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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
item list element: Is it time to bin GDP?
item list element: Marginal Revenue
item list element: Government intervention helps women. We need more of it
item list element: Scarcity and Choice
item list element: Trade Barriers
item list element: Dress Code for Economic Conferences: What to Wear and What to Avoid
item list element: The US Economy is Failing Young People
item list element: Price Elasticity of Supply
item list element: Oligopoly
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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

Is it time to bin GDP?
type: Article
title: Is it time to bin GDP?
description: However, in these troubled economic times, it’s increasingly unclear whether GDP remains an appropriate measure. After all, it ignores inequality, still rampant across the Western world; it doesn’t take into account the earth’s dwindling natural resources; and it fails to recognise the rapidly deteriorating environment. With such glaring omissions, should it really be trusted to measure the success of our economies, and by proxy, the quality of our lives? Here we take a closer look at the measurement’s history, the charges it faces, and its future, all in an attempt to better answer the question: is it time to bin GDP? Its birth Russian-born economist Simon Kuznets first developed GDP, initially known as Gross National Product (GNP), in the early 1930s. His design came at the behest of the US government which, during the Great Depression, was seeking a more accurate measurement of economic output to guide its interventionist governmental policy. As economist Kate Raworth describes, 'GDP enabled President Roosevelt to monitor the changing state of the US economy and so assess the impact and effectiveness of his New Deal policies'. A few years later, as America readied itself to enter the Second World War, GNP was again of use. In his book, How to Pay for the War, John Maynard Keynes explained how important aggregate economic statistics like GNP are for converting an industrial economy into a planned military one. Knowing what was available for a country to mobilise was essential to any credible war planning. Interestingly, in the 1934 report Kuznets delivered to US Congress, he warned against the use of GDP as a measure of economic welfare, and placed emphasis on maintaining a clear distinction between the quantity and quality of growth. Economic welfare, he claimed, could only be ascertained if personal distribution of income is known – something GDP does not calculate. In his own words: ‘goals for more growth should specify more growth of what and for what’. His re…
disambiguating description: Gross Domestic Product, or GDP, is the market value of all goods and services that a country produces in a given year, adjusted - to make it comparable to previous years - for inflation. In many ways, though, it's transcended this rather prosaic definition. It's become the barometer of a country’s progress, an indicator of a land’s prosperity, and the ultimate yardstick for assessing living standards. When growing (at expected rates), politicians refer to it as proof of the success of their policies. And when rates are not met, or, god forbid, GDP growth slows, it’s weaponised by those for whom it’s politically expedient. It has the power to both elect governments and bring them crashing down. In the theatre of politics, rarely is it anywhere but centre stage.
date posted: 2019-04-25T14:51:51Z
date modified: 2026-07-07T10:11:17Z
employment type: onsite
language: en
keywords: gpi
keywords: GDP
keywords: economics
keywords: William Pearse
keywords: economic growth
keywords: kuznets
type: blog
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: macroeconomicsmonetary
disciplines: socialscience
disciplines: business
disciplines: management
disciplines: economicthoughtmethodology
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: Business
discipline labels: Management
discipline labels: Economic Thought & Methodology (JEL B)

Marginal Revenue
type: CreativeWork
title: Marginal Revenue
description: Whenever a firm increases the number of units it sells, this will affect the firm's revenue, because the quantity sold is higher and revenue is equal to the number of units sold times the price they were sold. In a perfectly competitive market, each firm acts as a price taker and can sell as much as it wants to at the market price. This implies that the marginal revenue in a perfectly competitive market is equal to the market price. For example, if a firm is selling orange juice at €2 per glass (and it can sell as many glasses as it wants to at this price), then any additional glass of orange juice that the firm sells increases total revenue (TR) by 2 and thus, marginal revenue is equal to 2. That is, if the firm increases quantity from 10 to 11 glasses, total revenue increases from 20 to 22 and the change in total revenue is equal to 2: MR = TR (11 glasses) – TR (10 glasses) = 11 * 2 – 10 * 2 = 22 – 20 = 2. If the market is not perfectly competitive, the marginal revenue is not necessarily equal to the market price. Consider a monopolist who faces the entire market demand. In order to sell more units, the monopolist would have to decrease the price for all units (not only for the additional unit that it wants to sell). This means that total revenue could increase by less than the market price if the next unit lowers the sales price by too much. To be more precise, selling one more unit will increase total revenue by the price at which the good is sold minus the revenue that the monopolist loses from selling all units at a lower price. Total revenue is a quadratic function which is maximized at the point where marginal revenue is equal to zero (at quantity q *). Mathematically the marginal revenue is the derivative of total revenue with respect to quantity, i.e. \begin{equation*} \mathit{MR} = \frac{\mathit{dTR}}{\mathit{dq}} = \mathit{p(q)} + \mathit{q}*\frac{\partial\mathit{p(q)}}{\partial\mathit{q}} \end{equation*} where TR is total revenue <m:omath><m:r>TR </m:r…
disambiguating description: Marginal revenue (MR) measures the change in total revenue that occurs when a firm increases output by one unit, i.e., it is the extra income (or revenue) generated by selling one additional unit.
date posted: 2020-02-11T13:14:54Z
date modified: 2023-10-05T17:30:27Z
language: en
keywords: Marginal revenue
keywords: Mirjam Sarah Salish
type: terms
disciplines: microeconomics
disciplines: economics
disciplines: financialeconomics
disciplines: socialscience
discipline labels: Microeconomics (JEL D)
discipline labels: Economics
discipline labels: Financial Economics (JEL G)
discipline labels: Economics and Social Sciences

