A problem of adverse selection occurs in the case of asymmetric information  whenever a better informed market player uses information to take advantage of another player in the market who does not hold that information.  In turn, this adversely affects participation in the market.

An antitrust policy is a law or other government regulation that limits the dominance of large firms and promotes competition in the market.

If market players have different levels of information about each other’s valuations of the market then the information is asymmetric, or asymmetrically distributed. In classical economic theory, information is assumed to be complete and evenly distributed among market players: each player knows how the other players value the items being traded in the market. This simplifies the analysis of the market because the players’ actions will be certain and predictable. Market outcomes (prices and quantities) can then be easily calculated.

Consumer surplus is the gain made by consumers when they purchase an item at the competitive market price rather than the (highest) price that they would have been willing to pay for it.  Analogously, producer surplus is the gain made by producers when they sell an item at the market price rather than the (lowest) price that they would also have accepted for it.

When economists say “ceteris paribus” they are talking about the direct effect of X on Y while assuming that the rest of the world stands still. Ceteris is Latin for “other things” and paribus means “equal” so the literal translation is “other things being equal” but in economics it is generally understood to mean that all other things remain equal or constant (while dealing with the issue at hand).

As has been recently been documented on INOMICS, students across the world are facing a mental health crisis of unprecedented proportions. We had columnist James Matthew Alston investigate the phenomenon, looking particularly at university responses, and it's fair to say his conclusions made for tough reading.

Dating in academia is riddled with potholes, the most immediate of which is do not stray far from your academic discipline. Curious indeed considering that the academic world is meant to be populated by an abundance of young and energetic minds from a variety of different cultures, races and ethnicities, all of whom are hungry for new information and experiences. One would think that such an environment would provide the perfect dating terrain, right? Wrong!

The holidays are coming up soon, with Christmas just around the corner. If you want to avoid last-minute panicked present-buying, you had better get to planning the gifts you'll be giving. And what if you have an economist in your life? What would be the perfect gift for them? We're here to help your Christmas gift woes with some fun suggestions for the 10 best gift ideas for an economist. Happy holidays!

Esther Duflo is something of a rarity in her field, and not just for being the youngest ever recipient of the Nobel Prize in Economics, or the second only female winner. Her pioneering research also sets her apart. Eschewing the grand theory model favoured by her contemporaries, Duflo has carved out her own academic path, pursuing a rigorous analysis of - in her own words - ‘the pieces that comprise the whole’.

Elasticity refers, in its most basic form, to how much an individual, a business, a producer or a consumer changes its demand, or amount of goods supplied, as a result of price and income fluctuation. It is a core economic concept and provides answers to some central questions, such as how much more or less a product will sell if the price is raised or lowered or how much these price changes will affect the sales of other products.

This subdiscipline of economics studies how the economic decisions made by individuals and institutions are influenced by psychological, cognitive, emotional, cultural, and social factors. Specifically, it busies itself with looking at rational decision making - and its boundaries - in contrast to how decision making is seen in classical economics.

Game theory is an important field of study in economics that focuses on the interaction of several decision makers that act strategically. A game refers to any type of situation in which the payoff or utility that an individual can gain by making a decision depends not only on their decision but also on the decision of others.

Also known as consumer choice, this term refers to the study of how and why people spend their money based on their preferences, and how they maximise the utility of their purchases while working within budget restraints. Some of the basic ideas of consumer theory state firstly that people try to make rational decisions which bring them the greatest utility; secondly, that people will always make multiple shopping trips, one not sufficing; and thirdly, that the more you use a product, the less you want it.

Having the comparative advantage (if, for example, you are a business) means that you can produce a good or service at a relatively lower cost than that of your competitors. Having the comparative advantage means you will be able to sell your goods for a lower cost than your competitors and potentially perform better.

An asset is ANY resource that produces positive economic value for its owner - its owner being its owner as a result of a past event, most likely a transaction. There are two classes of assets, tangible and intangible, which are themselves made up of subclasses. Of the tangible variety, most commonly you’ll hear about current and fixed assets. Current assets refer to things that can be consumed, exhausted or sold, such as cash, stock, and marketable securities.

Standing in contrast to macroeconomics, microeconomics looks at the choices made by economic actors - be they people, firms, or whole industries -  and how they affect the allocation of scarce resources. Primarily, this involves investigation into why goods and services assume different values and understanding how changing economic conditions can alter the decision-making of economic actors. 

Well, capital is a catch-all term that refers to a person’s assets, which means something useful a person has which can create wealth - and it can be extremely broad and be interpreted in many ways. On the face of it, capital is one of if not the most important thing in an economic system. The financing and investing of capital helps to define if and how the economy grows and also how people experience their returns on investment. To this end, capital is a good measurement of wealth, and also a means of creating wealth through the investment of capital.

Pioneered by Ragnar Frisch, Lawrence Klein and Simon Kuznets, econometrics is the application of statistical models to economic data to develop both new theories and test existing hypotheses - a division which demarcates its two main branches: theoretical and applied. Its aim is the quantitative analysis of economic phenomena; giving empirical content to economic relationships. Or in other words, analysing economic history and making forecasts.

You’ve all heard the term before, countless times no doubt. But what does it really mean? Well, the biggest clue is in the name. MACROeconomics is a branch of economics that looks at the economy as a whole, specifically, at its structure, performance, and behaviour. It does so by considering aggregate changes to phenomena like gross domestic product (GDP), inflation, price indices, national income and unemployment rates. 

Kapitalismus oder Sozialismus? Francis Fukuyamas Ausrufung der liberalen Demokratie zur höchsten Entwicklungsform eines Staatsgebildes hat sich bislang noch nicht eindeutig bestätigt. Die uralte Frage "Kapitalismus oder Sozialismus?" hat wieder an Bedeutung gewonnen. In einem auf der ganzen Welt erkennbaren Muster stehen Politiker vor einer Wahl - eine ungewöhnliche Sache in der modernen Politik -, die man grob so beschreiben kann: Willst du mehr Kapitalismus oder möchtest du ein wenig Sozialismus ausprobieren? Das klingt einfach, aber die Frage ist in der Tat vielschichtig.