Archives: Terms

Definition of Subgame Subgame is a concept in game theory that refers to a part of an extensive game which constitutes a game in itself. A subgame starts at a decision node (not at the beginning of the game) and includes all the subsequent decisions and payoffs from that node […]

Definition of Subcontracting Subcontracting refers to the practice where a main contractor, often general contractors or prime contractors, hires another company or individual, known as a subcontractor, to perform specific tasks or services within a larger project. This arrangement helps the main contractor delegate portions of a project that require […]

Definition of Stylized Facts Stylized facts refer to empirical findings that are consistently observed across a wide range of time periods and settings. These facts are simplified representations of reality, capturing the essential patterns and trends in economic and social data without getting bogged down by every minor detail or […]

Definition of Student’s t-distribution Student’s t-distribution, often simply referred to as the t-distribution, is a type of probability distribution that is symmetric and bell-shaped, but it has heavier tails compared to a normal distribution. This characteristic makes the t-distribution particularly useful when working with small sample sizes, as it provides […]

Definition of Structure-Conduct-Performance The Structure-Conduct-Performance (SCP) paradigm is an analytical framework used in industrial organization economics to examine how the market structure of an industry influences the behavior (conduct) of firms within that industry, and in turn, how this behavior determines economic performance. This model suggests a causal relationship flowing […]

Definition of Structural Transformation Structural transformation refers to the long-term process of shifting the economic structure of a nation or region from one dominated by primary and traditional industries, such as agriculture, to one characterized by higher productivity and diversified sectors like manufacturing and services. This process is essential for […]

Definition of Structural Funds Structural Funds refer to financial tools set up by the European Union (EU) to support economic development and cohesion within its member states. These funds are aimed at reducing disparities in wealth and development between different regions within the EU. Structural Funds are a major component […]

Definition of Structural Equation Modeling (SEM) Structural Equation Modeling (SEM) is a comprehensive statistical approach used to test hypotheses about relationships among observed and latent variables. It extends and integrates aspects of multiple regression analysis and factor analysis. SEM allows the examination of complex models involving multiple dependent variables and […]

Definition of Strongly Stationary Process A strongly stationary process, also known simply as a stationary process, is a stochastic process whose statistical properties, such as mean, variance, and autocorrelation, do not change over time. In other words, a process is strongly stationary if its joint probability distribution is invariant under […]

Definition of Strike Price The strike price, also known as the exercise price, is the fixed price at which the owner of an option can buy (for a call option) or sell (for a put option) the underlying asset or security when the option is exercised. This price is predetermined […]