MTC Chapter 15 — Markets and Intermediaries¶

Part V · Week 14 · Seed 20261501

The four keepers (Appendix B.6). At the interior optimal field $n^*=4$, the auction converts 3.40 of the champion buyer's 5.5 awareness rent into the seller's price.

In [1]:
import sys, os
sys.path.insert(0, r"/home/claude/mtc/mtc-course/downloads/engine_lib")
sys.path.insert(0, r"/home/claude/mtc/nbbuild")
from mtcplot import apply_style, MTC_RED, BRASS, SLATE, MTC_RED_LITE, MTC_RED_DARK
import matplotlib.pyplot as plt
import numpy as np
apply_style()

Where the 5.5 lives: the advisor's conversion¶

In [2]:
from engines import mtc_engine_ch15 as e
adv = e.advisor_conversion()
fig, ax = plt.subplots(figsize=(7,4))
converted = adv["converted"]; retained = adv["champion_rent"] - converted
ax.barh(["awareness rent"], [converted], color=MTC_RED, edgecolor="white", label=f"to seller ({converted})")
ax.barh(["awareness rent"], [retained], left=[converted], color=SLATE, alpha=0.5, edgecolor="white", label=f"retained ({retained:.1f})")
ax.text(converted/2, 0, f"{converted}", ha="center", va="center", color="white", fontweight="bold")
ax.text(converted+retained/2, 0, f"{retained:.1f}", ha="center", va="center", color="white", fontweight="bold")
ax.set_xlim(0, 5.5); ax.set_xlabel("champion buyer's awareness rent (5.5)")
ax.set_title(f"At $n^*={adv['n_star']}$, the auction converts 3.40 to the seller")
ax.legend(loc="lower right")
plt.tight_layout(); plt.show()
for k,v in e.keepers().items(): print(f"  {k}: {v['house']}")
No description has been provided for this image 
  law_firm: fee <= 4
  arranger: moat 0.4-0.6
  dealer_amm: 0.15 / 0.30
  advisor: fee <= 3.40

Validation¶

Every number above is reproduced by the seeded engine; the checks below must all pass.

In [3]:
from engines import mtc_engine_ch15 as _e
v = _e.validation_checks(); v.pop("_values", None)
for k, val in v.items():
    print(f"  {k}: {val}")
assert v["ALL_PASS"], "validation failed"
print("\nALL_PASS — matches notebook + workbook + API")

  V1_law_firm_fee_4: True
  V2_advisor_fee_3p40: True
  V3_n_star_4: True
  V4_converted_3p40: True
  V5_champion_rent_5p5: True
  V6_seller_share_ratio: True
  V7_concentration_fragile_above_half: True
  V8_concentration_safe_below_half: True
  ALL_PASS: True

ALL_PASS — matches notebook + workbook + API