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number of items: 20
total items: 2605
item list element: Price Discrimination
item list element: Covid-19 and the Seizure of Power
item list element: Edgeworth Box
item list element: Cobb-Douglas Production Function
item list element: The best video games for economists
item list element: How best to study at home
item list element: The Case for Wealth Taxation
item list element: Top fiction books for economists
item list element: What Impact Has the Coronavirus Had on Higher Education?
item list element: The Case to End Fossil Fuel Subsidies
item list element: INOMICS unveils its A-Z of economics terms
item list element: Utility Maximization
item list element: Pareto Efficiency
item list element: Marginal Utility
item list element: Prisoner's Dilemma
item list element: Monopoly
item list element: Top Economics Think Tanks and Research Institutes in the US
item list element: How to Apply for a Master’s Scholarship
item list element: Market Equilibrium
item list element: Nash Equilibrium
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Price Discrimination
type: CreativeWork
title: Price Discrimination
description: If and how a firm can successfully price discriminate depends crucially on the information that the firm has about its customers and on the possibilities of the consumers to engage in arbitrage. Note that it is not price discrimination if price differences reflect differences in the costs of serving those consumers. Price discrimination is usually studied in a monopoly, though oligopolies and even regular markets often exhibit price discrimination as well. We distinguish between three different types of price discrimination: First degree price discrimination First degree price discrimination is also called perfect price discrimination. From the perspective of the firm this type of price discrimination yields the highest possible profit. To perform first degree price discrimination the monopolist needs to know the exact willingness-to-pay or demand function of each of its consumers and it has to be able to perfectly distinguish the customers from each other (i.e. no customer can lie about his true willingness-to-pay). If these conditions are true, the monopolist can charge each consumer exactly their maximum willingness-to-pay for the good. Remember from the demand curve that each consumer has a different willingness to pay, or preference, for goods. Clearly, if the monopolist charges every consumer their exact willingness-to-pay, individual consumers will be worse off than without price discrimination because consumer surplus in this case is zero. That is, by perfectly price discriminating, the monopolist captures the entire surplus. But, this is still a Pareto efficient outcome even though consumers are worse off individually. The quantity exchanged will be the same as in perfect competition which means that there is no efficiency loss or deadweight loss if a monopolist can perfectly price discriminate. Certain consumers end up paying more than they would have under perfect competition, and the surplus they would have enjoyed goes to the monopolist instead. But, to…
disambiguating description: Price discrimination is a pricing strategy in which firms charge different prices for the same physical good or service to different consumers or to the same consumer. By doing so, firms can increase their profits compared to selling each unit of the good at the same price.
date posted: 2020-04-28T11:32:52Z
date modified: 2023-04-05T14:51:34Z
language: en
keywords: Mirjam Sarah Salish
keywords: Price Discrimination
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: financialeconomics
disciplines: socialscience
disciplines: laweconomics
disciplines: businesseconomics
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Financial Economics (JEL G)
discipline labels: Economics and Social Sciences
discipline labels: Law and Economics (JEL K)
discipline labels: Business Economics (JEL M)

Covid-19 and the Seizure of Power
type: Article
title: Covid-19 and the Seizure of Power
description: But are we too generous with our trust? Recent developments in places as far-flung as Hungary and the Philippines remind us that there’s a second history, running parallel to improving approval ratings, of governments using crises to enhance and consolidate their power. It’s a darker history, and one we would do well learning from. Alas, there are concerning signs it’s set to repeat itself. Tailored to tyrants In many ways, the current moment is primed for exploitation. If health systems are to withstand COVID-19, it’s essential that strict restrictions are placed on public life, civil liberties reduced, and, to enforce it all, state power extended. In concert, this is music to the authoritarian’s ear; a description of an idealised society. It's a world in which power-grabs can be carried out publicly, legitimised by rousing cries of unity, and all anxious voices comforted by the knowledge that everything is in the ‘national interest’. It's, above all, an opportunity. Indeed, short of war, no other emergency comes close to matching the ubiquity of COVID-19’s fallout. Consider, for example, terrorism. Terrorist attacks can scar populations and cause great economic damage, but in scale, they pale in comparison. They tend only to hit a contained area which limits the economic impact, and, despite being designed to scare, the panic created is also less widespread. A pandemic, on the other hand, knows no boundaries, equalising the terror and economic damage it wreaks, the village dweller suffering in similar ways to the city-based socialite. And this is key: while fearing for health or financial well-being, people are at their most compliant, their most likely to surrender their freedom. What further sets COVID-19 apart is that the consensus response is to stay indoors. In other emergencies - during war, after a natural disaster, or following a terrorist attack - agency can be claimed by citizens, armies can be joined, humanitarian aid contributed, or marches defiantly a…
disambiguating description: As the world is ravaged by COVID-19, governments everywhere are enjoying burgeoning support. A glance at approval ratings finds presidents, prime ministers, even autocrats, overwhelmingly popular, in some instances irrespective of their actual performance. Of course, this is unsurprising: there’s long been a history of populations coalescing around established leaders in times of crisis. Amid uncertainty, we find their increased visibility reassuring. Speaking to the nation they look competent and confident; we feel inclined to trust them, and more often than not, we do.
date posted: 2020-04-20T13:04:58Z
date modified: 2026-07-07T10:05:02Z
employment type: onsite
language: en
keywords: government
keywords: William Pearse
keywords: coronavirus
keywords: covid-19
type: blog
disciplines: politics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: socialscience
disciplines: economicdevelopmentgrowth
disciplines: healtheducationwelfareeconomics
discipline labels: Politics
discipline labels: Public Economics & Economic Policy (JEL H)
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Economic Development, Innovation and Growth (JEL O)
discipline labels: Health, Education, and Welfare (JEL I)

