Month: October 2016
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PIPP: Democracy & Governance
Mechanistic institutional definitions of a democracy are based on the electoral systems and the powers it hands to officials. There are also soft definitions of democracy that focus on citizens’ rights to form interest groups (pressure groups, political parties, etc.) and judicial protection of citizens. The quality of a democracy can be rated based on…
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Principles of Economics: Imperfect Competition
Monopoly Barriers to entry are the fundamental cause for the rise of monopoly. Barriers appear in three forms: ownership of key resources, exclusive production rights and an efficient (return-to-)scale. A firm’s ability to influence the market price is called market power. It entails that a firm can raise the price above some competitive level in…
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QPAM: Uncertainty
A first form of uncertainty is randomness. It is a stochastic behaviour that can be dealt with sensitivity analysis, estimates from experience (actuarial) or hedging. A more complicated form of uncertainty is indeterminacy. It describes situations that are qualitatively known, but cannot be reliably quantified. It is often addressed by attempting to quantify it anyway…
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Principles of Economics: Public and Common Goods
To define Public Goods we need two concepts: Excludable goods and Rival goods. Excludable goods can be prevented from use (food) in contrast to non-excludable goods that can always be consumed (radio or air). Rival goods cannot be consumed without diminishing others’ use of it (food) in contrast to non-rival goods (mp3-files). Based on the…
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BSTP: Computing
The digital revolution was carried by the development of transistors. The first triode was created in 1907 (similar to the air plane in 1903). Followed by field-effect transistor (FET) in 1925 and finally followed by today’s standard a silicon transistor in 1954. Based on transistors a first digital computer (ENIAC) was built in 1947 and…
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CGSS: Complex Networks
Behind complex networks, there are networks that describe the interaction between components. Basics A network is a set of nodes interconnected by a set of links. The adjacency matrix [latex]A[/latex] of a network is the matrix which contains non-zero element [latex]A_{ij}[/latex] if there exists an edge between node [latex]i[/latex] and [latex]j[/latex]. The resulting graph is…
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Principles of Economics: Externalities
Externality An uncompensated impact of one person’s action on the well-being of a bystander. It is a type of market failure as it reduces the efficiency of the market. In general, it is caused by self-interested buyers and sellers neglecting the external costs or benefits of their actions. However, public policy can reduce externalities and…
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BSTP: Further Industrial Revolution
Technological development occurs in two forms: intensive growth (development of new methods) and extensive growth (improving current methods). At the time (1930) Keynes predicted 15-hour work weeks by 2030, based on the reduced work necessary to reach the same economic productivity. This was based on the intensive growth of the 19th and 20th century. The…
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BSTP: Of cars
In the context of Geel’s book – specifically cars – we discuss the following questions: How did niches emerge in the context of existing technology regime? A horse-based transport moved to electric-based transport in the 19th century, before the internal combustion engine took off. Electric batteries and plugs where not standardised and therefore it was…
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CGSS: Introduction to Mechanism Design
Game Theory outlines the problem of the free-rider dilemma in public goods. In order to overcome the tragedy of the commons mechanism design was proposed. The basic idea is to define the the payoff and actions in order to drive people towards a preferred behaviour. Public Goods Game From the mechanism design perspective two individuals …