and Economic Behavior, co-written with Oskar Morgenstern, which considered cooperative games of several players. The second edition of this provided an axiomatic theory of expected utility. This theory was developed extensively in the 1950s by many scholars, Game theory was later explicitly applied to biology in the 1970s, although similar developments go back at least as far as the 1930s. Game theory has been recognized as an important tool in many fields. With the Nobel Memorial Prize in Economic Sciences going to game theorist Jean Tirole in 2014, John Maynard Smith was awarded the Crafoord Prize for his application of game theory to biology. Early discussions of examples of two-person games occurred long before the rise of modern, the first known discussion of game theory occurred in a letter written by Charles Waldegrave, an active Jacobite, and uncle to James Waldegrave, a British diplomat, in 1713. In this letter, Waldegrave provides a mixed strategy solution to a two-person version of the card game le Her. James Madison made what we now recognize as an analysis of the ways states can be expected to behave under different systems of taxation. In 1913 Ernst Zermelo published Über eine Anwendung der Mengenlehre auf die Theorie des Schachspiels and it proved that the optimal chess strategy is strictly determined. This paved the way for more general theorems, the Danish mathematician Zeuthen proved that the mathematical model had a winning strategy by using Brouwers fixed point theorem. In his 1938 book Applications aux Jeux de Hasard and earlier notes, Borel conjectured that non-existence of mixed-strategy equilibria in two-person zero-sum games would occur, a conjecture that was proved false. Game theory did not really exist as a field until John von Neumann published a paper in 1928. Von Neumanns original proof used Brouwers fixed-point theorem on continuous mappings into compact convex sets and his paper was followed by his 1944 book Theory of Games and Economic Behavior co-authored with Oskar Morgenstern
3.
Engineering
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The term Engineering is derived from the Latin ingenium, meaning cleverness and ingeniare, meaning to contrive, devise. Engineering has existed since ancient times as humans devised fundamental inventions such as the wedge, lever, wheel, each of these inventions is essentially consistent with the modern definition of engineering. The term engineering is derived from the engineer, which itself dates back to 1390 when an engineer originally referred to a constructor of military engines. In this context, now obsolete, a referred to a military machine. Notable examples of the obsolete usage which have survived to the present day are military engineering corps, the word engine itself is of even older origin, ultimately deriving from the Latin ingenium, meaning innate quality, especially mental power, hence a clever invention. The earliest civil engineer known by name is Imhotep, as one of the officials of the Pharaoh, Djosèr, he probably designed and supervised the construction of the Pyramid of Djoser at Saqqara in Egypt around 2630–2611 BC. Ancient Greece developed machines in both civilian and military domains, the Antikythera mechanism, the first known mechanical computer, and the mechanical inventions of Archimedes are examples of early mechanical engineering. In the Middle Ages, the trebuchet was developed, the first steam engine was built in 1698 by Thomas Savery. The development of this gave rise to the Industrial Revolution in the coming decades. With the rise of engineering as a profession in the 18th century, similarly, in addition to military and civil engineering, the fields then known as the mechanic arts became incorporated into engineering. The inventions of Thomas Newcomen and the Scottish engineer James Watt gave rise to mechanical engineering. The development of specialized machines and machine tools during the revolution led to the rapid growth of mechanical engineering both in its birthplace Britain and abroad. John Smeaton was the first self-proclaimed civil engineer and is regarded as the father of civil engineering. He was an English civil engineer responsible for the design of bridges, canals, harbours and he was also a capable mechanical engineer and an eminent physicist. Smeaton designed the third Eddystone Lighthouse where he pioneered the use of hydraulic lime and his lighthouse remained in use until 1877 and was dismantled and partially rebuilt at Plymouth Hoe where it is known as Smeatons Tower. The United States census of 1850 listed the occupation of engineer for the first time with a count of 2,000, there were fewer than 50 engineering graduates in the U. S. before 1865. In 1870 there were a dozen U. S. mechanical engineering graduates, in 1890 there were 6,000 engineers in civil, mining, mechanical and electrical. There was no chair of applied mechanism and applied mechanics established at Cambridge until 1875, the theoretical work of James Maxwell and Heinrich Hertz in the late 19th century gave rise to the field of electronics
4.
Rational choice theory
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Rational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. The basic premise of rational choice theory is that social behavior results from the behavior of individual actors. The theory also focuses on the determinants of the individual choices, Rational choice theory then assumes that an individual has preferences among the available choice alternatives that allow them to state which option they prefer. These preferences are assumed to be complete and transitive, Rationality is widely used as an assumption of the behavior of individuals in microeconomic models and analyses and appears in almost all economics textbook treatments of human decision-making. It is also used in science, sociology, and philosophy. A particular version of rationality is instrumental rationality, which involves seeking the most cost-effective means to achieve a goal without reflecting on the worthiness of that goal. Gary Becker was a proponent of applying rational actor models more widely. Becker won the 1992 Nobel Memorial Prize in Economic Sciences for his studies of discrimination, crime, the concept of rationality used in rational choice theory is different from the colloquial and most philosophical use of the word. Colloquially, rational behaviour typically means sensible, predictable, or in a thoughtful, Rational choice theory uses a narrower definition of rationality. At its most basic level, behavior is if it is goal-oriented, reflective. This contrasts with behavior that is random, impulsive, conditioned, early neoclassical economists writing about rational choice, including William Stanley Jevons, assumed that agents make consumption choices so as to maximize their happiness, or utility. Contemporary theory bases rational choice on a set of axioms that need to be satisfied. It mandates just a consistent ranking of the alternatives, individuals choose the best action according to their personal preferences and the constraints facing them. Rational choice theorists do not claim that the theory describes the choice process, an assumption often added to the rational choice paradigm is that individual preferences are self-interested, in which case the individual can be referred to as a homo economicus. Such an individual acts as if balancing costs against benefits to arrive at action that maximizes personal advantage, in this view, the only way to judge the success of a hypothesis is empirical tests. To use an example from Milton Friedman, if a theory says that the behavior of the leaves of a tree is explained by their rationality passes the empirical test. Without specifying the individuals goal or preferences it may not be possible to empirically test, or falsify, however, the predictions made by a specific version of the theory are testable. In recent years, the most prevalent version of rational choice theory, economists are learning from other fields, such as psychology, and are enriching their theories of choice in order to get a more accurate view of human decision-making
5.
