Related Research Articles
In economics, a network effect is the phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products. Network effects are typically positive, resulting in a given user deriving more value from a product as more users join the same network. The adoption of a product by an additional user can be broken into two effects: an increase in the value to all other users and also the enhancement of other non-users' motivation for using the product.
An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition exist and are described in the section about different types. The branch of economic theory dealing with auction types and participants' behavior in auctions is called auction theory.
From a legal point of view, a contract is an institutional arrangement for the way in which resources flow, which defines the various relationships between the parties to a transaction or limits the rights and obligations of the parties.
In economics, insurance, and risk management, adverse selection is a market situation where buyers and sellers have different information. The result is the unequal distribution of benefits to both parties, with the party having the key information benefiting more.
In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other.
Experimental economics is the application of experimental methods to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms. Economic experiments usually use cash to motivate subjects, in order to mimic real-world incentives. Experiments are used to help understand how and why markets and other exchange systems function as they do. Experimental economics have also expanded to understand institutions and the law.
Econophysics is a non-orthodox interdisciplinary research field, applying theories and methods originally developed by physicists in order to solve problems in economics, usually those including uncertainty or stochastic processes and nonlinear dynamics. Some of its application to the study of financial markets has also been termed statistical finance referring to its roots in statistical physics. Econophysics is closely related to social physics.
Paul Robert Milgrom is an American economist. He is the Shirley and Leonard Ely Professor of Humanities and Sciences at the Stanford University School of Humanities and Sciences, a position he has held since 1987. He is a professor in the Stanford School of Engineering as well and a Senior Fellow at the Stanford Institute for Economic Research. Milgrom is an expert in game theory, specifically auction theory and pricing strategies. He is the winner of the 2020 Nobel Memorial Prize in Economic Sciences, together with Robert B. Wilson, "for improvements to auction theory and inventions of new auction formats".
In economics, a market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services to buyers in exchange for money. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and allocation of resources in a society. Markets allow any tradeable item to be evaluated and priced. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights of services and goods. Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale.
A double auction is a process of buying and selling goods with multiple sellers and multiple buyers. Potential buyers submit their bids and potential sellers submit their ask prices to the market institution, and then the market institution chooses some price p that clears the market: all the sellers who asked less than p sell and all buyers who bid more than p buy at this price p. Buyers and sellers that bid or ask for exactly p are also included. A common example of a double auction is stock exchange.
The Myerson–Satterthwaite theorem is an important result in mechanism design and the economics of asymmetric information, and named for Roger Myerson and Mark Satterthwaite. Informally, the result says that there is no efficient way for two parties to trade a good when they each have secret and probabilistically varying valuations for it, without the risk of forcing one party to trade at a loss.
Auction theory is an applied branch of economics which deals with how bidders act in auction markets and researches how the features of auction markets incentivise predictable outcomes. Auction theory is a tool used to inform the design of real-world auctions. Sellers use auction theory to raise higher revenues while allowing buyers to procure at a lower cost. The conference of the price between the buyer and seller is an economic equilibrium. Auction theorists design rules for auctions to address issues which can lead to market failure. The design of these rulesets encourages optimal bidding strategies among a variety of informational settings. The 2020 Nobel Prize for Economics was awarded to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats.”
Statistical finance, is the application of econophysics to financial markets. Instead of the normative roots of finance, it uses a positivist framework. It includes exemplars from statistical physics with an emphasis on emergent or collective properties of financial markets. Empirically observed stylized facts are the starting point for this approach to understanding financial markets.
Paul David Klemperer FBA is an economist and the Edgeworth Professor of Economics at the Department of Economics, Oxford University. He is a member of the Klemperer family. He works on industrial economics, competition policy, auction theory, and climate change economics and policy.
Artyom Shneyerov is a microeconomist working at Concordia University in Montreal, Quebec, Canada. He is also an associate editor of the International Journal of Industrial Organization. His current research is in the fields of game theory, industrial organization and applied econometrics. His contributions to these and other areas of economics include the following:
Rachel E. Kranton is an American economist and James B. Duke Professor of Economics at Duke University. She is a member of the National Academy of Sciences, the American Academy of Arts & Science, Fellow of the Econometric Society, and 2010 recipient of the Blaise Pascal Chair. She was elected to serve on the Executive Committee of the American Economic Association from 2015 to 2018. Kranton's research focuses on how social institutions affect economic outcomes, and has applications in a variety of fields within economics, such as economic development, international economics, and industrial organization.
