Microeconomics of the 21st Century: New Opportunities in Fundamental Analysis

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Abstract

Changes in economic reality have led to new theories in the area of the microlevel market decision making mechanism. The key trends in research that deals with microeconomics are demonstrated, to show in what aspects contemporary microeconomics reflects new conditions of the 21st century. With the help of the analysis of the current academic publications in microeconomics the behaviour aspects of the main economic agents have been clarified. New approaches and new ideas in current microeconomic investigations have been generalized. As far as consumers are concerned, new understanding has been developed in the area of rationality, utility satisfaction instead of utility maximization, new models of intertemporal choice with intertemporal transaction costs, attention and cognitive resources as new individual constraints. As for firms, new characteristics of business units have been shown in forms of digital ecosystems that blur the line between a firm and a market, different markets and industries. As a result, a classical well-structured firm has been giving way to a flexible digital division. New aspects have become inherent features of market interactions, price strategies and competition under information asymmetry. Digital economy allows to mitigate agents’ asymmetry in many dimensions through making information public, but at the same time digitalization creates barriers to optimal decision-making, e.g. non-adequate expert consultations, imprudently copying other’s social experience and rush herd behavior in networks.

About the authors

N. M. ROZANOVA

Moscow School of Economics, Lomonosov Moscow State University; Moscow State Institute of International Relations (MGIMO)

Author for correspondence.
Email: happyeconomics@list.ru
Moscow, Russia; Moscow, Russia

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