Economic Entity
An Economic Entity is a market participant that performs economic acts (through market mechanisms and economic decisions).
- AKA: Economic Agent, Economic Actor, Market Entity, Economic Unit, Economic Party.
- Context:
- It can (typically) engage in Market Transactions through exchange mechanisms.
- It can (typically) manage Economic Resources through allocation systems.
- It can (typically) generate Economic Value through production processs.
- It can (typically) make Economic Decisions through choice mechanisms.
- It can (typically) assume Financial Risk through market participation.
- It can (typically) respond to Market Signals through price mechanisms.
- It can (typically) maintain Economic Accounts through accounting systems.
- It can (typically) own Economic Assets through property rights.
- It can (typically) incur Economic Debts through financing mechanisms.
- It can (often) establish Market Positions through competitive strategy.
- It can (often) form Economic Relationships through business networks.
- It can (often) pursue Economic Objectives through strategic planning.
- It can (often) adapt to Market Changes through economic adjustments.
- It can (often) influence Market Dynamics through economic behavior.
- It can (often) exhibit Agent Preferences through economic reasoning.
- It can (often) operate within multiple Economic Sectors through sector participation.
- ...
- It can range from being a Small Economic Entity to being a Large Economic Entity, depending on its operational scale.
- It can range from being a Simple Economic Entity to being a Complex Economic Entity, depending on its organizational structure.
- It can range from being a Local Economic Entity to being a Global Economic Entity, depending on its market reach.
- It can range from being a Market Price Taker to being a Market Price Maker, depending on its market power.
- It can range from being a Profit Maximizer to being a Utility Maximizer, depending on its economic objective.
- It can range from being a Rational Economic Agent to being an Irrational Economic Agent, depending on its decision behavior.
- It can range from being a Low-Income Agent to being a High-Income Agent, depending on its economic resources.
- It can range from being a Buyer to being a Seller, depending on its market role.
- ...
- Examples:
- Business Entitys, such as:
- Commercial Enterprises, such as:
- Financial Entitys, such as:
- Individual Economic Actors, such as:
- Public Economic Entitys, such as:
- Non-Profit Economic Entitys, such as:
- International Economic Entitys, such as:
- AI-Based Economic Entitys, such as:
- ...
- Business Entitys, such as:
- Counter-Examples:
- Social Entitys, which focus on social interactions rather than economic exchange.
- Political Entitys, which primarily serve governance functions rather than economic functions.
- Cultural Entitys, which primarily promote cultural values rather than economic value.
- Environmental Entitys, which focus on ecological preservation rather than economic activity.
- Academic Entitys, which primarily pursue knowledge creation rather than economic objectives.
- Game Players, which perform game acts rather than economic acts.
- Natural Phenomenons, which affect economic conditions but lack agency.
- See: Market Economy, Economic System, Market Participant, Economic Behavior, Market Structure, Economic Institution, Business Organization, Financial Entity, Public Entity, Utility Function, Rational Choice Theory, Market Efficiency, Economic Model, Agent-Based Economics.
References
2013
- http://plato.stanford.edu/entries/game-theory/#Util
- QUOTE: … An economic agent is, by definition, an entity with preferences. Game theorists, like economists and philosophers studying rational decision-making, describe these by means of an abstract concept called utility.
2012
- http://en.wikipedia.org/wiki/Agent_%28economics%29
- In economics, an agent is an actor and decision maker in a model. Typically, every agent makes decisions by solving a well- or ill-defined optimization/choice problem.
For example, buyers and sellers 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[1] or commercial banks.[2]
The term agent is also used in relation to principal–agent models; in this case it refers specifically to someone delegated to act on behalf of a principal.[3]
In Agent-based computational economics, the concept of an agent has been more broadly interpreted to be any persistent individual, social, biological, or physical entity interacting with other such entities within the context of a dynamic multi-agent economic system.
- In economics, an agent is an actor and decision maker in a model. Typically, every agent makes decisions by solving a well- or ill-defined optimization/choice problem.
- ↑ Robert Lucas, Jr.,(1980), 'Equilibrium in a pure currency economy'. Economic Inquiry 18 (2), pp. 203-20.
- ↑ Timothy S. Fuerst (1992), 'Liquidity, loanable funds, and real activity'. Journal of Monetary Economics 29 (1), pp. 3-24.
- ↑ Joseph E. Stiglitz (1987). “Principal and agent", The New Palgrave: A Dictionary of Economics, v. 3, pp. 966-71.
2009
- (Ariely, 2009) ⇒ Dan Ariely. (2009). “Predictably Irrational: The Hidden Forces That Shape Our Decisions - revised and expanded edition." Harper-Collins New York. ISBN:978-0-06-135323-9
- QUOTE: Neoclassical economics is built on very strong assumptions that, over time, have become “established facts.” Most famous among these are that all economic agents (consumers, companies, etc., are fully rational, and that the so-called invisible hand works to create market efficiency). To rational economists, these assumptions seem so basic, logical, and self-evident that they do not need any empirical scrutiny.