Edgeworth Box
type: CreativeWork
title: Edgeworth Box
description: The advantage of depicting an economy in this way is to allow comparisons of different allocations and to determine their relative efficiency. Consider the following example of an economy with two individuals, Adam and Eve, and two items, dates and milk. The total number of dates in the economy is represented by the horizontal length of the box; the total amount of milk is measured by its vertical length. In the bottom-left corner \(o\), Adam has nothing while Eve owns/consumes all of the dates and milk. In the opposite top-right corner \(o'\), Adam possesses everything in the economy while Eve has nothing. The indifference curves \(A_{1}\), \(A_{2}\) and \(A_{3}\) represent Adam’s preferences over dates and milk, with higher utility on \(A_{3}\) than \(A_{1}\); analogously, indifference curves \(E_{1}\), \(E_{2}\) and \(E_{3}\) represent Eve’s preferences over dates and milk, with higher utility on \(E_{3}\) than \(E_{1}\). Figure 1: Edgeworth Box example The points \(X_{1}\), \(X_{2}\) and \(X_{3}\) show three different allocations of dates and milk between Adam and Eve. At \(X_{1}\) Adam is on his indifference curve \(A_{1}\) while Eve is on her indifference curve \(E_{3}\). However this allocation is not Pareto-efficient because both Adam and Eve could be made better off (achieve higher utility) with another allocation anywhere within the grey shaded area bounded by indifference curves \(A_{1}\) and \(E_{3}\). In contrast, the allocation at \(X_{3}\) where indifference curves \(A_{3}\) and \(E_{1}\) touch tangentially is Pareto-efficient because neither Adam nor Eve can achieve higher utility through a different allocation without reducing the other’s utility. Note however that at \(X_{3}\) Adam has significantly more dates and milk than Eve while the converse is true at \(X_{1}\). The fact that \(X_{3}\) is an efficient allocation says nothing about its fairness. Indeed, a point closer to the middle of the Edgeworth box, such as the allocation at \(X_{2}\), may…
disambiguating description: An Edgeworth box (named after Irish philosopher and economist Francis Ysidro Edgeworth, 1881) is a two-dimensional representation of a simple, closed economy consisting of two individuals and two items (or resources) that are finite in supply. Any feasible allocation of the items between the individuals is included as a dot in the box; the individuals’ preferences over the items are represented through indifference curves.
date posted: 2020-04-21T07:14:21Z
date modified: 2026-06-29T08:37:22Z
employment type: onsite
language: en
keywords: Edgeworth box
keywords: Tom McKenzie
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: socialscience
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Economics and Social Sciences

Cobb-Douglas Production Function
type: CreativeWork
title: Cobb-Douglas Production Function
description: The application of this functional form in measuring production is owed to the mathematician Charles Cobb and the economist Paul Douglas, after whom it is named. They originally used it to consider the relative importance of the two main input factors, labor and capital, in manufacturing output in the USA from 1899 to 1922. The general form of a Cobb-Douglas production function for a set of \(n\) inputs is \[Y=f\left(x_{1},x_{2},...,x_{n}\right)=\gamma\prod^{n}_{i=1}x^{\alpha_{i}}_{i}\] In this formula \(Y\) stands for output (as measured by, for example, GDP), and \(x_{i}\) for input \(i\). Meanwhile \(\gamma\) and \(\alpha_{i}\) are parameters determining the overall efficiency of production and how output responds to changes in the input quantities. In their original model, Cobb and Douglas restrict the output-elasticity parameters \(\alpha_{1}\) and \(\alpha_{2}\) to the range \(\alpha_{i}\in\left(0,1\right)\) and to sum to one, which implies constant returns to scale. Reading the above equation might be challenging for new students of economics. For help interpreting economic formulae, see the linked article “A quick guide to math symbols in economics”. Reading this equation is straightforward once the symbols are all identified; the Cobb-Douglas function is the product of multiple xi (specifically n of these xi), each raised to the αi power, and the resulting product is multiplied by the parameter 𝛾. Applying Cobb and Douglas’s model to the production of a two-factor economy (using inputs x1 and x2) simplifies the above expression. The resulting function becomes \[Y=\gamma x^{\alpha_{1}}_{1}x^{1-\alpha_{1}}_{2}\] where \(x_{1}\) and \(x_{2}\) stand for labor and capital, respectively. Note that the two exponents simplify to α1 and (1 - α1) because Cobb and Douglas assumed they must add to one (again, showing constant returns to scale). Another common representation of this formula that macroeconomics students may see is: \begin{equation*}\mathit{Y} = \mathit{A…
disambiguating description: A Cobb-Douglas production function models the relationship between output and production inputs (also known as factor inputs). It is used to calculate ratios of inputs to one another for efficient production, and to estimate technological change in production methods. It’s a commonly used economic model that is very flexible, and as such is often one of the first models students of macroeconomics will learn (though it’s also used in microeconomics, too).
date posted: 2020-04-15T12:24:46Z
date modified: 2026-06-25T11:55:58Z
employment type: onsite
language: en
keywords: Cobb-Douglas Production Function
keywords: Tom McKenzie
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: macroeconomicsmonetary
disciplines: socialscience
disciplines: econometricsstatisticsquantitative
disciplines: economicthoughtmethodology
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Macroeconomics and Monetary Economics (JEL E)
discipline labels: Economics and Social Sciences
discipline labels: Econometrics, Statistics and Quantitative Methods (JEL C)
discipline labels: Economic Thought & Methodology (JEL B)

The best video games for economists
type: Article
title: The best video games for economists
description: INOMICS is a member of the Amazon Associates affiliate program and the Apple affiliate program. This article contains affiliate links, which means we may earn money through any qualifying purchases made after you click through. However, this is not a sponsored post. Business Simulators 1. Capitalism This classic business simulation game and its well-reviewed sequel Capitalism II allow you to live out your wildest dream: running the most successful business in the world. As CEO, you’ll have to avoid bankruptcy, fight off competition, and make sure you don’t get bought out. But don’t expect this journey to be easy - Capitalism has been ranked as one of the most difficult games ever. While the game’s beginning is not the most realistic for most of us - you can start your journey with capital of two hundred million dollars if you want - it offers an insight into how one could start a new company, providing semi-real simulations of markets and the cutthroat world of business. At the game’s outset, you can either start totally from scratch or "inherit" a business such as an agricultural company. Typically, your goal will be to dominate a certain percentage of market share within a certain time period. An expansion named Capitalism Plus released in 1996, introduced random events such as riots and technological breakthroughs, making the already-complicated game even more difficult to play. So have fun failing at your first business - thankfully, at no risk whatsoever. 2. Virtonomics Virtonomics an economics video game that is used in schools and on university campuses to help students learn the ins and outs of business markets. Both entertaining and educational, this massively multiplayer online game is similar to Capitalism in that it simulates the processes of building a business in a competitive environment. With totally open-ended gameplay and the ability to play forever if you want to (though we don’t necessarily recommend that), the turn-based game allows players to c…
disambiguating description: So you’ve decided it’s time to take a break from all the hard studying you’re doing during your economics Master’s or PhD program. Why not spend time playing a video game which will help you accrue business acumen, improve your real-world economics knowledge, or reflect economics concepts in its gameplay? Sound too good to be true? Thankfully, there are some games which offer just that.
date posted: 2020-04-08T13:33:29Z
date modified: 2026-07-07T10:06:11Z
employment type: onsite
language: en
keywords: James Matthew Alston
keywords: economics video games
keywords: learn
keywords: games
keywords: Sean McClung
keywords: video games
type: blog
disciplines: economics
disciplines: socialscience
disciplines: business
disciplines: management
disciplines: generaleconomics
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Business
discipline labels: Management
discipline labels: General Economics (JEL A)

