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There are actually several different ways you could formulate this problem in game theoretic terms. Hoping this is not too basic an answer for you : from what you write, the two canonical approaches would be to frame things in terms of Cournot oligopolies (firms simultaneously set quantities and prices result from the market clearing condition supply=demand) ...


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What you are talking about is called regression using fractional polynomials and it has its merits. The canonical reference is this one: Regression Using Fractional Polynomials of Continuous Covariates: Parsimonious Parametric Modelling by Royston and Altman (1994) From the abstract: The relationship between a response variable and one or more ...


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A good introductory book with a lot of data and statistics provided is: "Macroeconomics: Understanding the Global Economy" by David Miles and Andrew Scott. You can find the link to the book here: Macroeconomics - Miles/Scott It uses a lot of real world examples to relate economic concepts with real data and explain observed economic phenomena. If you are ...


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Here is the full math proof. Let g be the GMV portfolio and p be another asset. We have: $$ \begin{align*} Cov(x_g, x_p) &= E[{w_g}^T (x- \overline{x}) {(x- \overline{x})}^Tw_p]\\ &= {w_g}^TE[(x- \overline{x}) {(x- \overline{x})}^T]w_p\\ &= {w_g}^T\Sigma w_p \\ &= (\displaystyle\frac{{i}^T {\Sigma}^{-1}}{C})\Sigma w_p\\ &= ...


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I agree with @MattWolf The graph you show is confusing and evil, it makes me feel dumb every time I look at it. So I inverted the axis. Now we see the familiar shape of an utility curve, discussed in your previous question. It is upward sloping at a declining rate. In this case $u$ takes the place of $R_p$ and the general form of mean variance utility is ...



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