Economics Online (Page 7)

Economics Online

Low-angle view looking up at modern glass corporate skyscrapers

Business economics

Why Multi-Entity Businesses Face Rising Coordination Costs

A multi-entity business is a group of legally separate companies operating under common ownership, typically a parent company with subsidiaries, holding companies and special purpose vehicles (SPVs). Splitting activity across several entities brings real economic benefits, particularly around risk and finance. Each additional entity, however, adds administrative and coordination costs

Smartphone screen displaying the LinkedIn app download page on tablet

Competitive markets

Market thickness is why B2B sellers can still find buyers on LinkedIn

Market thickness is what makes LinkedIn unusually effective for B2B selling, and it is a structural advantage rather than a persuasive one. LinkedIn has over 1.3 billion members, which puts nearly every plausible buyer in one central location; the number of participants creates a much more effective market for

Firms can use data analysis to streamline operations, conduct market research, and design more desirable products.

Data as an Input: Returns to Scale in the Information Economy

As firms increase their volume and analysis of consumer data, will they become increasingly efficient at drawing in customers and create natural monopolies in each market? Will smaller firms be able to hold on in our digital analysis age?

The rise of remote work during the Covid pandemic led to many urban white collar workers moving to small towns.

The Economics of Remote Work Geography

In the short and long run, how will the rise of remote work - spurred by the Covid pandemic in 2020 - affect the geography of economic activity? Although many workers initially moved to small towns, return-to-office mandates are calling some back.

The sunk cost fallacy explains that, although the money spent cannot be recovered, people continue to pursue bad investments.

Subscription Creep and the Sunk Cost Fallacy

As consumers, we are often susceptible to the sunk cost fallacy that has us continue to invest in bad decisions...despite not being able to recoup the money. Why do we continue to let unused subscriptions drain our wallets?

Warehouse aisle with tall green and red racking stacked with cardboard boxes, and a worker in the distance

Business economics

Negative Externalities of Inefficient Inventory Systems

There Are Costs Associated with Externalities Beyond Just Dealing with Themselves When Retailers Have Inventory They Cannot Sell Economists use externalities to describe situations where a third party is hurt because someone has done something that has had a negative impact on them. Some examples are pollution and traffic congestion.

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Business economics

Adaptive Learning as Bayesian Updating: Decision Theory in Modern Test Prep

Adaptive test prep uses Bayesian updating and IRT to target weaknesses, balancing exploration and efficiency for faster mastery.

Today's digital era can result in subscription fatigue as consumers try to mentally budget their many digital subscriptions.

The Subscription Fatigue Paradox: When Too Many “Small” Payments Hurt Growth

How many online subscriptions do you have? Does it exhaust you to try to budget them all? You're not alone: subscription fatigue is growing more common as consumers struggle to conceptualize their spending. How can sellers reduce this strain to their advantage?

Polluting firms can purchase carbon offsets (also known as carbon credits) to reduce their environmental impact. Does it work?

Carbon Offsets and the Market for Guilt Reduction

For years, polluting firms have been able to purchase carbon offsets, also known as carbon credits, to reduce their carbon footprint and say they are not contributing to global warming. Is this actually the case?

International Money Transfers: Reducing Transaction Costs and Enhancing Efficiency

International Money Transfers: Reducing Transaction Costs and Enhancing Efficiency

International money transfers have become a prominent feature of the global economy. The capacity to move money across geographical borders can directly affect businesses paying suppliers, and individuals sending remittances, and the efficiency of the means of payment is particularly pertinent to trade, consumption, and investment. Yet, the transaction itself

When you listen to your favorite artist through a subscription service, does he or she get paid fairly for the work they produced?

The Streaming Royalty Puzzle: Who Gets Paid and Why

Artists create amazing songs, books, paintings, television shows, and movies. When copies of these original creations are paid for by millions of customers, how are these artists compensated? Is it a fair system?

How much would you be willing to pay to ensure that your identity was protected online?

The Rise of Pay-to-Verify: Monetizing Digital Identity

With threats from hackers and scammers increasing online, many consumers and businesses are willing to pay for identity verification and identity protection services. What is the market for these services?

In the near future, art generated by AI may be indistinguishable from that created by a human artist. What then?