Solution concept
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In game theory, a solution concept is a formal rule for predicting how a game will be played. These predictions are called solutions, and describe which strategies will be adopted by players and, therefore, the most commonly used solution concepts are equilibrium concepts, most famously Nash equilibrium. Many solution concepts, for games, will result in more than one solution. This puts any one of the solutions in doubt, so a game theorist may apply a refinement to narrow down the solutions, each successive solution concept presented in the following improves on its predecessor by eliminating implausible equilibria in richer games. Let Γ be the class of all games and, for each game G ∈ Γ, let S G be the set of strategy profiles of G. A solution concept is an element of the direct product Π G ∈ Γ2 S G, i. e. a function F, Γ → ⋃ G ∈ Γ2 S G such that F ⊆ S G for all G ∈ Γ. In this solution concept, players are assumed to be rational, a strategy is strictly dominated when there is some other strategy available to the player that always has a higher payoff, regardless of the strategies that the other players choose. For example, in the dilemma, cooperate is strictly dominated by defect for both players because either player is always better off playing defect, regardless of what his opponent does. A Nash equilibrium is a profile in which every strategy is a best response to every other strategy played. There are games that have multiple Nash equilibria, some of which are unrealistic, in the case of dynamic games, unrealistic Nash equilibria might be eliminated by applying backward induction, which assumes that future play will be rational. It therefore eliminates noncredible threats because such threats would be irrational to carry out if a player was called upon to do so. For example, consider a game in which the players are an incumbent firm in an industry. As it stands, the incumbent has a monopoly over the industry, if the entrant chooses not to enter, the payoff to the incumbent is high and the entrant neither loses nor gains. If the entrant enters, the incumbent can fight or accommodate the entrant and it will fight by lowering its price, running the entrant out of business and damaging its own profits. If it accommodates the entrant it will some of its sales. If the entrant enters, the best response of the incumbent is to accommodate, if the incumbent accommodates, the best response of the entrant is to enter. Hence the strategy profile in which the incumbent accommodates if the entrant enters, however, if the incumbent is going to play fight, the best response of the entrant is to not enter. If the entrant does not enter, it does not matter what the incumbent chooses to do, hence fight can be considered as a best response of the incumbent if the entrant does not enter
6.
Leonid Hurwicz
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Leonid Leo Hurwicz was a Polish economist and mathematician active in the United States. He originated incentive compatibility and mechanism design, which show how desired outcomes are achieved in economics, social science, interactions of individuals and institutions, markets and trade are analyzed and understood today using the models Hurwicz developed. To date, Leonid Hurwicz is the oldest Nobel Laureate, having received the prize at the age of 90, Hurwicz was Regents Professor of Economics at the University of Minnesota. He was among the first economists to recognize the value of theory and was a pioneer in its application. Hurwicz shared the 2007 Nobel Memorial Prize in Economic Sciences with Eric Maskin, Hurwicz was born in Moscow, Russia, to a family of Polish Jews a few months before the October Revolution. Soon after Leonids birth, the returned to Warsaw. Hurwicz and his family experienced persecution by both the Bolsheviks and Nazis, as he became a refugee when Hitler invaded Poland in 1939. His parents and brother fled Warsaw, only to be arrested and his family eventually joined him there. Hurwicz hired Evelyn Jensen, who grew up on a Wisconsin farm and was, at the time and they married on July 19,1944 and later lived at a number of locations in Minneapolis, Minnesota, the last being on Edmund Boulevard near W. River Parkway S. They had four children, Sarah, Michael, Ruth and Maxim and his interests included linguistics, archaeology, biochemistry and music. His activities outside the field of economics included research in meteorology and he helped design the walking subcaucus method of allocating delegates among competing groups, which is still used today by political parties. He remained an active Democrat, even attending Precinct Caucus in February 2008 and he was hospitalized in mid-June 2008, suffering from renal failure. He died a week later in Minneapolis, encouraged by his father to study law, in 1938 Hurwicz received his LL. M. degree from the University of Warsaw, where he discovered his future vocation in economics class. He then studied at the London School of Economics with Nicholas Kaldor, in 1939 he moved to Geneva where he studied at the Graduate Institute of International Studies and attended the seminar of Ludwig von Mises. After moving to the United States he continued his studies at Harvard University, Hurwicz had no degree in economics. In 2007 he said, Whatever economics I learned I learned by listening and learning, in 1941 Hurwicz was a research assistant to Paul Samuelson at the Massachusetts Institute of Technology and to Oskar Lange at the University of Chicago. At Illinois Institute of Technology during the war, Hurwicz taught electronics to the U. S. Army Signal Corps. From 1942 to 1944, at the University of Chicago, he was a member of the faculty of the Institute of Meteorology and taught statistics in the Department of Economics
7.
Nobel Memorial Prize in Economic Sciences
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The prize was established in 1968 by a donation from Swedens central bank, the Swedish National Bank, on the banks 300th anniversary. Although it is not one of the prizes that Alfred Nobel established in his will in 1895, laureates are announced with the other Nobel Prize laureates, and receive the award at the same ceremony. Laureates in the Memorial Prize in Economics are selected by the Royal Swedish Academy of Sciences and it was first awarded in 1969 to the Dutch and Norwegian economists Jan Tinbergen and Ragnar Frisch, for having developed and applied dynamic models for the analysis of economic processes. An endowment in perpetuity from Sveriges Riksbank pays the Nobel Foundations administrative expenses associated with the prize, since 2012, the monetary portion of the Prize in Economics has totalled 8 million Swedish kronor. This is equivalent to the amount given for the original Nobel Prizes, the Prize in Economics is not one of the original Nobel Prizes created by Alfred Nobels will. However, the process, selection criteria, and awards presentation of the Prize in Economic Sciences are performed in a manner similar to that of the Nobel Prizes. Laureates are announced with the Nobel Prize laureates, and receive the award at the same ceremony, shall have conferred the greatest benefit on mankind. According to its website, the Royal Swedish Academy of Sciences administers a researcher exchange with academies in other countries and publishes six scientific journals. Members of the Academy and former laureates are also authorised to nominate candidates, all proposals and their supporting evidence must be received before February 1. The proposals are reviewed by the Prize Committee and specially appointed experts, before the end of September, the committee chooses potential laureates. If there is a tie, the chairman of the committee casts the deciding vote, next, the potential laureates must be approved by the Royal Swedish Academy of Sciences. Members of the Ninth Class of the Academy vote in mid-October to determine the next laureate or laureates of the Prize in Economics. The first prize in economics was awarded in 1969 to Ragnar Frisch, in 2009, Elinor Ostrom became the first woman awarded the prize. This makes it available to researchers in such topics as political science, psychology, moreover, the composition of the Economics Prize Committee changed to include two non-economists. This has not been confirmed by the Economics Prize Committee, the members of the 2007 Economics Prize Committee are still dominated by economists, as the secretary and four of the five members are professors of economics. Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, among them is the Swedish human rights lawyer Peter Nobel, a great-grandson of Ludvig Nobel. Nobel criticizes the institution of misusing his familys name. He explaiend that Nobel despised people who cared more about profits than societys well-being and this does not matter in the natural sciences
8.