Government intervention helps women. We need more of it
type: Article
title: Government intervention helps women. We need more of it
description: These aren’t easy questions, the rancorous nature of current American politics evidence of their polarising nature. Nevertheless, as social expectations are raised, they require constant reappraisal, for certain injustices necessitate government intervention. Research has shown that gender equality, especially, is reliant on an active, intervening state to provide things the market has historically failed to offer and that are vital to progress - namely parental leave and childcare. The case for placing both in the custody of the state is compelling, and ultimately, if gender inequality is to be taken seriously, necessary. Here’s why. Historic prejudice The labour market has rarely been a friend to women. Reflecting regressive social mores, it has, for most of its history, viewed the female condition as unsuitable for the dog-eat-dog world of work - too sensitive, too fragile - while pregnancy itself carried great disruptive potential, an ever-present, ticking time-bomb. These sentiments continue to find expression in the hiring process - men preferred to women in a phenomenon economists call ‘statistical discrimination’. The preference presumes that women are more likely to quit work on account of starting a family. And being ‘more likely’ to quit, they are paid less - globally women earn 24% less than men according to Oxfam - as businesses safeguard themselves against future losses. In turn, unfair remuneration makes women actually more likely to quit, and the circle is complete. A similar logic makes women less likely to get promoted, explaining their relatively few numbers in positions of high authority. The material ramifications of this are dire, to say nothing of the ethical injustice. UN unemployment and poverty statistics are all skewed unfavorably towards women, and mothers have it particularly bad. Despite progress having been made - 39% of the global workforce are women and there’s been a haphazard re-examination of caregiving roles in society - the rest…
disambiguating description: The jostling between market and state, and the territory that each occupies, lies at the heart of political discourse. It's the major fault line around which political parties form and debates rage. Despite their uneasy relationship, between them they generally make available all that we need, be it food, a home, healthcare, employment, or education, at varying - and often questionable - quality and cost. The demarcation between the two, rarely ever static, differs widely across states, and speaks to the values of the society in question. What, for instance, can be said of a country whose privatised higher education is financially off limits to its poorer citizens? Is it right to leave the market responsible for people’s health? And what of the provision of childcare?
date posted: 2020-02-04T14:01:24Z
date modified: 2026-07-07T10:12:16Z
employment type: onsite
language: en
keywords: inequality
keywords: gender
keywords: William Pearse
type: blog
disciplines: politics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: socialscience
disciplines: labordemographiceconomics
disciplines: healtheducationwelfareeconomics
discipline labels: Politics
discipline labels: Public Economics & Economic Policy (JEL H)
discipline labels: Economics
discipline labels: Economics and Social Sciences
discipline labels: Labor and Demographic Economics (JEL J)
discipline labels: Health, Education, and Welfare (JEL I)