The Economics of Generative AI in Creative Industries

Many people fear an upcoming "AI unemployment apocalypse", especially content creators like artists, writers, and journalists. What are the economic forces behind companies using AI to generate content, and what might be done to protect workers?

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Behavioural economics

The Hidden Economics of Getting Divorced: What Florida Residents Actually Pay

I've spent years looking at how people make financial decisions under pressure, and divorce might be one of the least rational markets out there. You're emotionally drained, probably not sleeping well, and then you're supposed to make smart choices about thousands of dollars in

Close-up of a financial trading screen showing red and green candlestick bars trending downwards, with moving-average lines overlaid.

Bid-Ask Spreads Through the Trading Day: Why a Single Average Figure Misleads UK Traders

Introduction The bid-ask spread is the gap between the price at which a broker will buy a currency pair from you (the bid) and the price at which it will sell to you (the ask). It is the dealing cost a trader pays on entry and exit, whether or not

Many consumers encounter dark patterns in website development that influence them to spend more than they planned.

Dark Patterns and Consumer Choice Architecture

Online, sellers can use various web design practices, known as dark patterns, to influence or manipulate us into spending more money than we planned. What are the economic effects of this controversial practice?

Many consumers today purchase bundles of streaming services rather than individual services.

The Economics of Subscription Bundling Wars

Consumers today often have the option to purchase bundles of digital services at a lower total cost than buying each separate service individually. Is this a good deal for producers, consumers, both, or neither?

Hands typing on a tablet keyboard showing a crypto exchange trading dashboard with price charts and order book

Digital Asset Custody: Why Institutions Are Rethinking How They Hold Crypto

Digital asset custody is the practice of securely holding the private keys that control cryptocurrencies and other blockchain-based assets. It sounds like a narrow technical matter, but it has become one of the central questions in how digital assets are integrated into the wider financial system. As banks, funds, and

Could sophisticated AI software quickly determine the maximum you would pay for any item, and charge you accordingly?

Surge Pricing in the Age of AI: Fairness or Exploitation?

Some people fear that one of the many changes coming with AI is rampant price discrimination, where algorithms analyze each consumer and charge him or her the maximum price that he or she would be willing to pay. What could happen to society?

Close-up of hands typing on a smartphone to fill out a mobile form

Innovation & Technology

Insurance App UX Is a Revenue Problem: Where Quotes and Claims Lose Customers

Insurance apps lose revenue not only because of visual shortcomings but also because potential customers may struggle to complete a quote when the language is unclear when explaining an insurance claim to a policyholder, or because the app has sent the user back to a call centre after they have

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Business economics

Monopolistic Competition: How Small Differences Create Real Pricing Power

Small differences between products can give sellers real pricing power, even when competing products appear almost identical. This is known as product differentiation, the practice of making a product distinct from its competitors through features, quality, design, branding or customer experience. When many firms use these differences to compete while

A sign signaling the pick-up location for ride share drivers, who are a major component of the gig economy.

The Gig Worker’s Dilemma: Flexibility vs. Stability

Many people find the idea of working whatever hours they choose to be appealing. Essentially, they get to be their own boss! However, unwary workers may quickly discover some disadvantages of being part of the gig economy. Why might they struggle?

Online gamers can spend significant sums of money through in-game purchases, raising questions about behavioral nudges and gaming.

The Free-to-Play Game Economy: Selling Pixels for Billions

Today's gamers can make purchases within video games themselves, buying lives, equipment, appearance packages, etc. How much economic impact does this online market have, and should we be concerned about the potential for online gaming addiction?

Thousands of content creators post daily on YouTube, TikTok, and other social media sites in hopes of "going viral."

The Economics of “Going Viral”: Attention as a Scarce Resource

They say that everyone wants to be famous. Today, virtually anyone can, thanks to social media. However, there are high costs of trying to master the algorithms to create the most desirable content. What are the economic costs and benefits of trying to "go viral" online?

Electricity transmission tower against a sunset sky, representing power grid capacity

Global economics

The Economics of Idle Capacity: Why Paying for What You Don't Use Can Be Rational

In a typical market economy, transactions usually occur when one party has exchanged money for an actual product/service. However, considerable amounts of capital are spent on infrastructure, including but not limited to telecommunications (telecoms), health care and defence, where capital is invested for the opportunity to receive something in