Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
An account already exists for this email address, please log in.
Jargon-watch: Microeconomists
Rory McConville demystifies the work of microeconomists – what individuals, households and companies do with their money.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
On an individual level, a microeconomist analyses something like supply and demand patterns in markets to help determine how much your cup of coffee should cost.
In the old days, when AT&T had a monopoly on America's telecommunications networks, "economists were instrumental in providing the intellectual rationale for the Justice Department's landmark filing of that lawsuit, and just as important, of the relief the government sought: breakup of Ma Bell's' control over both long-distance and local telephony." Now exposed to competition, AT&T began laying fibre optic cables across the country in a bid to stay ahead. These cables would go on to form "the backbone of the internet".
But unfortunately, microeconomists haven't always been getting that much credit compared to the macroeconomists.
So what's changing?
Companies such as SmarterTravel, a subsidiary of Tripadvisor, use microeconomists to study key areas of their business. "When a user lands on its website an economist-designed algorithm kicks into action. Data, including the time taken between clicks, help predict whether the user is a browsing time-waster or a potential buyer. The site is adjusted in millisecondsbrowsers see more adverts, buyers a simpler site to focus on their purchaseto maximise profit," says The Economist.
Sign up for MoneyWeek's newsletters
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
