Economics Online (Page 11)

Economics Online

An assortment of 7 presents wrapped in various holiday wrapping paper like red with white string, brown paper and red ribbons, and white paper with gold ribbons.

Behavioural economics

Understanding Hyperbolic Discounting and Spending Habits During the Holidays

Each holiday season, millions of people go over the budget they'd set for themselves, often regretting their actions after the fact. They make large purchases rapidly and then feel remorseful about what they did. The reason isn't that these consumers are undisciplined; seasonal marketing strategically exploits

Business economics

Agglomeration Economies and Localisation Effects: What Makes Being Located In The City of London A Competitive Advantage for Start-ups

While the City of London is just over 1 square mile in size, the sheer amount of economic output generated from such a small area would be hard to find even if the same amount of economic activity was spread across a whole region in the UK. In 2024, London

bid ask spread and market liquidity

Market Liquidity

The Bid-Ask Spread: Market Liquidity and the Hidden Cost of Every Trade

The cost of the bid-ask spread is not an obvious cost associated with every transaction; nonetheless, all traders incur this hidden cost when buying or selling. The gap between what a buyer is prepared to pay and what a seller is prepared to accept is called the bid-ask spread or

A close-up of a monitor displaying a Google Analytics admin dashboard, with a Google search for "digital marketing" visible in the browser tab

Business economics

The Digital Market for Lemons: Information Asymmetry & Signalling Theory in SEO

Remember the early utopian dream of the Internet? The one claiming that infinite digital connectivity would trigger the golden age of human integrity, enlightenment, equality, and democracy. Where is this dream today? The modern web reality is that everyone is exhausted by the low quality of information. On top of

Red and green ticker marks from the user interface of a real-time market data platform

Innovation & Technology

Network Effects: Why Financial Software Markets Keep Tipping Toward a Handful of Winners

When you log into a community bank’s online account software, swipe a card at a checkout counter, or open a Bloomberg Terminal, there is a high likelihood that you are interacting with one of the very few companies that dominate that specific area of financial software development. This is

Behavioural economics

Password Security Economics and Risk Aversion

It is estimated that over $200 billion will be spent this year on worldwide cybersecurity tools; however, one of the most important forces driving the growth of this industry has not been fully explored via economic theory. Risk aversion, or the fact that individuals (and businesses) generally value the avoidance

Information Asymmetry and the Market for Lemons: How Virtual Data Rooms Solve a Classic Economic Problem

Business economics

Information Asymmetry and the Market for Lemons: How Virtual Data Rooms Solve a Classic Economic Problem

George Akerlof's 1970 paper on the used car market is one of those rare pieces of economic writing that looks almost trivial on the surface. Why would a Nobel-worthy idea concern itself with second-hand Chevrolets? Because Akerlof wasn't really writing about cars. He was writing about

Accountant using notebook and calculator on a table

Global economics

The Pension Calculation Limited Company Directors Can No Longer Treat as Routine

The retirement calculation sitting inside the company accounts For the UK’s limited company directors, from contractors and IT consultants to family business owners and professional services firms, pension planning now sits at the intersection of business economics and personal finance. Many directors still think about retirement saving in the

Image of Dubai skyline with clouds hanging low.

Behavioural economics

Information Asymmetry and the Rise of Expat-Focused Real Estate Brokerages

Expat brokerages thrive by reducing information asymmetry, guiding foreign buyers to secure good properties abroad.

Singapore skyline at dusk. The lights of skyscrapers are glowing and reflecting on the water, while the sun sets behind the buildings.

Business economics

Transaction Cost Economics and Company Registration in Singapore: Why Institutions Matter

The concept of transaction costs, which was introduced by Ronald Coase, has had a significant impact on the development of modern economics. Transaction costs, which include searching for information, negotiating contracts, complying with regulations, and enforcing agreements, encompass all costs incurred by an economic actor when exchanging goods, services, or

An image of a metal bank vault focused on the bolt-throwing hand wheel

The Supply and Demand of Deposits: Why San Diego CD Rates Differ from the National Average

Many people assume interest rates move uniformly across the country in response to Federal Reserve policy, but the reality is national and local economic forces influence financial markets. Interest rate movements for banks and credit unions are driven by the same economic principles (e.g., supply and demand) that end

switching costs

The Unseen Drivers of Legacy Software Loyalty and Purchase Choices

Despite appearing as an unremarkable corner of the tech marketplace, PDF-based software displays perfectly how switching costs—a major construct of microeconomics—influence purchasing decisions for both businesses and consumers. For the purposes of this article, I will define Switching Costs (SC) as one-time financial, operational, and/or psychological costs

