Archives: Terms

Definition of Bounded Rationality Bounded rationality is a concept that suggests individuals are limited in their capacity to process information, to understand all available choices, and to calculate the most optimal decisions. This term acknowledges that while individuals aim to make rational choices, their cognitive limitations and the complexity of […]

Definition of Borrower A borrower is an individual, corporation, or other entity that takes out a loan from a lender with the promise of returning the borrowed sum plus interest within a specified period. The act of borrowing creates a financial obligation on the part of the borrower to repay […]

Definition of Boots Theory Boots theory is an informal economic principle suggesting that less wealthy individuals often incur higher costs over time for certain goods due to the necessity of buying lower-quality items. This idea is based on the paradox that spending more money upfront on a higher-quality, more expensive […]

Definition of Bondareva–Shapley Theorem The Bondareva–Shapley theorem is a fundamental result in cooperative game theory, highlighting conditions under which a cooperative game has a non-empty core. In essence, the theorem delineates the criteria necessary for stability within a coalition, ensuring that no subset of players has an incentive to deviate […]

Definition of Board of Governors The Board of Governors refers to the leading body or council of an organization, institution, or country that oversees its operation and ensures its compliance with its objectives and policies. In the context of central banks, such as the Federal Reserve in the United States, […]

Definition of the Black–Scholes Model The Black–Scholes model is a mathematical model used for pricing European call and put options and financial instruments that can be synthesized from them. Developed in 1973 by Fischer Black, Robert Merton, and Myron Scholes, this model revolutionized the field of financial economics by providing […]

Definition of Bishop–Cannings Theorem The Bishop–Cannings theorem is a principle in evolutionary game theory that specifically addresses the strategy dynamics in symmetric two-player games. It states that if a strategy is in equilibrium (meaning that it is a best response to itself and to other strategies in the population), then […]

Definition of Birmingham School The Birmingham School, also known as the Birmingham School of Cultural Studies, refers to a group of researchers affiliated with the Centre for Contemporary Cultural Studies (CCCS) at the University of Birmingham in the United Kingdom. Founded in 1964, this school played a pivotal role in […]

Definition of Big Push Model The Big Push Model is a concept in development economics that argues substantial and coordinated efforts (a “big push”) are necessary across multiple sectors to overcome the barriers that keep economies from experiencing growth. This theory suggests that in order for underdeveloped economies to break […]

Definition of Biflation Biflation is an economic condition characterized by the simultaneous occurrence of inflation and deflation in different parts of the economy. Inflation refers to the general rise in prices of goods and services, reducing purchasing power over time, whereas deflation is characterized by a decrease in the general […]