Although many business executives sat through one, or perhaps several, courses in economics while in school, most probably took away little more than the supply and demand graphs to which they were introduced early in their first course. Ask them if they apply much else from else from economics in their actual business careers, and you’re likely to hear “not much.”
They might be surprised at how certain economic notions have been directly applied in business, with largely positive results. Here a few notable examples.
Auctions. Consider first the increasing use of auctions, which have a distinguished history in the development of economics. In the 1900s, French mathematician-economist Leon Walras envisioned prices in a market economy being set by an auctioneer (since known as the “Walrasian auctioneer”) conducting continuous auctions for all kinds of commodities.
It may be tempting to think that the Walrasian auction is just a theoretical construct, useful primarily in...
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