How best to study at home
type: Article
title: How best to study at home
description: Picture the scenario. You begin the day rolling out of bed in the afternoon, throwing on some casualwear, saying to yourself “today I will finish that, read this and write up this”. Three hours later, however, what has happened? Social media is updated with your latest thoughts, the coffee cup has been refilled twice, and the dusty bookshelf has been reorganised colour coded. Staring out the window with an empty notebook, you ask yourself, ‘where did I go wrong’? Don’t worry - we’ve all been there. Follow this step by step guide, and you’ll be a star study-at-home student in no time! Check out our Advice section for more helpful tips for economists 1. Start good routines It’s super important to set yourself a time to wake up, eat a healthy breakfast and start to study. It’s tempting to wear pyjamas all day if you’re not leaving the house for anything except to pick up emergency Oreos. But you’ll feel much better if you take care of yourself with a normal clean-cut routine at home. Shower, get dressed, brush your hair and you’ll feel a million times more motivated every day. Easy. Studying from home also gives you the opportunity to work whenever you want. Every student has their own peak time when they concentrate best. Some people are night owls, while most are early birds. Make the routine work for you, pick when you are most productive, and work when your brain is most alert, so that you’re able to process and retain the information you are studying. 2. Study space The bed is not the best option. It may beckon you with comfy pillows, but rest assured, it never works out. Reading flashcards from the duvet isn’t going to associate the space with the right activity. Sitting at a table in a good chair can make or break your productivity. How can you stay focused on that tough statistics problem if you’re distracted by your aching back? Working in bed promotes bad posture, which not only decreases concentration but can also give you back pain in the long term. Pick a …
disambiguating description: With the coronavirus making studying from home the new norm, it’s imperative we look beyond the frustrations of no longer having face-to-face contact and find a routine to keep our brains alert, and educational progress on track. Yes, it’s a difficult time, but INOMICS is here to help.
date posted: 2020-03-30T14:18:33Z
date modified: 2026-07-06T14:01:26Z
employment type: onsite
language: en
keywords: study from home
keywords: home studying
keywords: corona
type: advice
disciplines: economics
disciplines: socialscience
disciplines: business
disciplines: management
disciplines: generaleconomics
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Business
discipline labels: Management
discipline labels: General Economics (JEL A)

The Case for Wealth Taxation
type: Article
title: The Case for Wealth Taxation
description: Whether America will see a wealth tax in the foreseeable future is moot - certainly, vested interests will leave no stone unturned in its attempt to thwart it. Nevertheless, it’s now part of the conversation, and its growing popularity among the public suggests it’s here to stay. But why now? How do we explain the ‘resurgence of interest in tax policy research’ that wealth taxation proposals have helped spark, and the American Economic Association (AEA) has so excitedly observed? Gaining popularity In many ways, its popularisation is surprising in how slow it’s been, for extreme wealth inequality, which it explicitly targets, has long been a sad fact of American life - and current trends offer little reason for future optimism. Over a decade ago, President Obama described it as ‘the defining challenge of our time’, hoping, implicitly, that his tackling of it would become his defining success. Despite these aspirations his administration did little to affect the underlying economic factors that contributed to its spread. That’s not to say no progress was made; it's rather to recognise that tweaking income tax rates and gently increasing tax subsidies for low-wage workers, while praiseworthy, were insufficient to reverse the effects of decades of regressive tax policies and deregulation. Consider: between 1995 and 2016 the net worth of the top one percent almost tripled, the middle class’s barely budged, and the bottom ten percent - those most vulnerable - saw theirs shrink. Clearly, the social mobility that Americans hold so dear, and upon which their collective sense of self rests, has ground to a halt - and conservative adjustments to taxation have failed to reanimate it. Wealth taxation presents a bolder approach; it's found appeal for that reason. <11an>limit:2;categories:jobs|courses|programs;disciplines:Financial Economics (JEL G)|Public Economics & Economic Policy (JEL H)</11an> Its champions Building on the work of Thomas Piketty, who catapulted the idea of w…
disambiguating description: The emergence of Joe Biden as the unassailable front-runner in the Democratic Primary belies a contest that at various turns broke new ground. From its unprecedented field, larger and more representative than ever (save the brief participation of two billionaires), to the remarkable resuscitation of one moribund campaign, the departure from custom was clear. Nowhere was this more obvious than in policy, where the inclusion of senators, Elizabeth Warren and Bernie Sanders, dragged the conversation leftwards into distinctly uncharted territory. While all candidates acknowledged America’s extreme inequality and the need for better healthcare, social security, etc., divergence came in the prescribed means of redistribution, and unusually discussion extended beyond familiar calls to raise income tax for the rich. Most liberal of the proposals was a wealth tax: an annual tax on everything an individual owns. Its mere suggestion confirmed an improbable rise of a policy that until recently was dismissed as fringe and anti-aspirational.
date posted: 2020-03-25T13:37:13Z
date modified: 2026-07-07T10:07:05Z
employment type: onsite
language: en
keywords: inequality
keywords: William Pearse
keywords: wealth tax
keywords: taxation
type: blog
disciplines: politics
disciplines: microeconomics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: socialscience
disciplines: healtheducationwelfareeconomics
discipline labels: Politics
discipline labels: Microeconomics (JEL D)
discipline labels: Public Economics & Economic Policy (JEL H)
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Health, Education, and Welfare (JEL I)