Eric Maskin
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Eric Stark Maskin is an American economist and 2007 Nobel laureate recognized with Leonid Hurwicz and Roger Myerson for having laid the foundations of mechanism design theory. He is the Adams University Professor at Harvard University, until 2011, he was the Albert O. Hirschman Professor of Social Science at the Institute for Advanced Study, and a visiting lecturer with the rank of professor at Princeton University. Maskin was born in New York City on December 12,1950, into a Jewish family and he graduated from Tenafly High School in Tenafly, New Jersey, in 1968, and attended Harvard University, where he earned A. B. He continued to earn a Ph. D. in applied mathematics at the same institution, in 1976, after earning his doctorate, Maskin became a research fellow at Jesus College, Cambridge University. In the following year, he joined the faculty at Massachusetts Institute of Technology, in 1985 he returned to Harvard as the Louis Berkman Professor of Economics, where he remained until 2000. That year, he moved to the Institute for Advanced Study in Princeton, in 2011, Maskin has returned to Harvard again. Maskin has worked in areas of economic theory, such as game theory, the economics of incentives. He is particularly known for his papers on mechanism design/implementation theory. His current research projects include comparing different electoral rules, examining the causes of inequality and he is a Fellow of the American Academy of Arts and Sciences, Econometric Society, and the European Economic Association, and a Corresponding Fellow of the British Academy. He was president of the Econometric Society in 2003, Maskin suggested that software patents inhibit innovation rather than stimulate progress. Software, semiconductor, and computer industries have been innovative despite historically weak patent protection, innovation in those industries has been sequential and complementary, so competition can increase firms future profits. In such an industry, patent protection may reduce overall innovation. A natural experiment occurred in the 1980s when patent protection was extended to software, standard arguments would predict that R&D intensity and productivity should have increased among patenting firms. Consistent with our model, however, these increases did not occur, other evidence supporting this model includes a distinctive pattern of cross-licensing and a positive relationship between rates of innovation and firm entry. List of economists Mechanism design Maskin Nobel Prize lecture Profile in The Daily Princetonian Tabarrok, explaining the research that won the 2007 Nobel Prize in Economics. Videos of Eric Maskin speaking in plain English Maskin, Eric Stark, Prize Lecture by Eric S. Maskin. Eric S. Maskin delivered his Prize Lecture on 8 December 2007 at Aula Magna and he was introduced by Professor Jörgen Weibull, Chairman of the Economics Prize Committee. Copyright © Nobel Web AB2007 Maskin, Eric Stark, Eric Maskin - An Introduction to Mechanism Design - Warwick Economics Summit 2014
9.
Roger Myerson
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A professor at the University of Chicago, he has made contributions as an economist and as a political scientist. Roger Myerson was born on March 29,1951, in Boston and he attended Harvard University, where he received his A. B. summa cum laude, and S. M. in applied mathematics in 1973. He completed his Ph. D. in applied mathematics from Harvard University in 1976 and his doctorate thesis was A Theory of Cooperative Games. From 1976 to 2001, Myerson was a professor of economics at Northwestern Universitys Kellogg School of Management, from 1978 to 1979, he was Visiting Researcher at Bielefeld University. He was Visiting Professor of Economics at the University of Chicago from 1985–86 and he became Professor of Economics at Chicago in 2001. Currently, he is the Glen A. Lloyd Distinguished Service Professor of Economics at the University of Chicago and he was awarded the prize for his contributions to mechanism design theory. Mechanism design theory allows for people to distinguish situations in which work well from those in which they do not. The theory has helped economists identify efficient trading mechanisms, regulation schemes, today, the theory plays a central role in many areas of economics and parts of political science. In 1980, Myerson married Regina and the couple had two children, Daniel and Rebecca, Game theory and mechanism design Graphs and Cooperation in Games. Two-Person Bargaining Problems and Comparable Utility, refinements of the Nash Equilibrium Concept. Incentive Compatibility and the Bargaining Problem, mechanism Design by an Informed Principal. Two-Person Bargaining Problems with Incomplete Information, bayesian Equilibrium and Incentive Compatibility, in Social Goals and Social Organization, edited by L. Hurwicz, D. Schmeidler, and Hugo Sonnenschein, Cambridge University Press, 229–259. He wrote a textbook on game theory in 1991, and has also written on the history of game theory, including his review of the origins. He also served on the board of the International Journal of Game Theory for ten years. Myerson has worked on analysis of political institutions and written several major survey papers, Analysis of Democratic Institutions, Structure, Conduct. Economic Analysis of Political Institutions, An Introduction, Advances in Economic Theory and Econometrics, Theory and Applications, volume 1, edited by D. Kreps and K. Wallis and his recent work on democratization has raised critical questions about American policy in occupied Iraq. Books Game Theory, Analysis of Conflict, Harvard University Press,1991, probability Models for Economic Decisions, Duxbury Press,2005. S. At the Pritzker Military Museum & Library on April 2,2009
10.
Bayesian game
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In game theory, a Bayesian game is a game in which the players do not have complete information on the other players, but, they have beliefs with known probability distribution. A Bayesian game can be converted into a game of complete, harsanyi describes a Bayesian game in the following way. In addition to the players in the game, there is a special player called Nature. Nature assigns a random variable to each player which could take values of types for each player, harsanyis approach to modeling a Bayesian game in such a way allows games of incomplete information to become games of imperfect information. The type of a player determines that players payoff function, the probability associated with a type is the probability that the player, for whom the type is specified, is that type. In a Bayesian game, the incompleteness of information means that at least one player is unsure of the type of another player, such games are called Bayesian because of the probabilistic analysis inherent in the game. The lack of information held by players and modeling of beliefs mean that such games are used to analyse imperfect information scenarios. The normal form representation of a game with perfect information is a specification of the strategy spaces. A strategy for a player is a plan of action that covers every contingency of the game. The strategy space of a player is thus the set of all available to a player. A payoff function is a function from the set of profiles to the set of payoffs. In a Bayesian game, one has to specify strategy spaces, type spaces, payoff functions, a strategy for a player is a complete plan of action that covers every contingency that might arise for every type that player might be. A strategy must not only specify the actions of the given the type that he is. Strategy spaces are defined as above, a type space for a player is just the set of all possible types of that player. The beliefs of a player describe the uncertainty of that player about the types of the other players, each belief is the probability of the other players having particular types, given the type of the player with that belief. A payoff function is a 2-place function of strategy profiles and types, if a player has payoff function U and he has type t, the payoff he receives is U, where x ∗ is the strategy profile played in the game. Ω is the set of states of nature, for instance, in a card game, it can be any order of the cards. A i is the set of actions for player i, let A = A1 × A2 × ⋯ × A N
11.