Human capital in motion

Forced Migration – The Human Capital Mobility and Brain Drain–Brain Gain Paradox

Forced migration can be economically damaging. Countries from which individuals have emigrated can lose the most educated and skilled talent—engineers, doctors, and teachers—who are key resources needed to rebuild their country after displacement. At the same time, the countries to which these emigrants go will see their arrival

Aerial view of Earth from space showing the interconnection of lights between cities

Business economics

Comparative Advantage in the Digital Coordination Economy: How Specialisation Evolves as Transaction Costs Fall

The theory of comparative advantage explains why firms, individuals, and countries benefit from specialising in areas with the lowest opportunity cost. Historically, comparative advantage has been used to explain the patterns of international trade. In the digital economy that is continually evolving, the distribution of information, tasks, and organisational functions

Graphic of a glowing human brain on top of a black computer chip connected to other parts

Competitive markets

Comparative Advantage and Content Specialisation in the Age of Generative Search

Comparative advantage is among the most fundamental principles taught in introductory economics courses. It explains how economic agents including firms, nations, and individuals can increase efficiency and overall welfare by specialising in the production of goods and services for which they face the lowest opportunity cost. Over time, these efficiencies

Professional taking notes at a desk with laptop representing human capital investment and management training

Business economics

Who Pays for the Manager? Human Capital Theory and the Economics of Leadership Training

In 1964, Gary Becker predicted a company sending its manager on a Leadership Development Program was an economic decision. He developed his Human Capital Theory (a foundation of Labour Economics), which states that training not only improves productivity but also indicates the source of funds needed for such training. Today

Warehouse storage

Economic Effects of AI-Based Surveillance Technology in Warehousing Industry

Introduction: The Information Problem in Modern Warehousing The warehousing industry serves as a key support structure for modern business activities. As businesses continue developing e-commerce into larger, faster, and more complex distribution networks, the warehouse manager faces increasingly difficult management problems, which correspondingly increase operational challenges, such as inventory shrinkage,

Virtual dataroom

Virtual Data Rooms as market institutions

VDRs function as intermediaries between multiple parties, providing a means for them to share sensitive data, without the costs associated with creating a physical (or digital) shared workspace for each side to exchange information. Thus, VDRs create value by providing a method for reducing the costs of searching, verifying, enforcing,

Landscape showing a hilly region with three wind turbines in the foreground

Information Failure

Principal-Agent Theory and the Rise of ESG Reporting: Incentives, Institutions, and Regulation

The principal-agent concept is one of the most important theories in economics. This concept describes a relationship between two parties, principals and agents, in which principals delegate decision-making authority to agents. In a corporation, investors or shareholders are the principals and the managers are the agents. One of the issues

Customer loyalty programs often make regular customers eligible for free products after a certain amount of purchases.

The Economics of Loyalty: Points, Perks, and Predictable Behavior

Why are customer loyalty programs so popular? Both sellers and buyers can benefit from well-designed loyalty programs, but both parties should also be aware of the potentials for manipulation and abuse.

Remote workers are changing economic geography across the world by moving away from big cities.

Economic Geography and the Rise of Remote Work

The Covid pandemic of 2020-21 created a tremendous surge in remote work. Five years after the start of the pandemic, how has the remote work revolution changed our globe's economic geography? What are the policy implications of these changes?

Consignment stores and online clothing resale sites are part of circular markets for used goods.

The Resale Economy: From Fast Fashion to Circular Markets

Many young consumers are beginning to look at circular markets for gently used clothing instead of relying on mass-produced, disposable "fast fashion." What are the economic incentives behind using circular markets to buy secondhand goods?

University lecture hall with students

The Value of an MBA: A Comparison of Human Capital vs. Signalling

When discussing whether an MBA degree has value, we are really debating two different theories in labour economics. Michael Spence's signalling theory claims that credentials signal pre-existing ability to employers in situations where an employee's ability cannot be directly observed. Gary Becker's human capital

Retirement Savings

Incentive Mechanism: Retirement Savings in the Small Business Labour Market

Small businesses find themselves in a precarious situation within the labour market as they compete with larger employers for the same pool of workers and find it difficult to offer the same level of salaries, brand recognition, and benefits as corporate employers. Of these areas, the most significant is an

A hand placing a red puzzle piece into a puzzle of a ll white pieces

Principal–Agent Theory and Affiliate Fraud: Why Performance-Based Marketing Creates Opportunities for Strategic Misreporting

In microeconomics, one of the critical concepts is the principal-agent problem, which refers to a situation in which an individual (the "principal") hires or contracts another individual (the "agent") to perform a task on the principal's behalf. Differences in information and incentives between principals