Top fiction books for economists
type: Article
title: Top fiction books for economists
description: Fiction might not be the first place you turn to to get your hit of economics, but it can be surprisingly revealing, especially in helping one consider how economics overlaps with other issues in the real world, like politics, family, technology, and ideology. And what better way to spend your time while in coronavirus isolation than reading a load of great fiction from the world's most famous authors, and getting your daily dose of economics to boot? Check out our Advice section for more helpful tips for economists INOMICS and our parent company 11 Academia Networks are Amazon Associates, meaning we are a part of their affiliate program. This article contains affiliate links, which means we may earn money through any qualifying purchases made after you click through. However, this is not a sponsored post. 1. Jane Austen - Pride and Prejudice Forward-thinking for its time and still with enough humour to keep it entertaining today, Austen’s classic weighed up the economic pressures of nineteenth-century society against the importance of marrying for love. Its opening line, since extremely famous (‘It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife’), sets up the plot for the rest of the book: that Mr Bennet must marry off one of his five daughters in order that his inheritance be passed on to his children, helping them avoid destitution. Economists will appreciate the importance money plays in the novel, as well as the touching moral that love should and will overcome all. 2. George Orwell - Keep the Aspidistra Flying Orwell’s searing critique of the middle- and upper-classes, and treatise on socialism and its many hypocritical followers holds weight to the present day. Keep the Aspidistra Flying catalogues the woes of a man failing to rebel against a monetary culture that seems to suck in all around him. Based on Orwell’s own experiences of working in bookshops and purposefully living on the streets t…
disambiguating description: There are plenty of books which are important for economists to read in the non-fiction department, from the very popular to the extremely academic. But what of fiction books - novels, plays, and the like? It's important not to forget that even stories which aren't 'true' in the dictionary definition sense of the word can tell us a lot about the realities of the world.
date posted: 2020-03-23T14:00:16Z
date modified: 2026-07-06T14:02:24Z
employment type: onsite
language: en
keywords: James Matthew Alston
keywords: books
keywords: fiction
keywords: economics books
type: advice
disciplines: economics
disciplines: socialscience
disciplines: business
disciplines: management
disciplines: generaleconomics
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Business
discipline labels: Management
discipline labels: General Economics (JEL A)

What Impact Has the Coronavirus Had on Higher Education?
type: Article
title: What Impact Has the Coronavirus Had on Higher Education?
description: Similarly, universities have begun shutting up shop, not willing to risk large swathes of students being affected by the virus. So what does this mean for students who are unable to study, and what are some of the potential workarounds? Universities close their doors Across many countries, universities and importantly their libraries have been shut down. In Berlin, for example, all Freie Universität libraries shut down officially on the 16/03/20 for an indeterminate period, some having already closed during the week before. In Italy, universities have already been closed for some time, as have major universities in the USA. It is surely only a matter of time before this happens broadly across most of the world, assuming the virus isn’t brought under control soon. Currently, many universities are on study break, meaning a few weeks during which there are no seminars, lectures or tutorials, allowing students to write their essays or do exams. With libraries shut, leaving students unable to find the research materials they need, deadlines for essays and exams will have to be pushed back to allow time for these students to still do their research. Moreover, with universities closed, many students who need to speak to their professors and tutors for help with their essays won’t be able to, at least, not in person! This causes problems for students who need to talk through their ideas with their supervisors, like, for example, those writing Bachelor’s or Master’s theses. With nobody to turn to for advice, many will cease to write until they are able to talk to the people advising them on their chosen topic. The economics of the virus There is an economic impact of the coronavirus on institutions, too. At the beginning of February when Australia began closing its borders, many Chinese students had gone back to their home country for the semester break, which over this period lasts around three months. Due to the travel ban that was put in place, many of these students were…
disambiguating description: As the spread of the coronavirus continues across the world, many questions remain unanswered, not least what is going to happen to those thousands of students whose universities have also been affected by the pandemic. Schools, offices, museums, restaurants and bars are being closed across the world, and curfews are in place in particularly affected countries.
date posted: 2020-03-17T12:48:50Z
date modified: 2026-07-07T10:08:15Z
employment type: onsite
language: en
keywords: study online
keywords: James Matthew Alston
keywords: study abroad
keywords: coronavirus
keywords: coronavirus covid-19
type: blog
disciplines: economics
disciplines: socialscience
disciplines: business
disciplines: management
disciplines: healtheducationwelfareeconomics
disciplines: generaleconomics
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Business
discipline labels: Management
discipline labels: Health, Education, and Welfare (JEL I)
discipline labels: General Economics (JEL A)

The Case to End Fossil Fuel Subsidies
type: Article
title: The Case to End Fossil Fuel Subsidies
description: The empty promises began in 1997 when the Kyoto Protocol demanded governments stop subsidizing all ‘greenhouse-gas-emitting sectors’. Posturing world leaders dutifully queued up to pay lip service, establishing a now familiar tradition. While attending various climate summits, each would (re)commit to the eradication of fossil fuel subsidies, implore others to follow suit, and then, as if nice sounding words were all it took to cleanse the world of greenhouse gases, return home and do nothing. President Obama claimed in 2012 that a hundred years of subsidies to the oil companies was over - he lied. In 2020, annual global subsidies to the fossil fuel industry were estimated at $500 billion, and following a blip between 2013-16, are on the rise again. But why? How did governments, whose raison d'être is to keep their citizens safe, come to prop up an industry that puts lives at risk? And how great a threat does it pose? It began so well... Once upon a time it actually made sense. Indeed, when fossil fuel subsidies were first implemented they were endorsed by progressives for their equalising influence. Whether direct financial transfer, preferential tax treatment, or government infrastructure spending, it didn’t matter, they did what all subsidies do: reduced prices, in this case, the price of energy. By doing so, they gave those mired in poverty access to electricity, heating, and ultimately the components needed for a dignified life. There was also the added benefit of securing national energy supplies, as supporting indigenous production reduces dependency on foreign imports, which cannot always be guaranteed. Securing the energy supply was securing the country’s future - another easy sell. Noble-sounding as these justifications may be, the refining of green technologies mean they hold diminishing credibility, especially in the developed world where 80% of all historical carbon emissions have been emitted. A recent report by the International Renewable Energy Agenc…
disambiguating description: The continued existence of fossil fuel subsidies in a time of their almost universal condemnation reveals something about the governments that rule us, something pernicious, but also something all-too-predictable. Like no other area, they expose a gulf between rhetoric and action, a disconnect so stark that, if the risks it posed were less catastrophic, would almost be comical. Back in reality, though, the cognitive dissonance, cynicism, or whatever its cause, serves only to warm our planet and threaten all life.
date posted: 2020-03-16T14:35:12Z
date modified: 2026-07-07T10:10:08Z
employment type: onsite
language: en
keywords: fossil fuels
keywords: economics
keywords: William Pearse
keywords: environmental economics
keywords: green energy
type: blog
disciplines: politics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: macroeconomicsmonetary
disciplines: socialscience
disciplines: agriculturalenvironmentaleconomics
disciplines: industrialorganization
discipline labels: Politics
discipline labels: Public Economics & Economic Policy (JEL H)
discipline labels: Economics
discipline labels: Macroeconomics and Monetary Economics (JEL E)
discipline labels: Economics and Social Sciences
discipline labels: Agricultural and Environmental Economics (JEL Q)
discipline labels: Industrial Organization (JEL L)

