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Search Cost
Search costs are a facet of transaction costs or switching costs and include all the costs associated with the searching activity conducted by a prospective seller and buyer in a market. Rational consumers will continue to search for a better product or service until the marginal cost of searching exceeds the marginal benefit. Search theory is a branch of microeconomics that studies decisions of this type. The costs of searching are divided into external and internal costs. External costs include the monetary costs of acquiring the information, and the opportunity cost of the time taken up in searching. External costs are not under the consumer's control, and all he or she can do is choose whether or not to incur them. Internal costs include the mental effort given over to undertaking the search, sorting the incoming information, and integrating it with what the consumer already knows. Internal costs are determined by the consumer's ability to undertake the search, and this in turn ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Transaction Cost
In economics and related disciplines, a transaction cost is a cost in making any economic trade when participating in a market. Oliver E. Williamson defines transaction costs as the costs of running an economic system of companies, and unlike production costs, decision-makers determine strategies of companies by measuring transaction costs and production costs. Transaction costs are the total costs of making a transaction, including the cost of planning, deciding, changing plans, resolving disputes, and after-sales. Therefore, the transaction cost is one of the most significant factors in business operation and management. Oliver E. Williamson's ''Transaction Cost Economics'' popularized the concept of transaction costs. Douglass C. North argues that institutions, understood as the set of rules in a society, are key in the determination of transaction costs. In this sense, institutions that facilitate low transaction costs, boost economic growth.North, Douglass C. 1992. “Tran ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer. Usually, the price also includes a mark-up for profit over the cost of production. More generalized in the field of economics, cost is a metric that is totaling up as a result of a process or as a differential for the result of a decision. Hence cost is the metric used in the standard modeling paradigm applied to economic processes. Costs (pl.) are often further described based on thei ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Ingemar Ståhl
Ingemar Ståhl (June 2, 1938 – February 6, 2014) was a Swedish economist and an economics professor from Lund University. Life Ståhl was born on June 2, 1938, in Stockholm, Sweden. He graduated, with a bachelor degree, in 1958 in the University of Stockholm. He earned his Licentiate of Philosophy in 1965 at the Lund University. Ståhl was married to Solveig Ståhl, whom he had three children: Nils Ståhl, Pernilla Ståhl, and Ingela Ståhl. He died on February 6, 2014, in Lund, Sweden at the age of 75. Career For 25 years, Ståhl was a member of Ragnar Söderberg Foundation, an organization dedicated to scientific researches. Ståhl has also worked as an Advisor to the Cabinet Office of the Government of Sweden and the Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 3 ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Homogeneity And Heterogeneity
Homogeneity and heterogeneity are concepts often used in the sciences and statistics relating to the uniformity of a substance or organism. A material or image that is homogeneous is uniform in composition or character (i.e. color, shape, size, weight, height, distribution, texture, language, income, disease, temperature, radioactivity, architectural design, etc.); one that is heterogeneous is distinctly nonuniform in at least one of these qualities. Heterogeneous Mixtures, in chemistry, is where certain elements are unwillingly combined and, when given the option, will separate. Etymology and spelling The words ''homogeneous'' and ''heterogeneous'' come from Medieval Latin ''homogeneus'' and ''heterogeneus'', from Ancient Greek ὁμογενής (''homogenēs'') and ἑτερογενής (''heterogenēs''), from ὁμός (''homos'', “same”) and ἕτερος (''heteros'', “other, another, different”) respectively, followed by γένος (''genos'', “kind”); - ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price Dispersion
In economics, price dispersion is variation in prices across sellers of the same item, holding fixed the item's characteristics. Price dispersion can be viewed as a measure of trading frictions (or, tautologically, as a violation of the law of one price). It is often attributed to consumer search costs or unmeasured attributes (such as the reputation) of the retailing outlets involved. There is a difference between price dispersion and price discrimination. The latter concept involves a single provider charging different prices to different customers for an identical good. Price dispersion, on the other hand, is best thought of as the outcome of many firms potentially charging different prices, where customers of one firm find it difficult to patronize (or are perhaps unaware of) other firms due to the existence of search costs. Price dispersion measures include the range of prices, the percentage difference of highest and lowest price, the standard deviation of the price dist ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monopoly Price
A monopoly price is set by a monopoly.Roger LeRoy Miller, ''Intermediate Microeconomics Theory Issues Applications, Third Edition'', New York: McGraw-Hill, Inc, 1982.Tirole, Jean, "The Theory of Industrial Organization", Cambridge, Massachusetts: The MIT Press, 1988. A monopoly occurs when a firm lacks any viable competition and is the sole producer of the industry's product. Because a monopoly faces no competition, it has absolute market power and can set a price above the firm's marginal cost. Since marginal cost is the increment in total cost required to produce an additional unit of the product, the firm can make a positive economic profit if it produces a greater quantity of the product and sells it at a lower price. The monopoly ensures a monopoly price exists when it establishes the quantity of the product. As the sole supplier of the product within the market, its sales establish the entire industry's supply within the market, and the monopoly's production and sales decision ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Law Of One Price
The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices and prices can freely adjust), identical goods sold in different locations must sell for the same price when prices are expressed in a common currency. This law is derived from the assumption of the inevitable elimination of all arbitrage. Overview The intuition behind the law of one price is based on the assumption that differences between prices are eliminated by market participants taking advantage of arbitrage opportunities. Example in regular trade Assume different prices for a single identical good in two locations, no transport costs, and no economic barriers between the two locations. Arbitrage by both buyers and sellers can then operate: buyers from the expensive area can buy in the cheap area, and sellers in the cheap area ca ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economy
An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of scarce resources'. A given economy is a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure, legal systems, and natural resources as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of interrelated human practices and transactions that does not stand alone. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two groups or parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. Ho ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Agent (economics)
In economics, an agent is an actor (more specifically, a decision maker) in a model of some aspect of the economy. Typically, every agent makes decisions by solving a well- or ill-defined optimization or choice problem. For example, ''buyers'' (consumers) and ''sellers'' ( producers) are two common types of agents in partial equilibrium models of a single market. Macroeconomic models, especially dynamic stochastic general equilibrium models that are explicitly based on microfoundations, often distinguish households, firms, and governments or central banks as the main types of agents in the economy. Each of these agents may play multiple roles in the economy; households, for example, might act as consumers, as workers, and as voters in the model. Some macroeconomic models distinguish even more types of agents, such as workers and shoppers or commercial banks. The term ''agent'' is also used in relation to principal–agent models; in this case, it refers specifically to some ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Empiricism
In philosophy, empiricism is an epistemological theory that holds that knowledge or justification comes only or primarily from sensory experience. It is one of several views within epistemology, along with rationalism and skepticism. Empiricism emphasizes the central role of empirical evidence in the formation of ideas, rather than innate ideas or traditions. However, empiricists may argue that traditions (or customs) arise due to relations of previous sensory experiences. Historically, empiricism was associated with the "blank slate" concept (''tabula rasa''), according to which the human mind is "blank" at birth and develops its thoughts only through experience. Empiricism in the philosophy of science emphasizes evidence, especially as discovered in experiments. It is a fundamental part of the scientific method that all hypotheses and theories must be tested against observations of the natural world rather than resting solely on ''a priori'' reasoning, intuition, or ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monopoly
A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a specific person or enterprise is the only supplier of a particular thing. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market. Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit. The verb ''monopolise'' or ''monopolize'' refers to the ''process'' by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a busine ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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