Bayesian Nash equilibrium
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In game theory, a Bayesian game is a game in which the players do not have complete information on the other players, but, they have beliefs with known probability distribution. A Bayesian game can be converted into a game of complete, harsanyi describes a Bayesian game in the following way. In addition to the players in the game, there is a special player called Nature. Nature assigns a random variable to each player which could take values of types for each player, harsanyis approach to modeling a Bayesian game in such a way allows games of incomplete information to become games of imperfect information. The type of a player determines that players payoff function, the probability associated with a type is the probability that the player, for whom the type is specified, is that type. In a Bayesian game, the incompleteness of information means that at least one player is unsure of the type of another player, such games are called Bayesian because of the probabilistic analysis inherent in the game. The lack of information held by players and modeling of beliefs mean that such games are used to analyse imperfect information scenarios. The normal form representation of a game with perfect information is a specification of the strategy spaces. A strategy for a player is a plan of action that covers every contingency of the game. The strategy space of a player is thus the set of all available to a player. A payoff function is a function from the set of profiles to the set of payoffs. In a Bayesian game, one has to specify strategy spaces, type spaces, payoff functions, a strategy for a player is a complete plan of action that covers every contingency that might arise for every type that player might be. A strategy must not only specify the actions of the given the type that he is. Strategy spaces are defined as above, a type space for a player is just the set of all possible types of that player. The beliefs of a player describe the uncertainty of that player about the types of the other players, each belief is the probability of the other players having particular types, given the type of the player with that belief. A payoff function is a 2-place function of strategy profiles and types, if a player has payoff function U and he has type t, the payoff he receives is U, where x ∗ is the strategy profile played in the game. Ω is the set of states of nature, for instance, in a card game, it can be any order of the cards. A i is the set of actions for player i, let A = A1 × A2 × ⋯ × A N
12.
Individual rationality
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Rational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. The basic premise of rational choice theory is that social behavior results from the behavior of individual actors. The theory also focuses on the determinants of the individual choices, Rational choice theory then assumes that an individual has preferences among the available choice alternatives that allow them to state which option they prefer. These preferences are assumed to be complete and transitive, Rationality is widely used as an assumption of the behavior of individuals in microeconomic models and analyses and appears in almost all economics textbook treatments of human decision-making. It is also used in science, sociology, and philosophy. A particular version of rationality is instrumental rationality, which involves seeking the most cost-effective means to achieve a goal without reflecting on the worthiness of that goal. Gary Becker was a proponent of applying rational actor models more widely. Becker won the 1992 Nobel Memorial Prize in Economic Sciences for his studies of discrimination, crime, the concept of rationality used in rational choice theory is different from the colloquial and most philosophical use of the word. Colloquially, rational behaviour typically means sensible, predictable, or in a thoughtful, Rational choice theory uses a narrower definition of rationality. At its most basic level, behavior is if it is goal-oriented, reflective. This contrasts with behavior that is random, impulsive, conditioned, early neoclassical economists writing about rational choice, including William Stanley Jevons, assumed that agents make consumption choices so as to maximize their happiness, or utility. Contemporary theory bases rational choice on a set of axioms that need to be satisfied. It mandates just a consistent ranking of the alternatives, individuals choose the best action according to their personal preferences and the constraints facing them. Rational choice theorists do not claim that the theory describes the choice process, an assumption often added to the rational choice paradigm is that individual preferences are self-interested, in which case the individual can be referred to as a homo economicus. Such an individual acts as if balancing costs against benefits to arrive at action that maximizes personal advantage, in this view, the only way to judge the success of a hypothesis is empirical tests. To use an example from Milton Friedman, if a theory says that the behavior of the leaves of a tree is explained by their rationality passes the empirical test. Without specifying the individuals goal or preferences it may not be possible to empirically test, or falsify, however, the predictions made by a specific version of the theory are testable. In recent years, the most prevalent version of rational choice theory, economists are learning from other fields, such as psychology, and are enriching their theories of choice in order to get a more accurate view of human decision-making
13.
Mechanism design
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Because it starts at the end of the game, then goes backwards, it is also called reverse game theory. It has broad applications, from economics and politics to networked-systems, mechanism design studies solution concepts for a class of private-information games. Leonid Hurwicz explains that in a problem, the goal function is the main given. Therefore, the problem is the inverse of traditional economic theory. In an interesting class of Bayesian games, one player, called the principal, for example, the principal would like to know the true quality of a used car a salesman is pitching. He cannot learn anything simply by asking the salesman, because it is in his interest to distort the truth, fortunately, in mechanism design the principal does have one advantage, He may design a game whose rules can influence others to act the way he would like. Without mechanism design theory, the problem would be difficult to solve. He would have to all the possible games and choose the one that best influences other players tactics. In addition, the principal would have to draw conclusions from agents who may lie to him, thanks to mechanism design, and particularly the revelation principle, the principal need only consider games in which agents truthfully report their private information. A game of mechanism design is a game of private information in one of the agents, called the principal. Following Harsanyi, the agents receive secret messages from nature containing information relevant to payoffs, for example, a message may contain information about their preferences or the quality of a good for sale. We call this information the agents type, agents then report a type to the principal that can be a strategic lie. After the report, the principal and the agents are paid according to the structure the principal chose. As a benchmark the designer often defines what would happen under full information, thanks to a sweeping result called the revelation principle, no matter the mechanism a designer can confine attention to equilibria in which agents truthfully report type. The revelation principle states, To every Bayesian Nash equilibrium there corresponds a Bayesian game with the equilibrium outcome. The principle allows one to solve for a Bayesian equilibrium by assuming all players truthfully report type, in one blow it eliminates the need to consider either strategic behavior or lying. Assume a Bayesian game in which the strategy and payoff are functions of its type and what others do. The easiest one to define is for the mechanism to commit to playing the agents equilibrium strategies for them, Y, Θ → S → Y Under such a mechanism the agents of course find it optimal to reveal type since the mechanism plays the strategies they found optimal anyway
14.
