Hicksian vs Marshallian Demand: Two Curves, One Consumer
Hicksian vs Marshallian demand is the central duality of consumer theory. One holds income constant for empirical work; the other...
Microeconomics
Uncover individual economic decisions, supply-demand dynamics, and market behaviors that drive our world.
Repeated Games and Folk Theorem: How Cooperation Emerges Without Contracts
Repeated Games and Folk Theorem explains how patience, punishment, and reputation sustain cooperation when formal contracts cannot enforce behaviour.
Bayesian Games: Strategy Under Incomplete Information
Bayesian Games explain strategic choice under private information using types, priors, beliefs, and Bayesian Nash Equilibrium.
Subgame Perfect Equilibrium: Beyond Nash in Sequential Games
Subgame Perfect Equilibrium refines Nash equilibrium by requiring optimality in every subgame, eliminating non-credible threats in sequential strategic interactions.
Economics of Health Insurance: Adverse Selection and Moral Hazard
The Economics of Health Insurance explains how risk pools survive adverse selection and moral hazard, why the 2026 ACA subsidy...
Hotelling Rule: Pricing Non-Renewable Resources Over Time
The Hotelling Rule states that the net price of an exhaustible resource must rise at the real interest rate, the...
Capital Structure Decision: Modigliani-Miller in Practice
The Capital Structure Decision balances the tax shield from debt against bankruptcy costs and information frictions, producing real-world leverage ratios...
Dixit-Stiglitz Model: The Workhorse of Modern Trade and Macro
The Dixit-Stiglitz model of monopolistic competition uses CES preferences to show how market size determines product variety, explaining intra‑industry trade...
Stiglitz-Weiss Credit Rationing Model: Why Banks Do Not Just Raise Interest Rates
The Stiglitz-Weiss credit rationing model explains why banks deny loans at equilibrium rather than raising interest rates, due to adverse...
Engel Curve: How Spending Patterns Shift with Income
The engel curve traces how spending patterns shift with income, showing that food budget shares fall systematically as households grow...