First-mover advantage vs First-mover disadvantage
“the advantage gained by the initial (“first-moving”) significant occupant of a market segment.” (related: Why now?) Source: Gabriel Weinberg's Mental Models I Find Repeatedly Useful
Conspicuous Consumption
“The spending of money on and the acquiring of luxury goods and services to publicly display economic power.” (related: Veblen goods — “types of luxury goods, such as expensive wines, jewelry, fashion-designer handbags, and luxury cars, which are in demand because of
Market Power
“The ability of a firm to profitably raise the market price of a good or service over marginal cost.” Source: Gabriel Weinberg's Mental Models I Find Repeatedly Useful
Price Elasticity
“The measurement of how responsive an economic variable is to a change in another. It gives answers to questions such as ‘If I lower the price of a product, how much more will sell?’” (related: Giffen good — “a product that people
Barriers to Entry
“A cost that must be incurred by a new entrant into a market that incumbents don’t or haven’t had to incur.” Source: Gabriel Weinberg's Mental Models I Find Repeatedly Useful
Two-sided Market
“Economic platforms having two distinct user groups that provide each other with network benefits.” Source: Gabriel Weinberg's Mental Models I Find Repeatedly Useful
Winner Take All Market
A market that tends towards one dominant player. (related: lock-in; monopoly; monopsony) Source: Gabriel Weinberg's Mental Models I Find Repeatedly Useful
Scarcity
Game theory describes situations of conflict, limited resources, and competition. Given a certain situation and a limited amount of resources and time, what decisions are competitors likely to make, and which should they make? One important note is that traditional game theory
Supply and Demand
The basic equation of biological and economic life is one of limited supply of necessary goods and competition for those goods. Just as biological entities compete for limited usable energy, so too do economic entities compete for limited customer wealth and limited
Arbitrage
Given two markets selling an identical good, an arbitrage exists if the good can profitably be bought in one market and sold at a profit in the other. This model is simple on its face, but can present itself in disguised forms: