History matters. Where you have been in the past determines where you are now and where you can go in future. Indeed, even small, apparently trivial, differences in the path you have taken can have huge consequences for where you are and can go. In Economics, path dependence refers to the way in which apparently [...]
Losses hurt more than gains feel good.
Pareto efficiency, or Pareto optimality, is an economic state where resources cannot be reallocated to make one individual better off without making at least one individual worse off. Named after Vilfredo Pareto, an Italian economist it is founded on the basis that if an economy’s resources are being used inefficiently, it ought to be possible [...]