Monetary circuit theory is a heterodox theory of monetary economics, particularly money creation, often associated with the post-Keynesian school. It holds that money is created endogenously by the banking sector, rather than exogenously by central bank lending; it is a theory of endogenous money. It is also called circuitism and the circulation approach.
Sequential bargaining is a structured form of bargaining between two participants, in which the participants take turns in making offers. Initially, person #1 has the right to make an offer to person #2. If person #2 accepts the offer, then an agreement is reached and the process ends. If person #2 rejects the offer, then the participants switch turns, and now it is the turn of person #2 to make an offer. The people keep switching turns until either an agreement is reached, or the process ends with a disagreement due to a certain end condition. Several end conditions are common, for example:
Tiziana Di Matteo is a Professor of Econophysics at King's College London. She studies complex systems, such as financial markets, and complex materials. She serves on the council of the Complex Systems Society.
In mechanism design, a branch of economics, a weakly-budget-balanced (WBB) mechanism is a mechanism in which the total payment made by the participants is at least 0. This means that the mechanism operator does not incur a deficit, i.e., does not have to subsidize the market. Weak budget balance is considered a necessary requirement for the economic feasibility of a mechanism. A strongly-budget-balanced (SBB) mechanism is a mechanism in which the total payment made by the participants is exactly 0. This means that all payments are made among the participants - the mechanism has neither a deficit nor a surplus. The term budget-balanced mechanism is sometimes used as a shorthand for WBB, and sometimes as a shorthand for SBB.
References
- ↑ Bramoullé, Yann; Kranton, Rachel (1 July 2007). "Public goods in networks". Journal of Economic Theory . 135 (1): 478–494. doi:10.1016/j.jet.2006.06.006.
- 1 2 3 Jackson, Matthew O. (2008). Social and economic networks. Princeton, NJ: Princeton University Press. ISBN 978-0-691-14820-5.
- ↑ Goyal, Sanjeev; van der Leij, Marco J.; Moraga‐González, José Luis (April 2006). "Economics: An Emerging Small World". Journal of Political Economy . 114 (2): 403–412. doi:10.1086/500990. S2CID 11390706.
- ↑ Cook, Karen S.; Emerson, Richard M. (October 1978). "Power, Equity and Commitment in Exchange Networks". American Sociological Review . 43 (5): 721–739. doi:10.2307/2094546. JSTOR 2094546.
- ↑ Corominas-Bosch, Margarida (2004). "One Two-Sided Network Markets". Journal of Economic Theory . 115: 35–77. doi:10.1016/s0022-0531(03)00110-8.
- ↑ Kranton, Rachel E.; Minehart, Deborah F. (June 2001). "A Theory of Buyer-Seller Networks". American Economic Review . 91 (3): 485–508. CiteSeerX 10.1.1.126.7772 . doi:10.1257/aer.91.3.485.
- ↑ Kranton, Rachel E. (September 1996). "Reciprocal Exchange: A Self-Sustaining System". American Economic Review. 86 (4): 830–851. JSTOR 2118307.
{{cite journal}}: CS1 maint: date and year (link) - ↑ Souma, Wataru; Fujiwara, Yoshi; Aoyama, Hideaki (2003). "Complex networks and economics". Physica A. 324 (1–2): 396–401. Bibcode:2003PhyA..324..396S. doi:10.1016/s0378-4371(02)01858-7.
- ↑ Soramaki, Kimmo; Bech, Morten L.; Arnold, Jeffrey; Glass, Robert J.; Beyeler, Walter E. (June 2007). "The topology of interbank payment flows". Physica A. 379 (1): 317–333. Bibcode:2007PhyA..379..317S. doi:10.1016/j.physa.2006.11.093. hdl: 10419/60649 .
- ↑ Li, Xiang; Jin, Yu Ying; Chen, Guanrong (October 2003). "Complexity and synchronization of the World Trade Web". Physica A. 328 (1–2): 287–296. Bibcode:2003PhyA..328..287L. doi:10.1016/S0378-4371(03)00567-3.