The Many Economic Applications of Shadow Price

The Many Economic Applications of Shadow Price In the strictest sense, a shadow price is any price that is not a market price. A price that is not based on actual market exchanges must then be calculated or mathematically derived from otherwise indirect data. Shadow prices can be derived for anything from a resource to a good or service. But this is just the tip of the iceberg. While economists tend to be committed to markets as a means of valuation, the lack of a market price is not necessarily a limitation of their research. In fact, economists recognize â€Å"goods† that carry societal value for which there are no markets to set a market price. Such goods might include the intangible like clean air. Conversely, economists also recognize that there exist goods that do have a market-traded value that is simply not a good representation of the good’s true societal value. For example, electricity produced from coal carries a market price that does not consider the impact or â€Å"social cost† of coal burning on the environment. It is in these scenarios that economists find it difficult to work, which is why the discipline relies on the calculation of shadow prices to give a â€Å"price-like† value to otherwise unpriced resources. The Many Definitions of Shadow Price While the most basic understanding of the term shadow price relates simply to the lack of a market price for some resource, good, or service, the meanings of the term as derived from its real-world uses relay a more complicated story. In the world of investments, shadow price can refer to the actual market values of a money market fund, which essentially refers to securities that are accounted for based on amortized cost rather than a value assigned by the market. This definition carries less weight in the world of economics. More relevant to the study of economics, another definition of shadow price denotes it as a proxy value of a good or intangible asset that is most often defined by what must be given up to gain an extra unit of the good or asset. Last, but not least, shadow prices can also be utilized to derive an inclusive value of the impact of a project, whether it be a benefit or costs, using stated preferences, making the process an extremely subjective one. In the study of economics, shadow prices are most often used in cost-benefit analyses in which some elements or variables cannot be otherwise quantified by a market price. In order to fully analyze the situation, each variable must be assigned a value, but it is important to note that the calculation of shadow prices in this context is an inexact science. Technical Explanations of Shadow Price in Economics In the context of a maximization problem with a constraint (or constrained optimization), the shadow price on the constraint is the amount that the objective function of the maximization would increase by if the constraint were relaxed by one unit. In other words, the shadow price is the marginal utility of relaxing the constant or conversely, the marginal cost of strengthening the constraint. In its most formal mathematical optimization setting, the shadow price is the value of a Lagrange multiplier at the optimal solution.

Borderline Personality Disorders Essays - Psychiatric Diagnosis

Borderline Personality Disorders Essays - Psychiatric Diagnosis Borderline Personality Disorders According to the latest estimate, five million Americans fit the profile of the borderline personality disorder. One moment calm and engaging, the next raging and impulsive, guilty and self-mutilationg. Borderlines puzzle those around them, straining relationships to the breaking point. Many psychiatrists define B.P.D.'s as a problem with who you are. It is one of the most complicated forms of mental illnesses. They tend to have many problems in thier relationships. They get invloved with other people quickly, but things also get wierd quickly. They're impulsive in a number of ways, many are related to suicide attempts. These attempts usually occur because of a problem in a relationship. People who are most likely to be able to borderline patients are those with extremely high I.Q.'s or other positive personality traits, and mothers with many children. B.P.D. is characterized by stable and persistant ways of behavior and thought. Most psychiatrists say that borderlines are the neediest people in the world, but alienate everyone they seek love from. Borderline Personality Disorder is caused by some defect in early attatchment that leads to the person searching for some type of protective relationship which makes up for what they unfairly didn't get in their childhood. It's a desperate search for someone who will take care of them. Most patients can function well as long as they have someone they feel will be there to care for them and believe in them. If the patient feels any sourt of betryal from thier specia lperson, they wll become abusive, obsessive,and in some cases, maybe even stalk the person. Sometimes a person with the disease will even become self-destuctive b/c they will want care ir protection from others. This is how they prevent people from leaving them. Borderline patients do learn from experience. By the time they are 30 years old, they will be able to build relationships or they will try to avoid getting too involved with others, so they turn to churches, self-help groups, or employment situations. Then they become more comfortable with their feelings, and they are less likely to feel they are bad people. Many borderlines will go to therapy because they attempt suicide or have suicidal feelings. Therapists are cautios to treat people with the disorder b/c they are concerned about their own personal life and think that the patient may intrude and disrupt them. Some patients have been known to park on thier therapists lawn, wanting to go on vacation with them, and be extemely jealous of thier children. Sometimes, therapists can diagnose a borderline personality in 10 minutes. This is possible b/c they don't have very good boundaries and will give you deep information in minutes. Attempted suicide is usually the most characteristic symptom of the disorder. Drugs don't help boderline patients b/c usually from many years of treatment, many people are back to square one. Believe it or not, time is considered one of the best treatments b/c it wears the pathology down. The 5 most Diagnostic Criteria for Borderline Personality Disorder: Making efforts to aviod real or imagined abandonment. Persistently unstable self-image ar sense of self. Feelings of emptiness. Stress-related paranoya and shyness. Thoughts of suicide and suicidal attempts. Bibliography www.electriclibrary.com

Term Paper on E-Business Example | Topics and Well Written Essays - 2000 words

On E-Business - Term Paper Example As far as the marketers are concerned online marketing has increased the reach, reduced planning time, lowered the costs and with the use of technology they are able to reduce the sales points and offer a number of payment options to the customers. The prevalence of the Internet provides efficiency and convenience but as technology has developed, risks and uncertainties too have developed which directly impact online shopping behavior and customer satisfaction. In the case of internet banking, the perceived security risks are high as a third party can easily intercept the system (Mann and Sahni 2011). On the supply side too, the sellers are subject to security and fraud risks. E-business and online purchase subjects the customer to unique risks such as credit card fraud, non-delivery of goods after purchase, private information being shared with other portals, and lack of guarantee of the good and services purchased (Koyuncu and Bhattacharya 2004). Such risks prevent the customers fr om buying high-priced items online or items that would require visual inspection. Customers also fear delays in delivery or goods damaged in delivery, which poses a challenge for the sellers (Sharma 2011). Lack of face-to-face interactions emphasizes the role of trust in online payments (Ranaweera, McDougall and Bansal 2005). Trust in an online environment takes time to develop and is based on past experience and recommendations by the third party (Mann and Sahni 2011). Fraud and security risks faced by the sellers have limited the growth of e-business. However, as technology has developed secure transactions and encryption have developed too, offering guarantees and security to buyers and sellers. E-business has more risks than retail shopping but in spite of the risks internet business has grown because of the numerous advantages it offers. These advantages include lower transaction cost, lower search cost both in terms of time and money; wider range to select the products from, l ower prices and savings on time as shopping is much faster (Koyuncu and Bhattacharya 2011). However, if the delivery time increases, or the risks of payments increases, the customers are likely to engage less in e-business. The theory of reasoned action (TRA) explains that human behavior is based on the beliefs and intentions. Bonera (2011) finds that online purchase intention could be influenced by the construct of playfulness but then perceived security and usefulness influence the purchase intention. Thus, if the perceived security level is low, online purchase is likely to be adversely impacted. Apart from the security concerns, ease of use and website quality can influence consumers’ online purchase behavior. A satisfied customer would have the intention to return to the website and also be willing to recommend the website to friends (Ranaweera, McDougall and Bansal 2005). While the first transaction may stem from curiosity or playfulness, subsequent transactions would d epend upon the actual delivery and consumption relating to the first transaction. Acquisition costs are higher than retention costs and hence it is a challenge for the marketers to convert the first-time visitors to actual buyers. There exists a definite relationship between website quality and website satisfaction. At the same time consumer