The Prisoner's Dilemma

The Prisoner's Dilemma is a concept in game theory based on two assumptions:

1. Each player has an incentive to choose an alternative that benefits them but hurts the other player.
2. When both players act in that way, they end up in a worse situation than if they had chosen different alternatives.

Dominant Strategy

A dominant strategy is the best decision an individual can make, regardless of the decision taken by the other player. Not all games have a dominant strategy; it depends on the game's payoff structure. In the Prisoner's Dilemma, a dominant strategy exists (to confess). As long as the two prisoners cannot agree *not* to confess (something that cannot be maintained while incommunicado), they will both act against each... Continue reading "Prisoner's Dilemma, Nash Equilibrium & Oligopoly" »

Understanding Business Legal Forms in Spain

When establishing a business in Spain, selecting the appropriate legal form is a critical decision. This choice impacts various aspects, including capital requirements, liability, taxation, and social security obligations. Below is a comparative overview of common Spanish business structures.

Sole Trader (Autónomo)

• Minimum Members: 1 (the individual entrepreneur)
• Capital Requirement: No minimum initial capital required
• Liability: Unlimited (personal assets are not protected)
• Taxation: Personal Income Tax (IRPF)
• Social Security Regime: Special Regime for Self-Employed (RETA)
• Key Characteristics:
  • Simplest form to establish.
  • Direct management by the individual.

Community of Property (Comunidad de Bienes - CB)

• Minimum

Understanding Macroeconomics

Macroeconomics focuses on the study of the economic situation nationally and internationally. This branch of economics is not primarily interested in individual consumer behavior, but rather in how the consumption of the entire population evolves. From the macroeconomic point of view, the production of a single company is not as important as the total set of all goods and services produced within a country. It developed after the crisis of the 1930s, following the work of John Maynard Keynes, who argued that the state should intervene in the economy to address serious problems such as unemployment.

National Product

National Product is the total set of goods and services generated by the companies of a country.

Gross

Purchase Price & Cost of Production

Purchase price: Is the total amount of the purchase, including all expenses related to the acquisition operation (transport, insurance, packaging, etc.).

Cost of production: Is the sum of all costs required to manufacture a product, such as labor, raw materials, or energy consumption.

This company knows, at every moment, the value of what has come to stores. This control is a tool that performs using an existence control tab, which is a document that registers, for each type of existence and valuation, a detailed timeline of entries and exits of the store.

Criteria for Valuation of Stocks

The criteria for the valuation of stocks are different ways how a company can economically evaluate the inventory and control... Continue reading "Purchase Price & Cost of Production: Inventory Valuation" »

Glossary of Economic Terms

A

Autarchy

A system of a state that intends to be economically self-sufficient and could be met from its own resources, eliminating imports.

B

Balance of Payments

An account that records transactions and international economic transactions made by a country for a year.

C

Constitution

The fundamental law of a state's organization. The first written constitution was in the U.S. and is still in force. In Spain, the first Constitutional text was drafted by the Cortes of Cadiz in 1812.

Corporatism

Political and economic doctrines advocating the integration of workers and employers in the same occupation into a single organization.

D

Deficit

A situation that occurs in an account, budget, etc., when costs outweigh gains.

Deflation

When... Continue reading "Glossary of Economic Terms: Autarchy, Balance of Payments, and More" »

State Intervention in the Economy

State intervention in the economy is justified in two ways:

1. The market mechanism generates a combination unwanted by society.
2. The existence of so-called market failures.

Market failure occurs when the intervention generates the same market imperfections, preventing optimal results. Main market failures:

• Existence of public goods: These goods are characterized because the consumption of one individual does not cause exclusion from the consumption of other individuals.
• Existence of imperfectly competitive markets (monopolies, oligopolies, and monopolistic competition): The fundamental characteristic of this market is the ability of companies to influence the market price. The state tries to make such markets disappear

Communication Channels

Effective communication channels: The communication must be effective and not distorted. According to Koontz, an agent is not needed as much as information. The established channels and command levels are a consequence of the leadership styles:

• Descending communication: Management transmits the information the company believes is desirable for the institutions and to carry out the company's orders and policies. It occurs through the hierarchical line of direction, mediante meetings with middle management. It is self-communication of authoritarian styles.
• Upward communication: Reflecting the situation of subordinate levels while collecting aspirations and concerns of their own. It uses various means of participation: meetings,

Decoding Marketing Promotions

National Commission of Securities Market Website Analysis

On the website of the National Commission of Securities Market, in the short term, the company mainly used debts to credit institutions, and thus lowered its derivatives, leasing, and creditors for bonds and short-term loan obligations.

In the case of long-term debt, it is used primarily for the issuance of bonds, like borrowing to bonds/t with a nominal value of 700,000 in May 2007, of which 100,000 in nominal repurchase in 2008, obtaining a great benefit in repurchase of 36,327.

Another means of financing long-term loans has been to credit valued at 264,561 at the end of 2008. In the long term, another source of funding such as financial derivatives and leasing is also used.

Business Financing

Need for Company Capital

The need for a company's capital relates to the role of company resources and all activities designed to obtain the necessary funds and allocate them for the most rational use. This allocation aims to yield a higher return with less risk and cost.

Sources of Funding

Sources of Funding: By Origin

According to their origin, funding sources can be classified as:

• Internal Resources: Generated by the company itself, constituting reserve funds and depreciation.
• External Resources: Obtained from outside the firm, including contributions from partners, capital increases, loans issued by the company, and various forms of debt through loans and credits.

Sources of Funding: By Ownership

According to the title or ownership, resources can... Continue reading "Company Funding Sources and Capital Needs" »