INOMICS unveils its A-Z of economics terms
type: Article
title: INOMICS unveils its A-Z of economics terms
description: But there’s always more we can do, and we felt the time was ripe to expand our help section to try and give even more value to young economists who are just starting out in the game. So without further ado, we’re proud to unveil our new A-Z of economics terms. Our A-Z is simple - we have professional economists write accessible but in-depth overviews of some of the most important economic terms that you will need for your studies. Starting out, we are focusing on microeconomics terms, but soon we will be expanding to macroeconomics, environmental economics, and every other type of economics you can think of. They aim to offer an insight into exactly what the term means, put it into context to make it easy to understand, and give a brief insight into where the term has been used and where you can find more academic information on the concept. First, head to inomics.com and take a glance at our header navigation. Hover your mouse of the section ‘Insights’ and you’ll see a drop down menu with the option listed ‘Economics Terms A-Z’. Give that a click and you’ll be taken to our list of all economic terms, handily listed by the first letter of the term, making it easier to find exactly what it is you’re looking for. And if you go further and click on an actual term, you’ll be able to see all the information about that term, including links through to any related definitions which we think help explain certain concepts which have been referred to. Let’s have a look at one example, adverse selection (long picture incoming): As you can see, this definition of adverse selection includes a brief, one or two sentence definition at the top, followed by a longer, more in depth definition with examples. Then some further reading is recommended which can help to expand your knowledge even more, and finally, a ‘Good to Know’ section which offers tips on how to avoid common potholes when using a term and explains some of the more tricky aspects a definition may have. Right at the bo…
disambiguating description: Here at INOMICS, we’ve always been dedicated to trying to help you, the economist (fledgling or otherwise) get the most out of your education and career. Whether that be offering you the best new courses and conferences, nudging you towards the perfect university degree, or helping you apply to jobs once you’re done studying, we’re there to give advice and present opportunities you may not have otherwise found.
date posted: 2020-03-12T14:21:51Z
date modified: 2026-07-07T12:54:52Z
employment type: onsite
language: en
keywords: James Matthew Alston
keywords: economic term
keywords: economic terms
keywords: definitions
type: advice
disciplines: economics
disciplines: socialscience
disciplines: business
disciplines: management
disciplines: generaleconomics
disciplines: economicthoughtmethodology
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Business
discipline labels: Management
discipline labels: General Economics (JEL A)
discipline labels: Economic Thought & Methodology (JEL B)

Utility Maximization
type: CreativeWork
title: Utility Maximization
description: The assumption that individuals maximize utility is a cornerstone of microeconomics. It is used as a basis to explain market behavior and to predict how people act and react in particular situations. Individuals are assumed to be perfectly rational, capable of calculating how much utility they will obtain from any combination of goods and services, and choosing a combination where utility is maximized, subject to their budget constraint. In most economic modeling, an individual’s utility is described as a continuous, monotonic, and concave function of consumption. That is, the utility function U(X), where U stands for utility and X for consumption (X can be a vector of goods and services consumed), is continuous over the space of X. Its first derivative with respect to X is positive (“more is better”) and its second derivative with respect to X negative, representing the law of diminishing marginal utility. The individual will, in most cases, be limited in consumption by their income such that spending on goods and services X cannot exceed a maximum level M. The individual’s maximization problem can be posed as \begin{gather*} \max_{X}U\left(X\right)\\ \text{s.t.: }XP\leq M \end{gather*} where P is the corresponding vector of prices for the goods and services X. Figure 1 depicts a simple two-dimensional case where the individual chooses between combinations of items X1 and X2 (item X2 might also represent “all other items” in order to study the individual’s choices of X1 compared to alternatives). The items’ prices P1 and P2 and the budget M determine the set of choices the individual can make. They could devote their entire budget to X1, purchasing QX1 at a cost of P1QX1 = M, or they could do the same for X2, purchasing QX2 at a cost of P2QX2 = M. All affordable combinations of X1 and X2 are found in the grey shaded triangle which is limited by the budget line P1X1 + P2X2 = M running between the points (QX1,0) and (0,QX2). A set of indifference curves is drawn in t…
disambiguating description: Utility in economics refers to the level of happiness or satisfaction of individuals. Individuals derive utility from the consumption of goods and services, and seek to maximize their utility under any given budget.
date posted: 2020-03-10T09:28:06Z
date modified: 2026-06-29T11:06:42Z
employment type: onsite
language: en
keywords: Utility maximisation
keywords: Tom McKenzie
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: socialscience
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Economics and Social Sciences

