There is no agreed-upon definition of power in economics. Economics is the social science that studies the production distribution, and consumption of goods and services. At least five definitions of power have been used:
- purchasing power, i. Purchasing power is the amount of value of a good/services compared to the amount paid with a Currency. e. , the ability of any amount of money to buy goods and services. Money is anything that is generally accepted as Payment for Goods and services and repayment of Debts. Those with more assets (or, more correctly, net worth) have more power of this sort. In Business and Accounting, assets are everything owned by a person or company (all tangible and intangible property that can be converted into cash. For the film entitled Net Worth see Net Worth (film. In business net worth (sometimes called net assets) is the total Assets The greater the liquidity of one's assets, the greater one's purchasing power is. Market liquidity is a Business, Economics or Investment term that refers to an Asset 's ability to be easily converted through an act of buying
- monopoly power, i. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient e. , the ability to set prices or wages. This is the opposite of the situation in a perfectly competitive market, in which supply and demand set prices. In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. Supply and demand is an Economic model describing effects on price and quantity in a Market.
- bargaining power, i. Bargaining power is a concept related to the relative abilities of parties in a situation to exert influence over each other e. , the ability of players in a bargaining game to influence the outcome, which is the players sharing rule for something (a prize, a cake, access to resources). See e. g. Muthoo, Abhinay 1999: Bargaining theory with applications, Cambridge University Press. To be able to bargain prices ( toggle prices, or rewards etc. . . ). Also see definition of barganing or to bargain
- managerial power, i. Management (covering theory practice and scope of management and Manager' (covering the people who manage might help clarify and systematise e. , the ability of managers to threaten their employees with firing or other penalties for not following orders or for not giving in satisfying reports. This exists if there is a cost of job loss, especially due to the existence of unemployment and workers' lack of sufficient assets to survive without working for pay. Unemployment occurs when a person is available to work and currently seeking work but the person is without work.
- class power in Marxian political economy: under capitalism this refers to a situation where a minority (the capitalists) in society controls the means of production and thus is able to exploit the majority (the workers). Social class refers to the hierarchical distinctions (or stratification) between individuals or groups in Societies or Cultures. Note Marxian economics is not restricted to Marxist economics as it includes the economic thought of those inspired by Marx's works who do not identify with Political economy originally was the term for studying production buying and selling and their relations with law custom and government Capitalism is the Economic system in which the Means of production are owned by private Persons and operated for Profit and where Means Of Production is a compilation of Aim 's early 12" and EP releases recorded between 1995 and 1998 The term " exploitation " may carry two distinct meanings The act of utilizing something for any purpose
In general, those with more power also have more freedom than others and may be able to exploit others in society and/or cause some sort of market failure. Political freedom is the absence of interference with the sovereignty of an individual by the use of coercion or aggression The term " exploitation " may carry two distinct meanings The act of utilizing something for any purpose Market failure is a concept within economic theory wherein the allocation of goods and services by a Free market is not efficient.
It is worth noting that information is also a form of power, in the case of two agents entering into a contract; if one agent knows that their deal with turn out significantly better (or worse) than the other suspects, then they are exercising a form of informational economic power. See Information asymmetry
In Economics and Contract theory, information asymmetry deals with the study of decisions in transactions where one party has more or better InformationDapyx Software network: MP3 Explorer | Ebook Manager | Zenithic