A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.
In economics and related disciplines, a transaction cost is a cost in making any economic trade when participating in a market. The idea that transactions form the basis of economic thinking was introduced by the institutional economist John R. Commons in 1931, and Oliver E. Williamson's Transaction Cost Economics article, published in 2008, popularized the concept of transaction costs. Douglass C. North argues that institutions, understood as the set of rules in a society, are key in the determination of transaction costs. In this sense, institutions that facilitate low transaction costs, boost economic growth.
Loss aversion is a psychological and economic concept which refers to how outcomes are interpreted as gains and losses where losses are subject to more sensitivity in people's responses compared to equivalent gains acquired. Kahneman and Tversky (1992) have suggested that losses can be twice as powerful, psychologically, as gains. When defined in terms of the utility function shape as in the Cumulative Prospect Theory (CPT), losses have a steeper utility than gains, thus being more "painful" than the satisfaction from a comparable gain as shown in Figure 1. Loss aversion was first proposed by Amos Tversky and Daniel Kahneman as an important framework for Prospect Theory - an analysis of decision under risk.
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.
Democratic capitalism, also referred to as market democracy, is a political and economic system. It integrates resource allocation by marginal productivity, with policies of resource allocation by social entitlement. The policies which characterise the system are enacted by democratic governments.
Trust is the willingness of one party to become vulnerable to another party on the presumption that the trustee will act in ways that benefit the trustor. In addition, the trustor does not have control over the actions of the trustee. Scholars distinguish between generalized trust, which is the extension of trust to a relatively large circle of unfamiliar others, and particularized trust, which is contingent on a specific situation or a specific relationship.
The theory of the firm consists of a number of economic theories that explain and predict the nature of the firm, company, or corporation, including its existence, behaviour, structure, and relationship to the market. Firms are key drivers in economics, providing goods and services in return for monetary payments and rewards. Organisational structure, incentives, employee productivity, and information all influence the successful operation of a firm in the economy and within itself. As such major economic theories such as Transaction cost theory, Managerial economics and Behavioural theory of the firm will allow for an in-depth analysis on various firm and management types.
Commons-based peer production (CBPP) is a term coined by Harvard Law School professor Yochai Benkler. It describes a model of socio-economic production in which large numbers of people work cooperatively; usually over the Internet. Commons-based projects generally have less rigid hierarchical structures than those under more traditional business models.
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.
Individual fishing quotas (IFQs), also known as "individual transferable quotas" (ITQs), are one kind of catch share, a means by which many governments regulate fishing. The regulator sets a species-specific total allowable catch (TAC), typically by weight and for a given time period. A dedicated portion of the TAC, called quota shares, is then allocated to individuals. Quotas can typically be bought, sold and leased, a feature called transferability. As of 2008, 148 major fisheries around the world had adopted some variant of this approach, along with approximately 100 smaller fisheries in individual countries. Approximately 10% of the marine harvest was managed by ITQs as of 2008. The first countries to adopt individual fishing quotas were the Netherlands, Iceland and Canada in the late 1970s, and the most recent is the United States Scallop General Category IFQ Program in 2010. The first country to adopt individual transferable quotas as a national policy was New Zealand in 1986.
Macromarketing is an interdisciplinary field that studies marketing as a provisioning technology of society. It focuses on marketing-society interactions including such topics as marketing systems, aggregate consumer behavior, market regulation, social responsibility, justice and ethics in markets, and sustainable marketing. By comparison, "micromarketing" deals with how firms decide what to make, how to market it, and how much to price it. Some of key topics include the tragedy of the commons, subliminal advertising, market symbolism and environmental sustainability. The notion of "marketing systems" is at the heart of macromarketing thought.
Alvin Eliot Roth is an American academic. He is the Craig and Susan McCaw professor of economics at Stanford University and the Gund professor of economics and business administration emeritus at Harvard University. He was President of the American Economic Association in 2017.
Economics of participation is an umbrella term spanning the economic analysis of worker cooperatives, labor-managed firms, profit sharing, gain sharing, employee ownership, employee stock ownership plans, works councils, codetermination, and other mechanisms which employees use to participate in their firm's decision making and financial results.
Chrematistics, or the study of wealth or a particular theory of wealth as measured in money, has historically had varying levels of acceptability in Western culture. This article will summarize historical trends.
A reverse auction is a type of auction in which the traditional roles of buyer and seller are reversed. Thus, there is one buyer and many potential sellers. In an ordinary auction also known as a forward auction, buyers compete to obtain goods or services by offering increasingly higher prices. In contrast, in a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid each other.
Islamic marketing is a process of attempting to sell a product or service to customers and other stakeholders while keeping this process in accord with the principles of Islamic transaction. This includes maintaining halal for the products or services being marketed.
Rainbow capitalism is the involvement of capitalism, corporatism, and consumerism in appropriating and profiting from the LGBT movement. It developed in the 20th and 21st centuries as the LGBT community became more accepted in society and developed sufficient purchasing power, known as pink money. Early rainbow capitalism was limited to gay bars and gay bathhouses, though it expanded to most industries by the early-21st century.
Quadratic voting is a collective decision-making procedure which involves individuals allocating votes to express the degree of their preferences, rather than just the direction of their preferences. By doing so, quadratic voting seeks to address issues of the Condorcet paradox and majority rule. Quadratic voting works by allowing users to "pay" for additional votes on a given matter to express their support for given issues more strongly, resulting in voting outcomes that are aligned with the highest willingness to pay outcome, rather than just the outcome preferred by the majority regardless of the intensity of individual preferences. The payment for votes may be through either artificial or real currencies. Quadratic voting is a variant of cumulative voting. It differs from cumulative voting by altering "the cost" and "the vote" relation from linear to quadratic.
Yeon-Koo Che is a Korean American economist. He is the Kelvin J. Lancaster Professor of Economic Theory at Columbia University, a position he held since 2009. Prior to joining Columbia in 2005, he was a professor at University of Wisconsin-Madison.
A digital platform is a software-based online infrastructure that facilitates interactions and transactions between users.
