The Microeconomics ( Greek μικρός Mikros , German , small ' , οἶκος oikos , house' and -nomie ) even Microeconomics or Microeconomics is a branch of economics . Some authors differentiate between microeconomics as a science and microeconomics as the subject of study .
Its subject is the economic behavior of individual economic subjects ( households and companies ). She analyzes decision-making problems and coordination processes that are necessary due to the division of labor in the production process, and the allocation of scarce resources and goods through the market mechanism . In particular, microeconomics studies markets in which goods and services are bought and sold. In addition to the actors in these markets, the market structures ( monopoly , oligopoly , polypol ) and the respective institutional framework are also taken into account. A central concept is the market equilibrium , which is established through pricing .
The second important branch of economics is macroeconomics . In contrast to microeconomics, macroeconomics works with aggregated quantities, for example with the total income of all households. Microeconomic statements cannot simply be summarized into macroeconomically meaningful statements, which represents the line of thought from the individual to the overall economy. However, many macroeconomic model premises can be justified microeconomically. The technical term for the procedure is microfoundation .
Mostly Adam Smith is mentioned as the founder of microeconomics (or classical economics ). In his work The Prosperity of Nations (1776) he examines u. a. Advantages and disadvantages of the market mechanism. Above all, he discovered how economic benefits can arise from individual self-interest.
At the end of the 19th century , with the marginalist revolution, the mathematization of economic analysis began, as a result of which economics concentrated on quantifiable phenomena (quantities and prices) and narrowed it down to " economics ", which studied the behavior of suppliers and buyers in markets.
Since the 1950s, economics has continuously expanded its field of application. By Gary S. Becker many new areas of economic analysis were subjected, as in politics, law, family, organization, or history.
First, the classic areas of microeconomics should be considered.
The household theory deals with the demand side of the commodity market . An important object of investigation here is the benefit that a customer has from the shopping cart , the amount of all goods that he buys in a certain period. For this, preference relations and convexity assumptions play an important role. For the consideration of preference relations, the transitivity assumption and the completeness assumption of preferences are particularly important. The assumptions about a rational actor can be used to describe indifference curves .
In contrast, there is production theory , which deals with the supply side of the goods market. Based on a given production function , which indicates the ratio of input to output factors, it is examined which production quantities should be produced with which input factors.
The price theory examines the pricing as a result of the encounter between supply and demand in markets under different forms of competition and the conditions for achieving stability and a balanced market .
Newer approaches and related disciplines
In addition to these three basic parts (household theory, production theory and price theory), other approaches have emerged:
- In the New Institutional Economics or the transaction cost theory , factors such as asymmetrical information , limited rationality and opportunism are taken into account in order to arrive at more realistic assumptions.
- The game theory extends the microeconomics to the consecutive interactions of several market participants (strategic behavior). In risk theory, dealing with statistical uncertainty or unequal information distribution is considered.
- In contrast to neoclassical microeconomics, evolutionary economics does not examine the formation of market equilibria, but rather it examines the dynamics of economic processes.
- The Experimental Economics deals with the experimental verification of theoretical behavioral assumptions of microeconomics.
- The behavioral economics seeks explanations for behavior that contradicts the assumption of rational Nutzenmaximierers.
- The microeconometrics uses methods of econometrics and focuses on the quantitative, usually empirical examination of the microeconomic economic activity. Mathematical methods of statistics and stochastics are used and test hypotheses are submitted. The macroeconomic counterpart is macroeconometrics .
In microeconomics, as in general economics, abstract models are often used. This has the advantage that, in this way, concrete questions can be made manageable for mental penetration. There are only a few fundamental assumptions that apply everywhere in economics.
For example, if the conditions according to Jevons' law apply (e.g. there are no spatial or temporal distances), one speaks of perfect markets . These are a theoretical model with very special restrictive assumptions. In a perfect market, for example, there is no arbitrage , so supply and demand meet at a common point, the market equilibrium . Restrictive assumptions such as the perfect market, complete information or the rationality of Homo oeconomicus can be abandoned, but require correspondingly more complex modeling.
The search for the optimal simplification and modeling is a typical microeconomic problem: on the one hand there are costs in the form of unreality, on the other hand there is the benefit of the simplification. Unfortunately, a greater degree of simplification is associated with greater unreality. Simplification is also a scarce commodity.
When it comes to the question of how markets work, one first has to look at how an individual market works. If the interaction of many or all markets is to be considered at the same time ( interdependence ), one speaks of the theory of general equilibrium ( general equilibrium model ).
In particular, the prevailing neoclassical economic theory has some standard assumptions:
- Homo oeconomicus : Assumption of individually rational behavior (existence of a complete order of preferences, transitivity of preferences)
- Households: striving for utility maximization
- Company: striving to maximize profit
- Perfect market (not necessarily Polypol)
- Complete information
- No externalities
As early as the 19th century, Gustav von Schmoller pointed out that the knowledge of psychology should be given greater consideration in economics. Representatives of behavioral economics , for example, assume a different image of man . A limited rationality among the actors is also assumed here. The 2002 Nobel Prize winners Daniel Kahneman and Vernon L. Smith have recently earned recognition in behavioral research. Another essential component of behavioral economics is the prospect theory (new expectation theory), which is a psychologically more realistic alternative to the expected utility theory.
There are two classic methods of economic and social science research:
The partial analysis examines how the individual economic subject (household or company) fits into the exchange process mediated by markets (household theory and theory of the company) or how such economic subjects interact on a single product market. In the partial analysis, use is necessarily made of the ceteris paribus assumption.
In both partial and total analysis, the role of prices and the price system is at the center of considerations (price theory).
- Friedrich Breyer: Microeconomics. An introduction . 4th edition. Springer, Berlin 2008, ISBN 978-3-540-85119-6 .
- Eberhard Feess: Microeconomics. A game theory and application-oriented introduction . 3. Edition. Metropolis, Marburg 2004, ISBN 3-89518-491-8 .
- Michael Heine, Hansjörg Herr: Economics. Paradigm-oriented introduction to micro- and macroeconomics . Oldenbourg, Munich 2003, ISBN 3-486-27293-4 .
- Klaus Herdzina: Introduction to Microeconomics . 10th edition. Vahlen, Munich 2005, ISBN 3-8006-3272-1 .
- Robert S. Pindyck, Daniel L. Rubinfeld: Microeconomics . 6. update Edition. Pearson Studium, Munich 2005, ISBN 3-8273-7164-3 .
- Helge Peukert : Microeconomic Textbooks: Science or Ideology? Metropolis, Marburg 2018, ISBN 978-3-7316-1303-9 .
- Winfried Reiss: Microeconomic Theory. Historically sound introduction . 6th edition. Oldenbourg, Munich 2007, ISBN 978-3-486-58544-5 .
- Hal R. Varian : Fundamentals of Microeconomics . 8th edition. Oldenbourg, Munich 2011, ISBN 978-3-486-70453-2 .
- Winfried Reiss: Microeconomic Theory .
- Wilhelm Lorenz: Online Introduction to Microeconomics.
- Ralf Wagner: Guide to Economics.
- Introduction - page on mikrooekonomie.de
- Gabler Wirtschaftslexikon: Microeconomics .
- Paul Anthony Samuelson, William D. Nordhaus: Economics. The international standard work on macro and microeconomics . 2nd Edition. mi-Fachverlag, 2005, ISBN 978-3-636-03033-7 , p. 21.
- Basic assumptions - Article at mikrooekonomie.de