- •Professions and career
- •Choosing a career
- •My future career (business economics)
- •Vocabulary:
- •The profession of an economist
- •Professions
- •By country
- •United Kingdom
- •Three types of economists
- •Vocabulary
- •Engineering economics
- •The future of economics
- •Uncertainty and Game Theory
- •Market failure
- •Public Sector
- •Macroeconomics
- •Business cycle
- •International economics
- •Practice
- •Empirical investigation
- •Related subjects
- •At the company
- •Management
- •Vocabulary
- •Key Traits of Successful Leaders
- •A Few Tips of Marketing in General
- •Competition
- •Key Traits of Successful Leaders
- •Vocabulary
- •Vocabulary
- •6.2 Entrepreneurship
- •6.3 Company
- •Holding company
- •6.5 Bankruptcy
- •6.6 Capable Management
- •2. A few explanations to the text
- •3. Key vocabulary and expressions
- •4. Speaking practice. Read and speak on the problem raised by the practitioners.
- •5. Translate the proverbs. Find exact Russian equivalents for them.
- •6. Discuss with your partner the situations raised in the proverbs
- •6.7 People Are the Heart of Every Business
- •On Management in Russia
- •6.9 Marketing and Advertising
- •6.10 Qualities of a good manager
- •III. Effective business communication
- •Business Ethics (a)
- •2. Business Ethics (b)
- •Read and learn new words
- •How to Effectively Manage the People (Business Etiquette)
- •How Not to Behave Badly Abroad
- •Holding Meetings
- •Разговор по телефону
- •IV. Business Papers and Documents
- •1. The Contract
- •2. Contract and its Performance
- •3. Contract Law
- •4. The Assumption of Contractual Obligations
- •The Performance of Contractual Obligations
- •Sanctions for Non-Fulfillment of Contractual Obligations
- •A Business Letter
- •Job Application
- •Job opportunity: Executive Secretary to the Managing Director
- •Управляющему директору требуется исполнительный секретарь
- •Образец № 2
- •Образец № 3
- •Принятие предложения о работе Accepting an Position
- •Образец № 1 Model № 1
- •Отказ работодателя на заявление о работе
- •Образец № 1 Model № 1
- •Образец № 2
- •Resume & Curriculum Vitae (cv)
- •Образец № 1 Model № 1 resume
- •Curriculum Vitae
- •Рекомендательное письмо и характеристика
- •Образец № 2
- •Образец № 2
- •Образец № 3
- •Характеристика
- •Образец № 1
- •5. Уход с работы
- •6. Увольнение работника и сокращение штатов
- •Образец № 1
- •Образец № 2
- •Меморандум, или памятная записка
- •Образец № 1 Model № 1 memo
- •Образец № 2
- •Образец № 3 Model № 3 memo
- •8. Запрос информации
- •Information Inquiry
- •Образец № 1 Model № 1
- •Образец № 2 Model № 2
- •Ответ на запрос информации
- •Образец № 1
- •V. Business trips
- •Traveling. Means of traveling
- •Add to your Active Vocabulary
- •1. Find in the text the English equivalents for the following:
- •2. Answer the following questions:
- •Stuck in an Airport?
- •At a hotel
- •Vocabulary Notes
- •Add to your active vocabulary:
- •Vocabulary Notes
- •Заказ места в гостинице
- •В гостинице
- •В ресторане
- •Поездка в автобусе
- •Покупка билета
- •На вокзале
- •Always Be Certain to Know Who's Gaining on You Know Who Are You Up Against
- •Internal operational factors
Uncertainty and Game Theory
(Information economics, Game theory, and Financial economics)
Uncertainty in economics is an unknown prospect of gain or loss, whether quantifiable as risk or not. Without it, household behavior would be unaffected by uncertain employment and income prospects, financial and capital markets would reduce to exchange of a single instrument in each market period, and there would be no communications industry. Given its different forms, there are various ways of representing uncertainty and modelling economic agents' responses to it.[42]
Game theory is a branch of applied mathematics that considers strategic interactions between agents, one kind of uncertainty. It provides a mathematical foundation of industrial organization, discussed above, to model different types of firm behavior, for example in an oligopolistic industry (few sellers), but equally applicable to wage negotiations, bargaining, contract design, and any situation where individual agents are few enough to have perceptible effects on each other. As a method heavily used in behavioral economics, it postulates that agents choose strategies to maximize their payoffs, given the strategies of other agents with at least partially conflicting interests. In this, it generalizes maximization approaches developed to analyze market actors such as in the supply and demand model and allows for incomplete information of actors. The field dates from the 1944 classic Theory of Games and Economic Behavior by John von Neumann and Oskar Morgenstern. It has significant applications seemingly outside of economics in such diverse subjects as formulation of nuclear strategies, ethics, political science, and evolutionary biology.
Risk aversion may stimulate activity that in well-functioning markets smooths out risk and communicates information about risk, as in markets for insurance, commodity futures contracts, and financial instruments. Financial economics or simply finance describes the allocation of financial resources. It also analyzes the pricing of financial instruments, the financial structure of companies, the efficiency and fragility of financial markets, financial crises, and related government policy or regulation.
Some market organizations may give rise to inefficiencies associated with uncertainty. Based on George Akerlof's "Market for Lemons" article, the paradigm example is of a dodgy second-hand car market. Customers without knowledge of whether a car is a "lemon" depress its price below what a quality second-hand car would be. Information asymmetry arises here, if the seller has more relevant information than the buyer but no incentive to disclose it. Related problems in insurance are adverse selection, such that those at most risk are most likely to insure (say reckless drivers), and moral hazard, such that insurance results in riskier behavior (say more reckless driving). Both problems may raise insurance costs and reduce efficiency in driving otherwise willing transactors from the market ("incomplete markets"). Moreover, attempting to reduce one problem, say adverse selection by mandating insurance, may add to another, say moral hazard. Information economics, which studies such problems, has relevance in subjects such as insurance, contract law, mechanism design, monetary economics, and health care. Applied subjects include market and legal remedies to spread or reduce risk, such as warranties, government-mandated partial insurance, restructuring or bankruptcy law, inspection, and regulation for quality and information disclosure.