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Residual Claimant
The residual claimant refers to the economic agent who has the sole remaining claim on an organization's net cash flows, i.e. after the deduction of precedent agents' claims, and therefore also bears the residual risk. Residual risk is defined in this context as the risk associated with differences between the stochastic inflows of assets into the organization and precedent agents' claims on the organization's cash flows. Precedent agents' claims on an organization's cash flows can consist of e.g. employees' salaries, creditors' interest or the government's taxes. The concept of the residual claimant has been the subject of as well as used in over 8,000 scholarly articles, notably in law and economics, information economics and corporate finance. Its use can be traced back to the late 19th century and Francis Amasa Walker's 'residual claimant theory', which argues that in the distribution of wealth among profits, rent, interest and wages, the laborer is the residual claimant and w ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Law And Economics
Law and economics, or economic analysis of law, is the application of microeconomic theory to the analysis of law. The field emerged in the United States during the early 1960s, primarily from the work of scholars from the Chicago school of economics such as Aaron Director, George Stigler, and Ronald Coase. The field uses economics concepts to explain the effects of laws, assess which legal rules are economically efficient, and predict which legal rules will be promulgated. There are two major branches of law and economics; one based on the application of the methods and theories of neoclassical economics to the positive and normative analysis of the law, and a second branch which focuses on an institutional analysis of law and legal institutions, with a broader focus on economic, political, and social outcomes, and overlapping with analyses of the institutions of politics and governance. History Origin The historical antecedents of law and economics can be traced back to ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Information Economics
Information economics or the economics of information is the branch of microeconomics that studies how information and information systems affect an economy and economic decisions. One application considers information embodied in certain types of commercial products that are "expensive to produce but cheap to reproduce." Samuelson, Paul A., and William D. Nordhaus (2001). Economics, p.194. Examples include computer software (e.g., Microsoft Windows), pharmaceuticals and technical books. Once information is recorded "on paper, in a computer, or on a compact disc, it can be reproduced and used by a second person essentially for free." Without the basic research, initial production of high-information commodities may be too unprofitable to market, a type of market failure. Government subsidization of basic research has been suggested as a way to mitigate the problem. The subject of "information economics" is treated under ''Journal of Economic Literature'' classification code ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Corporate Finance
Corporate finance is an area of finance that deals with the sources of funding, and the capital structure of businesses, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to Shareholder value, maximize or increase valuation (finance), shareholder value.SeCorporate Finance: First Principles Aswath Damodaran, New York University's Stern School of Business Correspondingly, corporate finance comprises two main sub-disciplines. Capital budgeting is concerned with the setting of criteria about which value-adding Project#Corporate finance, projects should receive investment funding, and whether to finance that investment with ownership equity, equity or debt capital. Working capital management is the management of the company's monetary funds that deal with the short-term operating balance of current assets and Current liability, cu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Francis Amasa Walker
Francis Amasa Walker (July 2, 1840 – January 5, 1897) was an American economist, statistician, journalist, educator, academic administrator, and an officer in the Union Army. As a prolific author and the third president of the Massachusetts Institute of Technology (MIT) until his death in 1897, Walker was a leading political economist and advocate for a policy of bimetallism by international agreement. His scholarly contributions are widely recognized as having broadened, liberalized, and modernized economic and statistical theory with contributions to wages, wealth distribution, money, and social economics, and he is credited with developing the residual theory of wage distribution. Walker was born into a prominent Boston family, the son of the economist and politician Amasa Walker, and he graduated from Amherst College at the age of 20. He received a commission to join the 15th Massachusetts Infantry and quickly rose through the ranks as an assistant adjutant general. Wal ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Simon Patten
Simon Nelson Patten (May 1, 1852 – July 24, 1922) was an American economist and the chair of the Wharton School of Business at the University of Pennsylvania. Patten was one of the first economists to posit a shift from an 'economics of scarcity' to an ' economics of abundance'; that is, he believed that soon there would be enough wealth to satisfy people's basic needs and that the economy would shift from an emphasis on production to consumption. Life and work Patten was born in Sandwich, Illinois. Patten attended the University of Halle (1876–1879), where he came under the influence of Johannes Conrad, a member of the German Historical school, a group of economists who believed that scholars should use their expertise to help solve modern social problems. His German experience reinforced his belief in social reform and planned change, but within an American context—that is, change and reform through voluntary action with minimal governmental control. After several y ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jacob Hollander