Pareto Efficiency
type: CreativeWork
title: Pareto Efficiency
description: An allocation of resources is Pareto efficient if it cannot be modified to increase the wellbeing of one individual without diminishing the wellbeing of any other individual. If it is possible to reallocate resources and improve the welfare of one person without harming anyone else, this reallocation is called a Pareto improvement, and consequently the initial allocation was not Pareto efficient. Sometimes we distinguish between Pareto efficiency in the allocation of resources and pareto efficiency in the production of goods and services. The concepts are very similar. Pareto efficiency in consumption (i.e., in the allocation of resources) means that no one can be made better off without making someone else worse off. Pareto efficiency in production implies that we cannot increase the production of one good (or service) without decreasing the production of another good or service. Let’s look at an example to better understand what a Pareto efficient allocation is: suppose you’re walking together with a friend along a beach when you discover two beautiful seashells laying there. You decide to keep one for yourself and give the other to your friend, so that each of you has one seashell. Is this allocation Pareto efficient? To answer this question let's consider whether we can reallocate resources to improve your welfare without harming your friend. If we want to increase your welfare, we have to give you your friend's seashell. But this means that we have to take away the seashell from them and their wellbeing will decrease. So, taking away your friend’s seashell makes them worse off and is not a Pareto improvement. Similarly, it is not a Pareto improvement if we take your seashell to give it to your friend. Given that we can not reallocate the resources in this example without making someone worse off, the initial allocation was Pareto efficient. What if instead of picking up both shells, you only pick up one and leave the other on the beach? Is this Pareto efficient…
disambiguating description: Pareto efficiency (or Pareto optimality) is an important efficiency concept in welfare economics used to evaluate or compare different allocations of resources. It is named after Italian economist Vilfredo Pareto (1848–1923).
date posted: 2020-03-09T13:06:21Z
date modified: 2023-05-31T14:05:44Z
language: en
keywords: Pareto Efficiency
keywords: Mirjam Sarah Salish
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: socialscience
disciplines: healtheducationwelfareeconomics
disciplines: economicthoughtmethodology
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Health, Education, and Welfare (JEL I)
discipline labels: Economic Thought & Methodology (JEL B)

Marginal Utility
type: CreativeWork
title: Marginal Utility
description: One of the most basic ideas in economics is that the consumption of goods and services changes our level of satisfaction or happiness (also referred to as utility). Often, we measure this change in satisfaction in monetary terms. If, for example, we want to know how much the wellbeing of a person changes if we give them a book (for free), we can simply ask this person how much he or she is willing to pay for the book. Suppose we ask a student (let´s call her Ann) what the highest price she would be willing to pay for a particular book was and her answer was €15. This means that Ann’s increase in happiness when we give her the book is the same as the increase in happiness she would experience if we gave her €15. In the special case when consumers consume just one unit of a good, the marginal utility is the same as the maximum price the consumer is willing to pay for that good. However, we do not consume just one unit of most goods and services, but several units. Some examples include the number of cups of coffee we drink each day, the number of text messages we send, the number of megabytes we stream, the liters of gasoline that we fuel our car with, and so forth. Each additional unit that we consume (e.g. each additional cup of coffee we drink) changes our wellbeing. This change in wellbeing from one unit to the next is what we call marginal utility and for many goods and services it is not constant from one unit to the next. Law of diminishing marginal utility Consuming additional units of a good or service increases our wellbeing, but the change is not necessarily the same for each unit. For instance, let's say you consume three cups of coffee. The first cup you might enjoy a lot; it wakes you up in the morning and gives you a lot of energy to help start the day. The second cup you might also enjoy, but probably a bit less than the first one. Then, the third cup might not increase our overall wellbeing at all. At this point, you feel that you’ve had enough coffee…
disambiguating description: Marginal utility in economics is the change in wellbeing (or change in total utility) that a person experiences if they consume one additional unit of a good or service.
date posted: 2020-03-09T09:21:22Z
date modified: 2023-08-21T20:15:30Z
language: en
keywords: Marginal Utility
keywords: Mirjam Sarah Salish
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: socialscience
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Economics and Social Sciences

Prisoner's Dilemma
type: CreativeWork
title: Prisoner's Dilemma
description: The story of the prisoner’s dilemma is as follows: two criminals are arrested on suspicion of having committed a crime, let's say a bank robbery. The police do not have enough evidence to convict them for the robbery, but they have smaller charges on each of the two. The prisoners are being held captive in separate cells of a prison without any possibility of communication. The general attorney offers both prisoners the same deal: if they betray their accomplice (or 'defect' as it is called in the table below) by testifying as a witness they can go free and will not have to serve any prison sentence whatsoever. However, it is not that simple. Should the other also testify, meaning that they both implicate each other, each will serve 2 years in prison. If only one testifies while the other remains silent, the one who does not testify (the silent one) will be sentenced to 4 years in prison, while the one who does testify will go free. In the case that they do not betray each other, that is, that both remain silent and cooperate, they cannot be proven guilty of the bank robbery and both will be sentenced to 1 year in prison for the minor crimes. In this two-player game, each player has two options: cooperate with their partner in crime and remain silent, or testify and betray their accomplice, i.e., defect. The prison sentences represent the payoffs of each decision and these payoffs of course depend on whether each accomplice accepts the deal offered and defects, or remains silent and cooperates. The following payoff matrix describes the possible outcomes of the game. Player 2 Cooperate Defect Player 1 Cooperate -1,-1 -4,0 Defect 0,-4 -2,-2 What is the equilibrium of this game? To answer this question, we first have to find the best responses of the two players. Suppose player 2 cooperates and remains silent. In this case the best option for player 1 is to defect and betray his partner as he would receive a sentence of 0 years, instead of the 1 year he would get if he…
disambiguating description: The prisoner's dilemma is a well-known game in non-cooperative game theory that highlights how the individually rational behaviour of 'players' can lead to an outcome that is suboptimal for all involved. It is a game that is often used to analyze the possibility of cooperation in situations where self-interested individuals interact strategically.
date posted: 2020-03-04T09:08:58Z
date modified: 2022-09-08T12:31:07Z
employment type: onsite
language: en
keywords: prisoner's dilemma
keywords: Mirjam Sarah Salish
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: socialscience
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Economics and Social Sciences