Scarcity and Choice
type: CreativeWork
title: Scarcity and Choice
description: Some resources are plentiful while others are rare. We tend to think less about the air that we breathe than about how we are going to spend our time on any given day. That is because breathable air is in apparent abundance while the number of hours in a day is clearly limited. Our decision to breathe is not a conscious one and is thus somewhat uninteresting for an economist. On the other hand, a whole branch of economics exists to understand and explain our choices of time allocation: how many hours we choose to work and how many hours we choose to play are of fundamental importance to the labor market. It is not just people’s time but also their skills that are in limited supply. Economists are typically concerned with the efficiency of any allocation: how can the most be made of such scarce resources? While mainstream economics focuses on the preferences and decisions of individuals in society, evaluating the fair allocation of scarce resources requires aggregation of preferences in order to judge the utility of an allocation to society as a whole (see welfare economics). Thus, not only the efficiency of an allocation but also its equity, or distributive fairness, is relevant to the study of scarcity and choice. Indeed, the issue of equity is central to the debate on free-market versus planned economies. The scarcity of a resource in a particular context can be quantified and hence judged objectively. Traditionally, economists have also studied people’s choices over scarce resources as though they were taken through simple, objective and rational calculation. Of course, people’s decision-making is not purely rational; it is affected by emotion too. The fast-developing subfield of behavioral economics applies insights from human psychology to enrich economists’ understanding of choice at a more subjective level. <11an>limit:3;categories:Master's Programs;disciplines:Economics</11an> The basics of supply and demand tell us that the price of a rare item will be high…
disambiguating description: Where there is scarcity, choices must be made! Scarcity refers to the finite nature and availability of resources while choice refers to people’s decisions about sharing and using those resources. The problem of scarcity and choice lies at the very heart of economics, which is the study of how individuals and society choose to allocate scarce resources.
date posted: 2020-02-10T09:30:33Z
date modified: 2022-04-04T10:35:51Z
employment type: onsite
language: en
keywords: scarcity and choice
keywords: Supply and choice
keywords: scarcity
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

Trade Barriers
type: CreativeWork
title: Trade Barriers
description: The theory of comparative advantage states that as long as countries have access to resources in different proportions (i.e. at differing relative cost) then they will all gain from engaging in international trade with one another. To realize these gains from trade, they each need to simply devote resources to the industries where domestic production is most efficient and then trade to receive other goods that satisfy domestic demand. Seen in this light, limiting trade between economies results in a deadweight loss. Economists, ever in search of efficiency, therefore tend to agree that free trade agreements are a good thing and that trade barriers are to be avoided. Nevertheless, trade barriers are becoming commonplace around the globe as many governments take a protectionist stance to their economies. While countries as a whole do tend to gain from free trade, as more countries participate in the world economy, competition in production intensifies, leading to losses for certain groups within countries. Wages and jobs in particular industries can come under pressure. In theory, this loss of a less efficient industry at home can be ameliorated by retraining and reallocating people and jobs to more productive areas of the economy. Yet trade barriers can have a more immediate effect because retraining takes time. Trade barriers are hence favored by many citizens and politicians looking for a quick fix. Over time, this results in countries propping up inefficient domestic industries with subsidies and tariffs, creating yet more deadweight loss. <11an>limit:3;categories:Master's Programs;disciplines:Economics</11an> A prime example of this is the trade dispute that began in June 2018 between the US and China and their governments’ discussions regarding tariffs on imports. The decision by the British electorate to leave the European Union can also be explained in part by an aversion to the free movement of people; exiting the bloc effectively erects a non-tariff barrier …
disambiguating description: Trade barriers refer to the obstacles that are put in place by governments to limit free trade between national economies. Trade barriers are thus essentially interventions in markets that happen to operate internationally. Trade barriers include tariffs (taxes) on imports (and occasionally exports) and non-tariff barriers to trade such as import quotas, subsidies to domestic industry, embargoes on trade with particular countries (usually for geopolitical reasons), and licenses to import goods into the economy.
date posted: 2020-02-10T10:32:13Z
date modified: 2025-03-13T10:05:29Z
employment type: onsite
language: en
keywords: Trade barriers
keywords: subsidy
keywords: tariff
keywords: free trade
keywords: international trade
keywords: Tom McKenzie
type: terms
disciplines: microeconomics
disciplines: internationaleconomics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: macroeconomicsmonetary
disciplines: socialscience
disciplines: laweconomics
disciplines: industrialorganization
discipline labels: Microeconomics (JEL D)
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: Law and Economics (JEL K)
discipline labels: Industrial Organization (JEL L)

