Economics

Cost-Benefit Analysis Cost-benefit analysis (CBA) can be explained as a procedure for estimating all costs involved and possible profits to be derived from a business…

Chainstore Paradox The chainstore paradox (or “chain-store paradox”) is a concept that purports to refute standard game theory reasoning. The chain store game is a…

About Nash Equilibrium Nash Equilibrium is a concept of game theory where the optimal outcome of a game is one where no player has an…

About Bayesian Efficiency Bayesian efficiency addresses an appropriate economic definition of Pareto efficiency where there is incomplete information. Under Pareto efficiency, an allocation of a…

About Pareto Efficiency Pareto efficiency (or Pareto optimality) is a quality of allocations in economics and game theory. If an allocation is Pareto efficient, no…

About Allocative Efficiency Allocational efficiency is a characteristic of an efficient market in which capital is allocated in a way that is most beneficial to…

About Agency Cost Agency costs are the costs of disagreement between shareholders and business managers, who may not agree on which actions are best for…

About Contract Theory Contract theory is an economic theory that entails how parties can develop a legal agreement in a situation that involves asymmetric information.…

About Wage Curve Wage curve is a curve which represents a relationship between the rate of unemployment (plotted on the X-axis) and the wage rate…

Reflexivity in Economics In Economics reflexivity refers to the self-reinforcing effect of market sentiment, whereby rising prices attract buyers whose actions drive prices higher still…

About Goodhart’s Law Goodhart’s Law is a theory, which was introduced by Professor Charles Goodhart stating that when a measure becomes the target, it can…

About Phillips Curve The Phillips curve is an economic concept developed by William Phillips (A.W. Phillips) stating that inflation and unemployment have a stable and…