Monopoly
type: CreativeWork
title: Monopoly
description: As consumers have no alternative to the monopolist's product (except not buying) the monopolist, as opposed to a firm in perfect competition, can charge a price above marginal costs. Remember that in perfect competition there are so many buyers and sellers that no one can influence the market price, and firms have to price at marginal costs. If a firm in perfect competition decides to price above marginal costs, it will not sell anything, because the consumers have plenty of other alternatives. The lack of alternatives for the consumers in a monopolized market allows the monopolist to charge a higher price, because there will still be consumers interested in buying the good even if the price is above marginal costs. The monopoly price The monopolist is a profit-maximizing firm and will therefore charge a price that maximizes its profits given the market demand. How does the monopolist maximize profits? Profits are the difference between total revenue and total costs. When the monopoly decides how many units to sell it will compare the change in total revenue from selling one additional unit, i.e., the marginal revenue, to the increase in total costs, i.e. the marginal costs of this unit. The marginal revenue of a monopolist is lower than the market price, because to sell more units the monopolist has to reduce the price for all units. As long as the marginal revenue exceeds the marginal costs, producing one additional unit will increase total revenue more than total costs which means that the profit increases. At the unit where the marginal cost of production equals the marginal revenue from selling that unit, the monopolist will cease production. This is because beyond this point, selling more units will decrease profit. The monopolist is able to do this because it has price-setting power. In contrast, a perfectly competitive firm (which is a price-taker) produces units until its marginal cost of production equals the set market price. If a firm in a perfectly comp…
disambiguating description: A monopoly in economics describes a market in which there is only one firm and it does not face any competition. A monopolist is a firm that offers a unique product or service without close substitutes and therefore does not have any competitors. This means that the monopolist has access to the entire market demand and each customer interested in buying the product can only choose whether to buy from the monopolist at the respective price or not to buy at all.
date posted: 2020-03-04T11:41:31Z
date modified: 2026-06-29T09:52:07Z
language: en
keywords: monopoly
keywords: Mirjam Sarah Salish
type: terms
disciplines: microeconomics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: socialscience
disciplines: laweconomics
disciplines: businesseconomics
disciplines: industrialorganization
discipline labels: Microeconomics (JEL D)
discipline labels: Public Economics & Economic Policy (JEL H)
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Law and Economics (JEL K)
discipline labels: Business Economics (JEL M)
discipline labels: Industrial Organization (JEL L)

Top Economics Think Tanks and Research Institutes in the US
type: Article
title: Top Economics Think Tanks and Research Institutes in the US
description: Click here to browse our economics job listings 1. National Bureau of Economic Research (NBER) Cambridge, Massachusetts The NBER is a non-partisan organization which conducts research into all topics within economics, and disseminates its findings to academics and policy makers. They have a particular focus on quantitative methods, especially the development of statistical measures and the use of quantitative models. 2. Peter G. Peterson Institute for International Economics (IIE) Washington, District of Columbia Another non-partisan research institution, the PIIE focuses on the study of international economic policy, particularly in identifying policy approaches and practical ideas about how the forces of globalisation can be made to be beneficial for people around the world. 3. Brookings Institution Washington, District of Columbia A long-established institution which conducts research into public policy issues in the areas of economic studies, governance studies, foreign policy, metropolitan policy, and global economy and development. <11an>limit:2;categories:jobs|courses|conferences;countries:United States;disciplines:General Economics (JEL A)</11an> 4. Resources for the Future (RFF) Washington, District of Columbia An environmental policy advice organization which conducts research and analysis to provide information to help policy makers craft better policies regarding the use of natural resources and the environment. 5. Public Policy Institute of California (PPIC) San Francisco, California This California-based institution seeks to provide advice in the arena of public policy, including regarding topics such as climate change, correction and criminal justice, economy, governmental reform, health care, higher education, political engagement, and water. 6. American Enterprise Institute Washington, District of Columbia A public policy think tank which advises law makers in Washington in the areas of economics, foreign and defense policy, health care, education, …
disambiguating description: Think tanks are important institutions in the modern world. As the world becomes more globalised, think tanks which can undertake research and advocacy work at a transnational level become essential players in the global scene. Seeing as economics doesn't happen in a vacuum - each country's economic situation affects the political situation of every other country - they are also crucial to the profession (or at least, line of academic study) of most of the readers of this website. But which ones are the ones you should be following? Which think tanks conduct the most groundbreaking, critical economic research? And which one would be the best one to work for, if you ever had the chance to get your feet in the doors of such prestigious institutions? We've taken a look at the best ones in the United States, so you don't have to do the legwork yourself.
date posted: 2017-05-26T10:26:48Z
date modified: 2026-07-07T12:55:42Z
employment type: onsite
language: en
keywords: economics
keywords: top
keywords: research institutes
keywords: think tanks
type: advice
disciplines: internationaleconomics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: macroeconomicsmonetary
disciplines: socialscience
disciplines: labordemographiceconomics
disciplines: healtheducationwelfareeconomics
disciplines: agriculturalenvironmentaleconomics
disciplines: economicthoughtmethodology
discipline labels: International Economics (JEL F)
discipline labels: Public Economics & Economic Policy (JEL H)
discipline labels: Economics
discipline labels: Macroeconomics and Monetary Economics (JEL E)
discipline labels: Economics and Social Sciences
discipline labels: Labor and Demographic Economics (JEL J)
discipline labels: Health, Education, and Welfare (JEL I)
discipline labels: Agricultural and Environmental Economics (JEL Q)
discipline labels: Economic Thought & Methodology (JEL B)