Dress Code for Economic Conferences: What to Wear and What to Avoid
type: Article
title: Dress Code for Economic Conferences: What to Wear and What to Avoid
description: Having previously helped thousands of INOMICS users find the right economics conference for them, it seemed only polite to give some general guidelines about what’s appropriate to wear once there - we know you economists are a particular bunch! Hopefully this advice will allow you to check one small thing off your (very long) checklist, and allow you to focus on the more important aspects of attending an academic conference: the networking, presenting, and possibly - fingers crossed - even having fun! So, let's get serious. Check out our conference listings The basics It’s quite likely that you’ll be traveling prior to the conference and might not have access to an iron. This one should keep in mind. Moreover, remember to pack clothes that work for both standing and sitting (there will be a lot of both, economists really can talk) and won’t be completely wrinkled after a few hours. With this in mind, avoiding linen is probably a good idea, unless, perhaps, your conference is taking place on a tropical island. In which case, lucky you! Bringing some back-up options is always a good idea in case one of your items of clothing gets a wee bit dirty or, god forbid, you have an accident. Wearing dark colours is normally a good idea as they are universally flattering and hide wrinkles and spillages well. Finally, pack some layers; you might be in a room with an air conditioner for one talk and in a veritable sauna the next, and you don't want to be distracted by being too hot or too cold. Smart is better than casual Broadly speaking, it’s always better to dress up rather than down. While “business wear” can mean a full suit for some folks and jeans and a nice top for others, it’s better to be the only guy with a tie than the only one without. No matter what time of year, shorts are never a good choice, as they come across as too casual. For women, skirts and dresses are fine, but nothing too tight or short, as this can seem unprofessional. A nice blazer or scarf can dress u…
disambiguating description: While you may be used to the daily routine of graduate school or teaching, presenting at a conference, or even just attending one, can be a whole different activity. The preparatory checklist is long enough as it is, without having the added conundrum of worrying about your appearance. If you’re in business school, perhaps you’re used to ironing your button-down shirt and slacks every day, but most academics cringe when they hear the term 'business casual'. But fear not. We, the gracious folks at INOMCS, are here to help.
date posted: 2019-04-30T07:00:00Z
date modified: 2026-07-07T12:58:08Z
language: en
keywords: economics
keywords: James Matthew Alston
keywords: academia
keywords: dress code
keywords: conferences
keywords: finance
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)

The US Economy is Failing Young People
type: Article
title: The US Economy is Failing Young People
description: But what of people's lives? With records being broken, and figures heralded as ‘the best ever’, you'd be forgiven for presuming people’s lives were improving in parallel, that the numbers translated into more than just useful soundbites. For most this is yet to happen. In explanation, economist, Joseph Stiglitz, has denied that the nation’s economic health has experienced a marked improvement, claiming ‘neither GDP nor the Dow is a good measure of economic performance, for neither tells us what’s happening to ordinary citizens’ living standards’. Indeed, if one looks to more tangible metrics - life expectancy (falling and among the lowest in the developed world), disposable income (on the decline), and household debt (skyrocketing) - a vastly different picture of American life emerges: one of stagnation, uncertainty and strife. It’s with this picture that young Americans, in particular, most identify. Instead of prosperity, millennials (Americans born between 1981 and 1996) anticipate economic future of precariousness, Trump’s creation of ‘the greatest economy… in the history of the country’ having no recognisable bearing on their reality. Optimism, the characteristic for which they were once known, is fading, and in its place has grown a shrewd pragmatism, accompanied by an acceptance that the US economy, regardless of its supposed merits, is deeply flawed. Whoever is experiencing its much touted ‘improvements’, it’s not them. <11an>limit:2;categories:Graduate / Traineeship|Internship|Junior Industry Position|PhD Candidate;countries:united states;disciplines:Economics</11an> Broken promises Remember, this was the generation that were told a college education was everything, the ticket to a comfortable life. Having held up their end of the bargain - becoming the most educated generation ever in the process - they’re now finding out the social contract to which they committed was sold on false pretences. High on the list of grievances are tuition fees - they are eye-…
disambiguating description: The US economy is improving, so we are told. With the financial crash receding into the distance, almost out of sight, things are looking up, the future is finally brightening. Unemployment reached a 50-year low in 2019, falling to 3.5%, while US employers have added almost 5 million jobs in just two years. These are ‘the best economic numbers our country has ever experienced’, the President declared at Davos, with characteristic humility. And bombast aside, his sentiment is not without foundation, the US economy is posting some good numbers. In addition to jobs, GDP has been growing at close to 3 percent annually, and the Dow Jones has increased by 49% is the last 3 years - all of which is great election fodder for the coming campaign. Democrats should be wary.
date posted: 2020-01-28T15:06:54Z
date modified: 2026-07-07T10:14:47Z
employment type: onsite
language: en
keywords: William Pearse
keywords: Millennials
keywords: US Economy
type: blog
disciplines: politics
disciplines: publiceconomicspolicy
disciplines: economics
disciplines: macroeconomicsmonetary
disciplines: socialscience
disciplines: economicdevelopmentgrowth
disciplines: healtheducationwelfareeconomics
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: Economic Development, Innovation and Growth (JEL O)
discipline labels: Health, Education, and Welfare (JEL I)

