Economics Online (Page 9)

Economics Online

The Economics of Social Status: Why We Pay More for Less

Veblen goods are luxury goods that violate the Law of Demand, which states that quantity demanded of a good falls as price rises. Veblen goods actually become more popular as prices increase. Why is this the case? Can the purchase of such goods be reasonable?

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Information Failure

Transaction Costs, Information Asymmetry, and the Rise of Online Legal Services

In economic theory, transaction costs are the expenses incurred when participating in a market beyond just what the good or service costs. Transaction costs include finding information, negotiating the terms of the agreement, and enforcing the agreed terms. Transaction costs have historically meant that small businesses could not afford to

Two people sitting at a desk on laptops inside a meeting room. One man is talking with his hand raised up, palm-first like he is in a heated discussion.

Business economics

Moral Hazard in Outsourced Marketing Contracts

When an organisation outsources its marketing function to a brand activation agency, a traditional principal-agent relationship exists between the client and the agency. Moral hazard arises because the principal cannot fully observe the agency's level of effort or the efficiency with which it manages the marketing budget. Because

A calculator and a handful of Euro bills lie scattered on top of printouts of graphs and charts on top of a desk

Behavioural economics

What Unresolved Account Activity Means for a Personal Budget

Households make spending decisions based not only on how much income they receive, but also on how certain they are about the resources available to them. Consumption smoothing theory explains why individuals attempt to maintain stable consumption over time by adjusting their savings, borrowing, and asset holdings in response to

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Behavioural economics

Why are gaming skins so expensive? It's the Veblen good effect

According to a recent GWI survey on gaming monetization trends, the average American gamer spends about $18.60 a month on in-game purchases, with the majority of those purchases providing no advantage to players in terms of winning (in-game) whatsoever. The usage of skins in video games is similar to

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Business economics

Why Web Hosting Providers Purposefully Limit Cheapest Package

According to W3Techs, as of July 2026, WordPress powers 41.2% of all websites on the internet. The plans that customers purchase for their WordPress hosted website are responsible for a large segment of the web. Upon viewing these available plans, the biggest question is: why do the least expensive

Silver bullion coins from multiple countries arranged neatly on a smooth surface

Composite demand: why solar panels and silver coins compete for the same metal

Because both solar panels and silver coins compete with one another to use silver, they are competing for the same finite supply of silver available on the market. Silver is one of the world's most important industrial metals and is currently in a tug-of-war between factory and investor

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Product differentiation

Product differentiation turns commodity aluminium into a premium, corrosion-resistant metal

Although aluminium is a commodity on the world market, its electrochemical finish results in reduced exposure to commodity pricing. According to one industry estimate, the aluminium anodising industry was valued at approximately USD 3.04bn in 2025 and is forecast to grow to USD 5.50bn by 2035. This difference

Technician working inside data centre server room viewed through observation window

The cobweb model explains why the AI data-centre boom keeps running short of electricians

The cobweb model describes how the AI data centre boom continues to face a shortage of electricians. Currently, AI data centres in the United States are facing a severe shortage of electricians as demand continues to outstrip supply. The $6.7 trillion global data centre investment that McKinsey estimates by

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Business economics

Price Elasticity of Demand in Startup Formation Services

The pattern of business formation services has changed dramatically over the last decade. As prices have been decreasing over time, we can see that the effect of price on new businesses is growing significantly. This change in cost structure means that people who have never started a company before now

Main Economic Implications of SWOT Analysis for Web Development Company

Main Economic Implications of SWOT Analysis for Web Development Company

How can a company make smarter decisions in a fast-changing business environment? A SWOT analysis offers a great starting point. For companies in any industry, this framework supports clear, data-driven decisions that align with long-term goals.In this article, you’ll see how each component of SWOT analysis contributes to

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Competitive markets

Where Does Price Discovery Start in Index Markets

As with everything in life, determining a set price for any asset being exchanged is important to both buyers and sellers, and index markets are no exception. Here, involved parties go through a process called price discovery, which is extremely nuanced. Because price discovery is influenced by a number of

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operational-efficiency

Moral hazard costs the average firm about 5% of revenue a year — and governance software is how it fights back

The same dynamic plays out inside ordinary organisations. The Association of Certified Fraud Examiners estimates that companies lose roughly 5% of their annual revenue to occupational fraud. Employees are often able to take risks or bend rules because the costs are borne by the organisation rather than by the individual

Content creators with thousands of followers on social media platforms can monetize their posts by promoting products.