Butter
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Butter is a dairy product containing up to 80% butterfat which is solid when chilled and at room temperature in some regions and liquid when warmed. It is made by churning fresh or fermented cream or milk to separate the butterfat from the buttermilk. It is generally used as a spread on plain or toasted bread products and a condiment on cooked vegetables, as well as in cooking, such as baking, sauce making, Butter consists of butterfat, milk proteins and water, and in some types, added salt. Butter may also be sold with added flavourings, such as garlic butter, most frequently made from cows milk, butter can also be manufactured from the milk of other mammals, including sheep, goats, buffalo, and yaks. Salt such as salt, flavorings and preservatives are sometimes added to butter. Rendering butter produces clarified butter or ghee, which is almost entirely butterfat, Butter is a water-in-oil emulsion resulting from an inversion of the cream, in a water-in-oil emulsion, the milk proteins are the emulsifiers. Butter remains a solid when refrigerated, but softens to a spreadable consistency at room temperature, the density of butter is 911 g/L. It generally has a yellow color, but varies from deep yellow to nearly white. Its unmodified color is dependent on the feed and genetics but is commonly manipulated with food colorings in the commercial manufacturing process. The word butter derives from the Latin butyrum, which is the latinisation of the Greek βούτυρον and this may have been a construction meaning cow-cheese, from βοῦς, ox, cow + τυρός, cheese. Nevertheless, the earliest attested form of the stem, turos, is the Mycenaean Greek tu-ro. The root word persists in the name butyric acid, a found in rancid butter. In general use, the term refers to the spread dairy product when unqualified by other descriptors. The word commonly is used to describe puréed vegetable or seed and nut products such as peanut butter and it is often applied to spread fruit products such as apple butter. Fats such as butter and shea butter that remain solid at room temperature are also known as butters. Unhomogenized milk and cream contain butterfat in microscopic globules and these globules are surrounded by membranes made of phospholipids and proteins, which prevent the fat in milk from pooling together into a single mass. Butter is produced by agitating cream, which damages these membranes and allows the milk fats to conjoin, variations in the production method will create butters with different consistencies, mostly due to the butterfat composition in the finished product. Butter contains fat in three forms, free butterfat, butterfat crystals, and undamaged fat globules
15.
Margarine
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Margarine is an imitation butter spread used for spreading, baking, and cooking. Hippolyte Mège-Mouriès created it in France, in 1869 and he was responding to a challenge by Emperor Napoleon III to create a butter substitute for the armed forces and lower classes. Whereas butter is made from the butterfat of milk, modern margarine is made mainly of refined oil and water. In some places in the United States it is referred to as oleo. Margarine, like butter, consists of an emulsion, with tiny droplets of water dispersed uniformly throughout a fat phase in a stable crystalline form. In some jurisdictions margarine must have a fat content of 80% to be labelled as such. Colloquially in the United States, the term margarine is used to describe non-dairy spreads like Country Crock, Margarine can be used for spreading, baking, and cooking. It is also used as an ingredient in other food products, such as pastries, doughnuts and cookies. Margarine originated with the discovery by French chemist Michel Eugène Chevreul in 1813 of margaric acid, scientists at the time regarded margaric acid, like oleic acid and stearic acid, as one of the three fatty acids that, in combination, form most animal fats. In 1853, the German structural chemist Wilhelm Heinrich Heintz analyzed margaric acid as simply a combination of stearic acid, Emperor Napoleon III of France offered a prize to anyone who could make a satisfactory butter alternative, suitable for use by the armed forces and the lower classes. French chemist Hippolyte Mège-Mouriès invented a substance he called oleomargarine, which shortened to the trade name margarine. Mège-Mouriès patented the concept in 1869 and expanded his initial manufacturing operation from France but had commercial success. In 1871, he sold the patent to the Dutch company Jurgens, in the same year a German pharmacist, Benedict Klein from Cologne, founded the first margarine factory Benedict Klein Margarinewerke, producing the brands Overstolz and Botteram. In John Steeles 1850 California gold miners journal, he wrote, I became acquainted with Mr. Dainels, from Baltimore, manufactured butter from tallow and lard, and it looked and tasted so much like real butter, that. I could not tell the difference, however, he deceived no one, but sold it for just what it was. He never explained the process of its manufacturer, and whether he was the originator of oleomargarine I do not know, the principal raw material in the original formulation of margarine was beef fat. In 1871, Henry W. Bradley of Binghamton, New York received U. S, patent 110,626 for a process of creating margarine that combined vegetable oils with animal fats. The depression of the 1930s, followed by the rationing of World War II, led to a reduction in supply of animal fat, while butter that cows produced had a slightly yellow color, margarine had a white color, making the margarine look more like lard
16.
Single-crossing condition
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In economics, the single-crossing condition or single-crossing property refers to how the probability distribution of outcomes changes as a function of an input and a parameter. This property can be extended to two or more variables, given x and t, for all x>x, t>t, F ≥ F ⟹ F ≥ F and F > F ⟹ F > F. This condition could be interpreted as saying that for x>x, the function g=F-F crosses the axis at most once. The condition is not symmetric in the variables, the single-crossing condition was posited in Samuel Karlins 1968 monograph Total Positivity. Such situations appear often in information economics, contract theory, social choice and political economics, among other fields
17.
