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In economics, a complementary good is a good whose appeal increases with the popularity of its complement. [ further explanation needed ] Technically, it displays a negative cross elasticity of demand and that demand for it increases when the price of another good decreases. [ 1 ]
In economics and game theory, the decisions of two or more players are called strategic complements if they mutually reinforce one another, and they are called strategic substitutes if they mutually offset one another. These terms were originally coined by Bulow, Geanakoplos, and Klemperer (1985). [1]
The main goal of the new model is to re-frame economic problems and set new goals. In this context, the model is also referred to as a "wake-up call to transform our capitalist worldview". [5] In this model, an economy is considered prosperous when all twelve social foundations are met without overshooting any of the nine ecological ceilings ...
The theory was originally proposed in the nineteenth century by Antoine Augustin Cournot. [1] This can be seen in private toll roads where more than one operator controls a different section of the road. The solution is for one agent to purchase all sections of the road. Complementary goods are a less extreme form of this effect. In this case ...
The classic counter example to the expected value theory (where everyone makes the same "correct" choice) is the St. Petersburg Paradox. [3] In empirical applications, several violations of expected utility theory are systematic, and these falsifications have deepened our understanding of how people decide.
In some cases economic predictions in a coincidence of a model merely assert the direction of movement of economic variables, and so the functional relationships are used only stoical in a qualitative sense: for example, if the price of an item increases, then the demand for that item will decrease. For such models, economists often use two ...
The balanced growth theory is an economic theory pioneered by the economist Ragnar Nurkse (1907–1959). The theory hypothesises that the government of any underdeveloped country needs to make large investments in a number of industries simultaneously.
Ricardian economics are the economic theories of David Ricardo, an English political economist born in 1772 who made a fortune as a stockbroker and loan broker. [ 1 ] [ 2 ] At the age of 27, he read An Inquiry into the Nature and Causes of Wealth of Nations by Adam Smith and was energised by the theories of economics.