Price Elasticity of Supply
type: CreativeWork
title: Price Elasticity of Supply
description: \begin{equation*} \eta_A = \frac{\Delta\mathit{q}_{A}}{\Delta\mathit{p}_{A}} = \frac{\frac{d{q}_{A}}{\mathit{q}_{A}}}{\frac{d{p}_{A}}{p}} \end{equation*} Price elasticity of supply is generally positive because firms are motivated to supply more (less) of an item as its price rises (falls). Precisely how sensitive supply is to changes in price depends on several factors. The most important is how long it takes sellers to adjust the amount of the item they can offer for sale. This is not just about the ability to ramp up production when more of the item is demanded. It is also about how feasible or costly it is for the seller to store items when demand falls. The more complex the production process, the greater the dependence of sellers on other markets. Greater interdependence also increases the seller’s responsiveness to price changes. In markets for physical goods and the local provision of services, public infrastructure is also a significant factor in the price elasticity of supply. The supply curves for five standard theoretical cases are shown in the graph below. In the first case, the supply curve S1 starts at the origin (0,0), and is linear and upward-sloping. This implies that any change in price is met with a proportional change in quantity supplied. Therefore the price elasticity of supply is unitary η1 = 1. If the item’s price increases by 10%, so too does its quantity supplied. As with the price elasticity of demand there are two extreme cases for the price elasticity of supply: perfect elasticity and perfect inelasticity. The horizontal supply curve S2 represents perfectly price-elastic supply: the elasticity tends towards (positive) infinity η2 → ∞. In theory, this means that if its price increases above p2 then an infinite amount of the item will be supplied. But, if its price drops below p2 then none will be supplied. Clearly, this is unlikely to happen in practice. However, in industries with flexible production and factor markets with spare capaci…
disambiguating description: The price elasticity of supply for an item A ηA measures how the quantity of the item supplied qA changes in response to a change in the item’s price pA
date posted: 2020-02-05T10:55:32Z
date modified: 2026-06-29T10:30:32Z
language: en
keywords: Price elasticity of supply
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

Oligopoly
type: CreativeWork
title: Oligopoly
description: Markets for goods and services have varying numbers of sellers, ranging from one (monopoly) to infinitely many (perfect competition). Oligopoly lies somewhere in between. In practice, industries with between two (duopoly) and six major players are considered to be in oligopolistic competition. Examples of oligopoly include the markets for mobile telephone networks such as Deutsche Telekom, Orange, Telefónica and Vodafone in Europe, the market for large passenger aircraft like Airbus and Boeing, and the market for soft drinks like Coca Cola and PepsiCo. The theory of oligopoly originated in 1838. French polymath Antoine Augustin Cournot observed a market for mineral water, which had two firms competing for market share. Realizing that neither firm could ignore the other’s supply of water in the market, Cournot analyzed the market as a game in which the quantity supplied by one firm q1 is a direct function of the quantity supplied by the other q2, i.e. reaction function q1*(q2) as shown in the graph on the left. Assuming that each firm sells an identical or homogenous product, faces identical costs and that the firms act simultaneously, equilibrium quantities supplied in the market are determined where the reaction functions cross q1*(q2*) = q2*(q1*). This was the first formal representation of a Nash equilibrium. It was over a century before John Nash published his general proof. In Cournot equilibrium, both firms make a positive profit and the market is supplied with more of the item at a lower price than in monopoly, but less of the item and at a higher price than in a perfectly competitive market. Figure 1: Nash equilibrium comparison between Cournot and Bertrand market scenarios Forty-five years later in 1883, another French professor, Joseph Louis François Bertrand, contended that Cournot’s analysis of oligopolistic competition was unrealistic since firms more commonly compete not on quantity but on price in the real world. Under the same assumptions of identica…
disambiguating description: An oligopoly is a market in which there are only a few sellers of the item being traded. The decisions of one seller thus affect the decisions of the other sellers in the market. Sellers compete strategically in the market by taking each other’s interests and actions into account.
date posted: 2020-02-05T11:01:37Z
date modified: 2026-06-29T09:56:57Z
language: en
keywords: oligopoly
keywords: Tom McKenzie
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)