William Vickrey
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William Spencer Vickrey was a Canadian-born professor of economics and Nobel Laureate. The announcement of his Nobel prize was made just three days prior to his death, Vickrey died while traveling to a conference of Georgist academics that he helped found and never missed once in 20 years. His Columbia University economics department colleague C. Lowell Harriss accepted the prize on his behalf. There are only three cases where a Nobel Prize has been presented posthumously. Vickrey was born in Victoria, British Columbia and attended school at Phillips Academy in Andover. After obtaining his B. S. in Mathematics at Yale University in 1935, he went on to complete his M. A. in 1937 and Ph. D. in 1948 at Columbia University, where he remained for most of his career. Vickrey was the first to use the tools of game theory to explain the dynamics of auctions, in his seminal paper, Vickrey derived several auction equilibria, and provided an early revenue-equivalence result. The revenue equivalence theorem remains the centrepiece of modern auction theory, the Vickrey auction is named after him. Vickrey worked on congestion pricing, the notion that roads and other services should be priced so that users see the costs that arise from the service being used when there is still demand. Congestion pricing gives a signal to users to adjust their behavior or to investors to expand the service in order to remove the constraint, the theory was later partially put into action in London. Vickrey wrote that taxes on production and labor with fees for holding valuable land sites would substantially improve the economic efficiency of the jurisdiction. Vickrey further argued that land value tax had no adverse effects, vickreys economic philosophy was influenced by John Maynard Keynes and Henry George. Working under General MacArthur Vickrey helped accomplish radical land reform in Japan, Vickrey had many graduate students and protegés at Columbia University, including the economists Jacques Drèze, Lynn Turgeon, and Harvey J. Levin. Vickrey married to Cecile Thompson in 1951 and he was a Quaker and a member of Scarsdale Friends Meeting. He died in Harrison, New York in 1996 from heart failure, counterspeculation, Auctions, and Competitive Sealed Tenders, Journal of Finance,1961. The paper originated auction theory, a subfield of game theory, fifteen Fatal Fallacies of Financial Fundamentalism, A Disquisition on Demand Side Economics. Arrow, Kenneth Joseph, Arnott, Richard J. Atkinson, Anthony A. Drèze, public Economics, Selected Papers by William Vickrey. CS1 maint, Multiple names, authors list Warner, Aaron W. Forstater, Mathew, Rosen, Sumner M. Commitment to Full Employment, The Economics, cS1 maint, Multiple names, authors list Pavlina R. Tcherneva, Forstater, Mathew
18.
Continuous distribution
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For instance, if the random variable X is used to denote the outcome of a coin toss, then the probability distribution of X would take the value 0.5 for X = heads, and 0.5 for X = tails. In more technical terms, the probability distribution is a description of a phenomenon in terms of the probabilities of events. Examples of random phenomena can include the results of an experiment or survey, a probability distribution is defined in terms of an underlying sample space, which is the set of all possible outcomes of the random phenomenon being observed. The sample space may be the set of numbers or a higher-dimensional vector space, or it may be a list of non-numerical values, for example. Probability distributions are divided into two classes. A discrete probability distribution can be encoded by a discrete list of the probabilities of the outcomes, on the other hand, a continuous probability distribution is typically described by probability density functions. The normal distribution represents a commonly encountered continuous probability distribution, more complex experiments, such as those involving stochastic processes defined in continuous time, may demand the use of more general probability measures. A probability distribution whose sample space is the set of numbers is called univariate. Important and commonly encountered univariate probability distributions include the distribution, the hypergeometric distribution. The multivariate normal distribution is a commonly encountered multivariate distribution, to define probability distributions for the simplest cases, one needs to distinguish between discrete and continuous random variables. For example, the probability that an object weighs exactly 500 g is zero. Continuous probability distributions can be described in several ways, the cumulative distribution function is the antiderivative of the probability density function provided that the latter function exists. As probability theory is used in diverse applications, terminology is not uniform. The following terms are used for probability distribution functions, Distribution. Probability distribution, is a table that displays the probabilities of outcomes in a sample. Could be called a frequency distribution table, where all occurrences of outcomes sum to 1. Distribution function, is a form of frequency distribution table. Probability distribution function, is a form of probability distribution table
19.
Tragedy of the commons
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The concept became widely known over a century later due to an article written by the ecologist Garrett Hardin in 1968. In this context, commons is taken to any shared and unregulated resource such as atmosphere, oceans, rivers, fish stocks. However, the term is used when describing a problem where all individuals have equal. Hence, tragedy of open access regimes or simply the open access problem are more apt terms, the tragedy of the commons is often cited in connection with sustainable development, meshing economic growth and environmental protection, as well as in the debate over global warming. It has also used in analyzing behavior in the fields of economics, evolutionary psychology, anthropology, game theory, politics, taxation. Although commons have been known to due to overuse, abundant examples exist where communities cooperate or regulate to exploit common resources prudently without collapse. In 1833, the English economist William Forster Lloyd published a pamphlet included a hypothetical example of over-use of a common resource. This was the situation of cattle herders sharing a common parcel of land on which they are entitled to let their cows graze. He postulated that if a herder put more than his number of cattle on the common. For each additional animal, a herder could receive additional benefits, if all herders made this individually rational economic decision, the common could be depleted or even destroyed, to the detriment of all. In 1968, ecologist Garrett Hardin explored this social dilemma in his article The Tragedy of the Commons, the essay derived its title from the pamphlet by Lloyd, which he cites, on the over-grazing of common land. Hardin focused on population growth, the use of the Earths natural resources. Hardin argued that if individuals relied on themselves alone, and not on the relationship of society and man, parents breeding excessively would leave fewer descendants because they would be unable to provide for each child adequately. Such negative feedback is found in the animal kingdom, Hardin said that if the children of improvident parents starved to death, if overbreeding was its own punishment, then there would be no public interest in controlling the breeding of families. It follows that any choice and decision with regard to the size of the family must irrevocably rest with the family itself, and cannot be made by anyone else. Overall, Hardin argued against relying on conscience as a means of policing commons, in the context of avoiding over-exploitation of common resources, Hardin concluded by restating Hegels maxim, freedom is the recognition of necessity. He suggested that freedom completes the tragedy of the commons, Hardins article was the start of the modern use of Commons as a term connoting a shared resource. They report that Hardin’s 1968 article was the one having the greatest career impact on biologists and is the most frequently cited, like Lloyd and Thomas Malthus before him, Hardin was primarily interested in the problem of human population growth
20.