The Creator Economy: Why Attention Is the New Currency

If you can garner thousands of followers on your social media platforms, you can get paid to promote products through affiliate marketing and influencing opportunities. Is this a sustainable market for young people?

Artificial intelligence programs, commonly known as AI, allow computers to mimic human abilities.

AI and the Labor Market: Complement or Competitor?

Over the next five to ten years, many economists anxiously await the effects of AI expansion on labor markets. Which jobs are vulnerable to being mostly or entirely automated by AI? Which jobs will remain secure, using AI as a labor-saving tool?

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Real vs. Nominal Interest Rates: How Inflation Affects Your Savings

Earnings on savings accounts are eroded by inflation. For instance, inflation in Canada was 3.2% for the year ending May 2026 while traditional savings accounts at banks offered lower interest rates than this figure. The gap between these two finance concepts has been referenced as the Fisher Effect. Named

Many consumers purchase multiple Internet subscription services and forget to cancel ones they no longer use.

Buy It Now, Pay Forever? The Economics of Subscription Overload

Many consumers purchase several subscription services and fail to properly budget for them, leading to broken budgets. How does "subscription overload" affect our budgeting and spending, and why do firms push subscription models so heavily?

Two people inside of an office at a desk looking at a laptop and a larger desktop monitor

Business economics

Transaction Cost Economics and Financial Consolidation Software: Why Firms Invest in Digital Coordination

A similar fundamental challenge exists for all large organisations: how to coordinate increasingly complex activities while avoiding administrative costs that exceed the benefits generated by operational growth. A major area of economics that has greatly affected our current understanding of what motivates organisations to consolidate their financial operations has been

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Innovation & Technology

The Economics of Scaling an AI-Native Start-up

Artificial intelligence has substantially reduced the cost of starting a digital business. Founders can now research a market, build a prototype, produce content, automate customer support and reach international users with fewer employees and less initial capital. However, a lower cost of entry does not necessarily produce a lower cost

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Innovation & Technology

Vertical Differentiation: What Hotelling's Model Reveals About the SOCKS5 Proxy Market

Economists have had the same framework for many years to describe why companies in the same industry do not often compete solely on price: Harold Hotelling's formulation of spatial and product differentiation. Hotelling's initial insight was made in 1929 and it stated that generally firms that

Close-up of bracelets on a display stand with a blurred shopper in background

Behavioural economics

Why the income effect keeps Americans buying jewellery as real incomes stall

The income effect helps to explain why Americans are still buying jewellery for themselves rather than waiting to receive it as a gift, even as real disposable income growth has slowed (1.9% year-on-year through August 2025). In fact, 80% of adult Americans said that they had purchased jewellery for

Several loose diamonds displayed on a glossy black surface

Behavioural economics

Lab-grown diamonds are draining the signalling power from the engagement ring

Couples today have more choices than ever when purchasing an engagement ring, largely because of the rapid rise of lab-grown diamonds. While mined diamonds have traditionally symbolized commitment and romance, lab-grown alternatives are reshaping how couples think about both the financial and symbolic value of engagement rings. According to The

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Human Capital Formation: Why Economic Literacy Compounds Like Interest

For many years now, when looking at how well children's skills in reasoning about economics develop, whether these skills were acquired through early exposure or delayed instruction is taken into account by most economic theorists who study skill development. Gary Becker and Theodore Schultz are two of the

A trading screen showing colorful stock price line charts trending upward, with red and green data panels visible on an adjacent monitor.

7 Ways to Diversify Your Portfolio Beyond Traditional Assets

Most of us want to grow our wealth as best we can, and for many people this begins with investing in shares, bonds or cash savings. However, while these can play an important role in building your fortune, there is always a risk involved in relying on just one or

Calculator, coins, cash, and pen representing budgeting, savings, and financial planning

Financial Intermediation and Disintermediation: What Coase's Theory of the Firm Tells Us About Crypto Lending

Ronald Coase studied the concept of firms in economics in his 1937 article. The central question in Coase's investigation was whether firms would be necessary if market forces could effectively connect buyers and sellers. Coase's hypothesis was that the structure of a firm is determined by