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RE: st: Draw an offer curve (supply curve)?


From   Guang Dai <Guang.Dai@albertamsa.ca>
To   "statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu>
Subject   RE: st: Draw an offer curve (supply curve)?
Date   Wed, 2 Nov 2011 15:31:27 -0600

Who goes first, good question. 
All ID represent the sellers, not buyers. 
We have a price-for-all design, that is no matter how much a seller (ID) asks, the seller gets the price determined by the supply and demand equilibrium. 
People offer zeros because they know demand is high enough to absorb all offers priced at 0. Thus offering at 0 guarantees the they can sell their goods.

>> How about something like this:
>>
>> . input id q p
>> 1       10                         99
>> 2        23                        90
>> 1        5                         50
>> 4       30                         32
>> 3       39                         10
>> 2       30                          0
>> 4       20                          0
>> 3       20                          0
>> end
>>
>> . sort p                  // put data in ascending price order
>> . gen totalq = sum(q)     // running sum of total quantity offered
>>                          // for price <= p . line p totalq, 
>> connect("stairstep")
>>

I'm not sure there is a clear way to represent the ID's of the offered quantities, because the prices are not unique.  For example, three different sellers are all willing to sell units at a price of zero.  Who goes first?

That said, I have a minor correction.  I think the graph command should be

. line p totalq, connect("stepstair")     // not "stairstep"

Say I wanted to buy 100 units.  Then I would have to bid 10, not zero.


Brian P. Poi
Senior Economist
StataCorp LP

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