Arrow's impossibility theorem
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The theorem is often cited in discussions of voting theory as it is further interpreted by the Gibbard–Satterthwaite theorem. The theorem is named after economist Kenneth Arrow, who demonstrated the theorem in his thesis and popularized it in his 1951 book Social Choice. The original paper was titled A Difficulty in the Concept of Social Welfare, if every voters preference between X and Y remains unchanged, then the groups preference between X and Y will also remain unchanged. There is no dictator, no single voter possesses the power to determine the groups preference. Cardinal voting systems are not covered by the theorem, as they convey more information than rank orders, the theorem can also be sidestepped by weakening the notion of independence. The axiomatic approach Arrow adopted can treat all conceivable rules within one unified framework, in that sense, the approach is qualitatively different from the earlier one in voting theory, in which rules were investigated one by one. One can therefore say that the paradigm of social choice theory started from this theorem. The practical consequences of the theorem are debatable, Arrow has said Most systems are not going to work all of the time. All I proved is that all can work badly at times, the framework for Arrows theorem assumes that we need to extract a preference order on a given set of options. Each individual in the society gives an order of preferences on the set of outcomes. We are searching for a voting system, called a social welfare function. It cannot simply mimic the preferences of a single voter, unrestricted domain, or universality For any set of individual voter preferences, the social welfare function should yield a unique and complete ranking of societal choices. Thus, Independence of irrelevant alternatives The social preference between x and y should depend only on the preferences between x and y. More generally, changes in individuals rankings of irrelevant alternatives should have no impact on the ranking of the subset. For example, the introduction of a candidate to a two-candidate election should not affect the outcome of the election unless the third candidate wins. An individual should not be able to hurt an option by ranking it higher, non-imposition, or citizen sovereignty Every possible societal preference order should be achievable by some set of individual preference orders. This means that the social function is surjective, It has an unrestricted target space. This, again, is a demand that the social welfare function will be sensitive to the preference profile
21.
James Mirrlees
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Sir James Alexander Mirrlees FRSE FBA is a Scottish economist and winner of the 1996 Nobel Memorial Prize in Economic Sciences. Born in Minnigaff, Kirkcudbrightshire, Mirrlees was educated at the University of Edinburgh and he was a very active student debater. One contemporary, Quentin Skinner, has suggested that Mirrlees was a member of the Cambridge Apostles along with fellow Nobel Laureate Amartya Sen during the period, between 1968 and 1976, Mirrlees was a visiting professor at the Massachusetts Institute of Technology three times. He taught at both Oxford University and University of Cambridge, during his time at Oxford, he published papers on economic models for which he would eventually be awarded his Nobel Prize. The papers centred on asymmetric information, which determines the extent to which they should affect the rate of saving in an economy. Among other results, he demonstrated the principles of moral hazard, the methodology has since become the standard in the field. Mirrlees and Vickrey shared the 1996 Nobel Prize for Economics for their contributions to the economic theory of incentives under asymmetric information. Mirrlees is also co-creator, with MIT Professor Peter A, diamond of the Diamond–Mirrlees efficiency theorem, which was developed in 1971. Mirrlees is emeritus Professor of Political Economy at the University of Cambridge and he spends several months a year at the University of Melbourne, Australia. He is currently the Distinguished Professor-at-Large of the Chinese University of Hong Kong as well as University of Macau, in 2009, he was appointed Founding Master of the Morningside College of the Chinese University of Hong Kong. Mirrlees is a member of Scotlands Council of Economic Advisers and he also led the Mirrlees Review, a review of the UK tax system by the Institute for Fiscal Studies. James Mirrlees at the Mathematics Genealogy Project
22.
Cumulative distribution function
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In the case of a continuous distribution, it gives the area under the probability density function from minus infinity to x. Cumulative distribution functions are used to specify the distribution of multivariate random variables. The probability that X lies in the semi-closed interval (a, b], in the definition above, the less than or equal to sign, ≤, is a convention, not a universally used one, but is important for discrete distributions. The proper use of tables of the binomial and Poisson distributions depends upon this convention, moreover, important formulas like Paul Lévys inversion formula for the characteristic function also rely on the less than or equal formulation. If treating several random variables X, Y. etc. the corresponding letters are used as subscripts while, if treating only one, the subscript is usually omitted. It is conventional to use a capital F for a distribution function, in contrast to the lower-case f used for probability density functions. This applies when discussing general distributions, some specific distributions have their own conventional notation, the CDF of a continuous random variable X can be expressed as the integral of its probability density function ƒX as follows, F X = ∫ − ∞ x f X d t. In the case of a random variable X which has distribution having a discrete component at a value b, P = F X − lim x → b − F X. If FX is continuous at b, this equals zero and there is no discrete component at b, every cumulative distribution function F is non-decreasing and right-continuous, which makes it a càdlàg function. Furthermore, lim x → − ∞ F =0, lim x → + ∞ F =1, the function f is equal to the derivative of F almost everywhere, and it is called the probability density function of the distribution of X. As an example, suppose X is uniformly distributed on the unit interval, then the CDF of X is given by F = {0, x <0 x,0 ≤ x <11, x ≥1. Suppose instead that X takes only the discrete values 0 and 1, then the CDF of X is given by F = {0, x <01 /2,0 ≤ x <11, x ≥1. Sometimes, it is useful to study the question and ask how often the random variable is above a particular level. This is called the cumulative distribution function or simply the tail distribution or exceedance. This has applications in statistical hypothesis testing, for example, because the one-sided p-value is the probability of observing a test statistic at least as extreme as the one observed. Thus, provided that the test statistic, T, has a continuous distribution, in survival analysis, F ¯ is called the survival function and denoted S, while the term reliability function is common in engineering. Properties For a non-negative continuous random variable having an expectation, Markovs inequality states that F ¯ ≤ E x, as x → ∞, F ¯ →0, and in fact F ¯ = o provided that E is finite. This form of illustration emphasises the median and dispersion of the distribution or of the empirical results, if the CDF F is strictly increasing and continuous then F −1, p ∈, is the unique real number x such that F = p
23.
