### 经济代写|微观经济学代写Microeconomics代考|ECON1901D

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• Statistical Inference 统计推断
• Statistical Computing 统计计算
• (Generalized) Linear Models 广义线性模型
• Statistical Machine Learning 统计机器学习
• Longitudinal Data Analysis 纵向数据分析
• Foundations of Data Science 数据科学基础

## 经济代写|微观经济学代写Microeconomics代考|Morality and Corporate Social Responsibility

In the realistic case that the institutional structure of a state is imperfect, in the sense that it does not always provide incentives for (Pareto-)efficient behavior, the question is how the people within society do or should deal with these inefficiencies. An example of this is when property rights are imperfectly enforced because of high transaction costs. The better part of everyday transactions is, for example, formally but not materially protected by property rights, because it would be too costly to enforce them. If a customer buys a bottle of orange juice at a kiosk and the retail clerk refuses to give back the change, the opportunity costs of calling the police, verifying the tort (which is difficult, if the retail clerk refuses to confess), etc. are likely prohibitive. Alternatively, on that subject, it is equally unlikely that the retail clerk can do much to prevent the customer from saying thank you and walking away with the bottle of juice without paying for it. Property rights cannot explain the fact that the overwhelming number of these transactions take place smoothly and efficiently.

There must be other mechanisms at work, and I will briefly discuss two of them. First, the interaction may not be singular but rather repeated and, if there is always a probability that the customer and the retail clerk will meet again in the future, it would be rather shortsighted to sacrifice future trades for the (relatively small) present gain. Repeated interactions can, therefore, be used to build up a reputation as a reliable trading partner, which can stabilize transactions, even in situations where formal property rights cannot be protected by the state. Second, the trading partner may have an intrinsic motivation to play fair. There is broad, scientific consensus by now that individuals are, for good evolutionary reasons, not always selfish, but have the ability and also (sometimes) the desire to act morally. The marginal willingness to keep one’s promises, to pay one’s bills, etc., however, depends very much on the perception of the situational context. If people have the feeling that-by and large-society gives everyone his or her fair share, their willingness to cooperate, to act fairly and to voluntarily follow certain moral standards of behavior is much larger than in a situation that is considered unfair from the beginning. Social norms and the intrinsic desire to act morally are then substitutes for formal property-rights enforcement. The more porous the system of property-rights enforcement is, the more important moral behavior becomes.

## 经济代写|微观经济学代写Microeconomics代考|Four Boundary Cases

Coming back to the variations of the bakery example from the last subchapter, the distinctive difference between the two types of environmental interdependencies (sewage and air pollution) was the physical “reach” of the interdependency-causing activity. In the sewage-case, there was only one person, the fisherman, who was affected by the interdependency with the bakery whereas, in the air-pollution case, the bakery influenced all the residents. These differences in the number of people, who are influenced by economic activities, are an important element in the classification of goods and services and in developing an understanding of the functioning of markets.

The implicit assumption behind the model of competitive markets discussed in Chap. 4 was that the interdependency is bilateral. A typical example for a bilateral interdependency is an apple. Either one or the other person can eat anple (one cannot eat the same apple twice), so Ann’s decision to sell an apple to Bill has no direct physical consequences for third parties. The same was true in the sewage example. However, the bilateralism of the interdependency was a result of the fact that only one fisherman made his living from the lake. If two fishermen had have cast their nets into the lake, the interdependency would have been trilateral, because the emissions by the factory would have reduced the catches of both fishermen. In the air-pollution example, the reach of the interdependency was even larger, covering all residents of the area. This observation motivates the following definition.

## 经济代写|微观经济学代写Microeconomics代考|Choice Sets and Preferences

In order to develop a decision theory, one needs two conceptual ingredients. First, a set of alternatives from which an individual can choose. Call it a choice set and denote it by $X=\left{x^{1}, x^{2}, \ldots, x^{n}\right}$, in which $x^{i}, i=1, \ldots, n$ is one of the possible alternatives and assume, for simplicity, that the total number of alternatives $n$ is finite. The idea of a choice set is very general. If one goes to a café, one’s choice set is a subset of all of the items on the menu. This implies that an alternative can be a list of individual items, like “one cup of tea, two scones, and one portion of orange jam.” Mathematically speaking, this type of list is called a tuple. If $x^{i}$ is the above-mentioned alternative, it could be denoted as $x^{i}={$ quantity of tea, number of scones, quantity of orange jam $}={1,2,1}$. If one goes to vote, one’s choice set is the set of all admissible parties or candidates, and if one is deciding what to do after high school, one’s choice set is the set of all potential professions.

Second, the individual may prefer some alternatives to others, which is an expression of her taste or preferences. Assume that she is able to make pairwise comparisons of all the alternatives in $X$ to make statements like, “I prefer alternative $x^{i}$ to alternative $x^{j}, “$ or “I am indifferent between alternative $x^{j}$ and alternative $x^{j} . “$ In order to have a lean notation, economists use the following symbols for these statements: “I prefer alternative $x^{i}$ to alternative $x^{j}$ ” is denoted by ” $x^{i}>x^{j “}$ and “I am indifferent between alternative $x^{i}$ and alternative $x^{j “}$ by ” $x^{i} \sim x^{j}$.”

It is important to understand the exact meaning of the terminology. Mathematically speaking, one takes two arbitrary elements of $X, x^{j}$ and $x^{j}$, and compares them to each other. This comparison is called a binary relation on $X$. The strict preference relation, ” $>, “$ and the indifference relation, ” $\sim$,” can therefore be denoted as a subset of the Cartesian product of $X, X \times X$. (I am slightly abusing the notation by using the symbols as names for both the relation and for indicating the binary comparison of alternatives.)

Here is an example: Assume that Ann can choose between an apple, $x^{1}$, an orange, $x^{2}$, and a cherry, $x^{3}$. In this case, the choice set is equal to $X=\left{x^{1}, x^{2}, x^{3}\right}$ and the Cartesian product is the set of all ordered pairs $X \times$ $X=\left{\left(x^{1}, x^{1}\right),\left(x^{1}, x^{2}\right),\left(x^{1}, x^{3}\right),\left(x^{2}, x^{1}\right),\left(x^{2}, x^{2}\right),\left(x^{2}, x^{3}\right),\left(x^{3}, x^{1}\right),\left(x^{3}, x^{2}\right),\right.$, $\left.\left(x^{3}, x^{3}\right)\right}$. Assume that Ann prefers apples to oranges and is indifferent between oranges and cherries, $x^{1}>x^{2}, x^{2} \sim x^{3}$. If one reads a pair $\left(x^{i}, x^{j}\right)$ as ” $x^{i}$ stands in relation $R$ to $x^{j}$,” one can represent her preferences, ” $>$,” by the subset of pairs $\left{\left(x^{1}, x^{2}\right)\right}$ and her preferences, ” $\sim$,” by the subset of pairs $\left{\left(x^{1}, x^{1}\right),\left(x^{2}, x^{2}\right),\left(x^{2}, x^{3}\right),\left(x^{3}, x^{3}\right)\right}$. Note that the pairs $\left(x^{i}, x^{i}\right)$ are elements of the subset, because Ann is indifferent between an alternative and itself. This property is not self-evident from a purely mathematical point of view and, therefore, sometimes stated as an assumption of the preference relation that is known as reflexivity.

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