How to Apply for a Master’s Scholarship
type: Article
title: How to Apply for a Master’s Scholarship
description: Applying for scholarships is different to applying for a Master’s program. We have collected the best and most relevant tips applicable to the different stages of application. 1. Research different scholarship options available Start your research early, as collecting and preparing documents can take a lot of time. It’s never a good idea to have to do everything in the last minute. Some scholarship options will match your personal situation or characteristics better. If you are interested in accessing a list of prestigious scholarships offered by top universities, feel free visit the INOMICS scholarship section. Check out postgraduate scholarship listings here 2. Check if you are eligible Checking whether you match the requirements for a specific scholarship is extremely important. You don’t want to use your time applying to a scholarship you have no chance of getting. If you are not sure whether you qualify or not, contact the scholarship sponsor. Moreover, if you can contact people who have successfully applied to the same type of scholarship, their help or input can be highly valuable. 3. Check in advance all requirements and organize your documents Checking the scholarship requirements and making a list of general/common documents required by multiple institutions will save time and make your life easier during the send-out of applications. As a general overview, the majority of scholarships require the following documents: - CV/ Personal Data - Motivation Letter/Statement of Purpose - Essay/Research Proposal/Writing Sample - Transcript of Records - Test scores (English, GRE, GMAT) - Income Statements/Tutor’s Financial Information - Letters of Recommendation - Special certificates (membership to groups) Make sure to pay attention to the specific requirements for each scholarship, such as form or length, in order to be eligible. 4. Provide relevant and accurate information Be sure you provide all information that is asked for. Missing or badly-presented informati…
disambiguating description: Everyone wants to be admitted to a top university in their favorite location. Potential reputation among employers, high quality of education and the potential boost that they can represent for a professional career make top universities the first priority of thousands of students around the world. One factor makes the decision tough, however: the potential cost it can represent for the student budget. For this reason, it is always good to look into scholarships, whether from the university itself or from a foundation.
date posted: 2014-12-01T23:00:00Z
date modified: 2026-07-07T12:57:06Z
language: en
keywords: masters programs
keywords: Scholarships
keywords: MA
keywords: ma programs
keywords: tips
type: advice
disciplines: marketing
disciplines: economics
disciplines: education
disciplines: law
disciplines: socialscience
disciplines: business
disciplines: psychology
disciplines: management
disciplines: generaleconomics
discipline labels: Marketing
discipline labels: Economics
discipline labels: Education
discipline labels: Law
discipline labels: Economics and Social Sciences
discipline labels: Business
discipline labels: Psychology
discipline labels: Management
discipline labels: General Economics (JEL A)

Market Equilibrium
type: CreativeWork
title: Market Equilibrium
description: In a market, sellers who offer a good or service interact with buyers who do not possess the good and want to acquire it. At each price the sellers decide how many units they want to offer or supply at this price, and the buyers decide how many units they want to buy or demand. The quantity supplied will be higher the higher the market price of the good, whereas the quantity demanded will be lower the higher the market price of the good. At the price at which these two quantities are identical, i.e., at the price at which the quantity demanded equals the quantity supplied, the market is in equilibrium. In equilibrium there are no buyers who would like to buy the good but cannot find a seller, and there are no sellers who would like to sell the good but are unable to find a buyer. This means that at the equilibrium price, the sellers are able to sell exactly the quantity they want to sell at this price and the buyers are able to buy exactly the quantity that they want to buy at this price. If we know the demand and supply in a particular market, we can easily find the market equilibrium by looking for the price at which the quantity demanded is equal to the quantity supplied. For example, suppose that in the market for pencils the market demand is given by the linear demand function <m:omath><m:ssub><m:ssubpr><m:ctrlpr></m:ctrlpr></m:ssubpr><m:e><m:r>q</m:r></m:e><m:sub><m:r>D </m:r></m:sub></m:ssub><m:r>= 10 - </m:r><m:r>p</m:r></m:omath> and the market supply is equal to <m:omath><m:ssub><m:ssubpr><m:ctrlpr></m:ctrlpr></m:ssubpr><m:e><m:r>q</m:r></m:e><m:sub><m:r>S </m:r></m:sub></m:ssub><m:r>= 2</m:r><m:r>p </m:r><m:r>- </m:r><m:r>2.</m:r></m:omath> In equilibrium the number of pencils that the sellers want to sell has to be equal to the number of pencils that the buyers want to buy, i.e., quantity supplied has to be equal to the quantity demanded, or <m:omath><m:ssub><m:ssubpr><m:ctrlpr></m:ctrlpr></m:ssubpr><m:e><m:r>q</m:r></m:e><m:sub><m:r>D </m:r></m:sub></m:…
disambiguating description: A market is in equilibrium if at the market price the quantity demanded is equal to the quantity supplied. The price at which the quantity demanded is equal to the quantity supplied is called the equilibrium price or market clearing price, and the corresponding quantity is the equilibrium quantity.
date posted: 2020-02-19T11:19:11Z
date modified: 2026-06-29T09:47:56Z
language: en
keywords: Market Equlibrium
keywords: Mirjam Sarah Salish
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: socialscience
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Economics and Social Sciences

Nash Equilibrium
type: CreativeWork
title: Nash Equilibrium
description: Many games in life have a Nash equilibrium of some type, and learning the Nash equilibrium can help economists predict human behavior (at least, when people behave rationally and selfishly in an economic sense). For example, the foundational Prisoner’s Dilemma features one Nash equilibrium. Other games may not feature one, however, particularly games with an unlimited set of possible choices. Put simply, a Nash equilibrium describes a situation in which each person acts optimally given the actions of the others, so that no one wants to change his or her action. The concept is named after the American mathematician John Nash (1928-2005) who formally developed the concept in the 1950s and won a Nobel Prize in Economic Sciences for his work. In many situations we are confronted with different options and have to decide which one to choose. The payoff (or utility) that we obtain from each option depends both on our own decision and on what others decide. For example, if I can commute to work either by car or by metro, how comfortable the car ride is depends on traffic. Meaning, how many others decide to commute by car affects my utility. A situation is a game when two or more decision makers (or players) decide between two or more options, and the players' decisions also affect each other’s payoffs. In a game, each player takes into account the immediate effect of his or her decision on his or her own payoffs and how the other players will react. As we assume that players are rational and their objective is to maximize their own payoff, we know that every player will play a "best response" to the strategy of the others. An action is the best response if it gives the player a higher payoff (or at least the same payoff) than the payoff that he or she can get by choosing any other possible action. The (Nash) equilibrium of a game The Nash equilibrium of the game corresponds to a situation where no one has an incentive to change his or her strategy given the strategies of t…
disambiguating description: Nash equilibrium is an important equilibrium or solution concept in non-cooperative game theory. A Nash equilibrium is a strategy profile (i.e. a strategy for each player) in which each player is playing the best response to the strategy of the other(s).
date posted: 2020-02-19T10:44:09Z
date modified: 2026-06-29T09:54:41Z
language: en
keywords: Nash Equilibrium
keywords: Mirjam Sarah Salish
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: socialscience
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Economics and Social Sciences