Alvin E. Roth
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Alvin Elliot Roth is an American academic. He is the Craig and Susan McCaw professor of economics at Stanford University, in 2012, he won the Nobel Memorial Prize in Economic Sciences jointly with Lloyd Shapley for the theory of stable allocations and the practice of market design. Alvin Roth graduated from Columbia Universitys School of Engineering and Applied Science in 1971 with a degree in Operations Research. He then moved to Stanford University, receiving both his Masters and PhD also in Operations Research there in 1973 and 1974 respectively. After leaving Stanford, Roth went on to teach at the University of Illinois which he left in 1982 to become the Andrew W. Mellon professor of economics at the University of Pittsburgh. While at Pitt, he served as a fellow in the universitys Center for Philosophy of Science. In 1998, Roth left to join the faculty at Harvard where he remained until deciding to return to Stanford in 2012, in 2013 he became a full member of the Stanford faculty and took emeritus status at Harvard. Roth is an Alfred P. Sloan fellow, a Guggenheim fellow, and he is also a member of the National Bureau of Economic Research and the Econometric Society. In 2013, Roth, Shapley, and David Gale won a Golden Goose Award for their work on market design, a collection of Roths papers is housed at the Rubenstein Library at Duke University. Roth has worked in the fields of game theory, market design, in particular, he helped redesign mechanisms for selecting medical residents, New York City high schools and Boston primary schools. Roths 1984 paper on the National Resident Matching Program highlighted the system designed by John Stalknaker, the system was built on theoretical foundations independently introduced by David Gale and Lloyd Shapley in 1962. Roth proved that the NRMP was both stable and strategy-proof for unmarried residents but deferred to future study the question of how to match married couples efficiently, in 1999 Roth redesigned the matching program to ensure stable matches even with married couples. Roth later helped design the market to match New York City public school students to schools as incoming freshmen. Previously, the district had students mail in a list of their five preferred schools in rank order. As a result, schools could tell whether or not students had listed them as their first choice and this meant that some students really had a choice of one school, rather than five. It also meant that students had an incentive to hide their true preferences, Roth and his colleagues Atila Abdulkadiroğlu and Parag Pathak proposed David Gale and Lloyd Shapleys incentive-compatible student-proposing deferred acceptance algorithm to the school board in 2003. The school board accepted the measure as the method of selection for New York City public school students, working with Atila Abdulkadiroglu, Parag A. Pathak, and Tayfun Sonmez, Roth presented a similar measure to Bostons public school system in 2003. Some Boston parents had informally recognized this feature of the system, Boston held public hearings on the school selection system and finally in 2005 settled on David Gale and Lloyd Shapleys incentive-compatible student-proposing deferred acceptance algorithm
24.
Nobel Foundation
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The Nobel Foundation is a private institution founded on 29 June 1900 to manage the finances and administration of the Nobel Prizes. The Foundation is based on the last will of Alfred Nobel and it also holds Nobel Symposia on important breakthroughs in science and topics of cultural or social significance. Alfred Bernhard Nobel, born on 21 October 1833 in Stockholm Sweden, was a chemist, engineer, innovator, armaments manufacturer and he owned Bofors, a major armaments manufacturer, which he had redirected from its original business as an iron and steel mill. Nobel held 355 different patents, dynamite being the most famous, Nobel amassed a sizeable personal fortune during his lifetime, thanks mostly to this invention. In 1896 Nobel died of a stroke in his villa in San Remo, Nobels will expressed a request, to the surprise of many, that his money be used for prizes in physics, chemistry, peace, physiology or medicine and literature. Though Nobel wrote several wills during his lifetime, the last was written a little over a year before he died, Nobel bequeathed 94% of his total assets,31 million Swedish kronor, to establish and endow the five Nobel Prizes. The executors of his will were Ragnar Sohlman and Rudolf Lilljequist who formed the Nobel Foundation to take care of Nobels fortune, as of December 31,2015, the assets controlled by the Nobel Foundation amounted to 4.065 billion Swedish kronor. The Nobel Foundation was founded as an organisation on 29 June 1900 specifically to manage the finances. It is based on Nobels last will and testament, at the time Nobels will led to much specticism and criticism and thus it was not until April 26,1897 that his will was approved by the Storting. Soon thereafter they appointed the members of the Norwegian Nobel Committee that was to award the Peace Prize, shortly after, the other prize-awarding organizations followed, Karolinska Institutet on June 7, the Swedish Academy on June 9 and the Royal Swedish Academy of Sciences on June 11. The next thing the Nobel Foundation did was to try to agree on guidelines for how the Nobel Prize should be awarded, in 1900 the Nobel Foundations newly created statutes were promulgated by King Oscar II. In 1905 the Union between Sweden and Norway was dissolved which meant the responsibility for awarding Nobel Prizes was split between the two countries, norways Nobel Committee became the awarder of the Peace Prize while Sweden became the awarder of the other prizes. In accordance with Nobels will, the task of the Nobel Foundation is to manage the fortune Nobel left after him in a fund. Another important task of the Nobel Foundation is to represent the Nobel Prize to the outside world, the Nobel Foundation is not involved in any way in the process of selecting the Nobel laureates. In many ways the Nobel Foundation is similar to an investment company in that it invests money in ways to create a solid funding base for the prize. The Nobel Foundation is exempt from all taxes in Sweden and from investment taxes in the United States, since the 1980s the Foundations investments began to earn more money than previously. At the beginning of the 1980s the award money was 1 million SEK, according to the statutes the Foundation should consist of a Board with its seat in Stockholm. It should consist of five men, the Chairman of the board should be appointed by the King in Council
25.
JSTOR
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JSTOR is a digital library founded in 1995. Originally containing digitized back issues of journals, it now also includes books and primary sources. It provides full-text searches of almost 2,000 journals, more than 8,000 institutions in more than 160 countries have access to JSTOR, most access is by subscription, but some older public domain content is freely available to anyone. William G. Bowen, president of Princeton University from 1972 to 1988, JSTOR originally was conceived as a solution to one of the problems faced by libraries, especially research and university libraries, due to the increasing number of academic journals in existence. Most libraries found it prohibitively expensive in terms of cost and space to maintain a collection of journals. By digitizing many journal titles, JSTOR allowed libraries to outsource the storage of journals with the confidence that they would remain available long-term, online access and full-text search ability improved access dramatically. Bowen initially considered using CD-ROMs for distribution, JSTOR was initiated in 1995 at seven different library sites, and originally encompassed ten economics and history journals. JSTOR access improved based on feedback from its sites. Special software was put in place to make pictures and graphs clear, with the success of this limited project, Bowen and Kevin Guthrie, then-president of JSTOR, wanted to expand the number of participating journals. They met with representatives of the Royal Society of London and an agreement was made to digitize the Philosophical Transactions of the Royal Society dating from its beginning in 1665, the work of adding these volumes to JSTOR was completed by December 2000. The Andrew W. Mellon Foundation funded JSTOR initially, until January 2009 JSTOR operated as an independent, self-sustaining nonprofit organization with offices in New York City and in Ann Arbor, Michigan. JSTOR content is provided by more than 900 publishers, the database contains more than 1,900 journal titles, in more than 50 disciplines. Each object is identified by an integer value, starting at 1. In addition to the site, the JSTOR labs group operates an open service that allows access to the contents of the archives for the purposes of corpus analysis at its Data for Research service. This site offers a facility with graphical indication of the article coverage. Users may create focused sets of articles and then request a dataset containing word and n-gram frequencies and they are notified when the dataset is ready and may download it in either XML or CSV formats. The service does not offer full-text, although academics may request that from JSTOR, JSTOR Plant Science is available in addition to the main site. The materials on JSTOR Plant Science are contributed through the Global Plants Initiative and are only to JSTOR