Category Archives: Original Articles

What is Economics of Information?

Article Written by Zuleykha Gasimova


Economics of Information is a field of microeconomic theory which studies how the imperfect allocation of information affects economic analysis. If we examine the Neoclassical Theory, one of its main assumptions is that everyone has access to the same information (complete information) and everyone has perfect information about the prices of goods and services in the economy (perfect information).

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Behavioural Economics Series 2: Are Financial Markets Efficient?

The 2013 Nobel Prize in Economics was definitely a “weird” one. One recipient was Dr. Eugene Fama from UChicago, who proposed the Efficient Markets Hypothesis (EMH) (which contends that markets are efficient). Yet, on the other hand, professor Robert Shiller from Yale, a leading economist in Behavioural Finance (an area that explores how psychology engenders investors’ decisions to deviate from perfect rationality), also received the honor for his work in examining the irrationality of investors, among some of his other work [1].

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Behavioral Economics Series 1: Prospect Theory

Prospect Theory evaluates how individuals choose under risk and uncertainty, and aims to illustrate that sometimes choices are not optimal. This theory was first developed in 1979 by two psychologists, Amos Tversky and Daniel Kahneman, and a lot of behavioural economists later built on their work. In 2002, Professor Kahneman received the Nobel Prize in Economics for his work in Behavioural Economics (unfortunately, professor Tversky already passed away in 1996, and the Nobel Prize doesn’t award posthumously).

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