Jacob Harry Hollander (1871–1940) was an American economist. Biography Hollander was born in Baltimore, Maryland. He graduated from Johns Hopkins University with a BA in 1891, and a PhD in 1894. He became associate professor of finance there. In 1900, he became assistant professor of political economy, becoming full professor in 1904. He was appointed secretary to the Bimetallism, Bimetallic Commission of 1897. William McKinley, US President McKinley named him Treasurer of the island of Puerto Rico in 1900. He resigned in 1901 after introducing a Hollander tax, tax system. He was special commissioner to investigate financial conditions in Haiti, San Domingo and until 1908 was financial advisor of the Dominican Republic. He also was an official arbitrator in various labour disputes. Works His contributions to David Ricardo, Ricardo scholarship are considerable. He edited the ''Letters of David Ricardo to John Ramsey McCulloch, J. R. McCulloch'' (1895) and (together with James B ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
James Bonar (civil Servant)
James Bonar (27 September 1852 – 18 January 1941) was a Scottish civil servant, political economist and historian of economic thought. Biography He was born in Perth. He was brought up, from the age of four, in Glasgow where his father was a Church of Scotland Minister. This clerical background extends to two uncles, both ministers who 'came out' in the disruption of 1843, both later serving terms as Moderator of the Free Church General Assembly. From Glasgow Academy Bonar graduated MA in Mental Philosophy from Glasgow University in 1874. He followed the same lengthy undergraduate career that Adam Smith pursued more than a century before gaining a Snell Exhibition to Balliol College, Oxford from which he graduated with a first in 1877. A major early influence was the moral philosopher, Edward Caird: first as Professor at Glasgow and then as Master of Balliol. Together with his family background that influence helps explain Bonar's decision to spend the next three years ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Moral Hazard
In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs associated with that risk, should things go wrong. For example, when a corporation is insured, it may take on higher risk knowing that its insurance will pay the associated costs. A moral hazard may occur where the actions of the risk-taking party change to the detriment of the cost-bearing party after a financial transaction has taken place. Moral hazard can occur under a type of information asymmetry where the risk-taking party to a transaction knows more about its intentions than the party paying the consequences of the risk and has a tendency or incentive to take on too much risk from the perspective of the party with less information. One example is a principal–agent approach (also called agency theory), where one party, called an agent, acts on behalf of another party, called the principal. However, a principa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Information Asymmetry
In contract theory, mechanism design, and economics, an information asymmetry is a situation where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can sometimes cause the transactions to be inefficient, causing market failure in the worst case. Examples of this problem are adverse selection, moral hazard,Dembe, Allard E. and Boden, Leslie I. (2000). "Moral Hazard: A Question of Morality?" New Solutions 2000 10(3). 257–79 and monopolies of knowledge. A common way to visualise information asymmetry is with a scale, with one side being the seller and the other the buyer. When the seller has more or better information, the transaction will more likely occur in the seller's favour ("the balance of power has shifted to the seller"). An example of this could be when a used car is sold, the seller is likely to have a much better understanding of the car's condition and hence its market value than the buy ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Principal–agent Problem
The principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity (the " agent") takes actions on behalf of another person or entity (the " principal"). The problem worsens when there is a greater discrepancy of interests and information between the principal and agent, as well as when the principal lacks the means to punish the agent. The deviation from the principal's interest by the agent is called " agency costs".''Pay Without Performance'', Lucian Bebchuk and Jesse Fried, Harvard University Press 2004preface and introduction) Common examples of this relationship include corporate management (agent) and shareholders (principal), elected officials (agent) and citizens (principal), or brokers (agent) and markets (buyers and sellers, principals). In all these cases, the principal has to be concerned with whether the agent is acting in the best interest of the principal. Principal-agent models typically either examine moral ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Herbert Gintis
Herbert Gintis (February 11, 1940 – January 5, 2023) was an American economist, behavioral scientist, and educator known for his theoretical contributions to sociobiology, especially altruism, cooperation, epistemic game theory, gene-culture coevolution, efficiency wages, strong reciprocity, and human capital theory. Throughout his career, he worked extensively with economist Samuel Bowles (economist), Samuel Bowles. Their landmark book, ''Schooling in Capitalist America: Educational Reform and the Contradictions of Economic Life, Schooling in Capitalist America'', had multiple editions in five languages since it was first published in 1976. Their book, ''A Cooperative Species: Human Reciprocity and its Evolution'' was published by Princeton University Press in 2011. Early life and education Gintis was born in Philadelphia, Pennsylvania, where his father had a retail furniture business. He grew up there and later in Bala Cynwyd (just outside Philadelphia). Gintis completed his ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
