Modern economic theory is a rich collection of methods and analytical techniques suitable for the analysis of a vide variety of important economic and social phenomena. Based on rigorous theoretical reasoning and utilizing sophisticated mathematical tools, economic theory aims to provide a systematic and coherent framework for study of private and public decision-making and functioning of both market and non-market institutions.

The most important recent advancements of economic theory are made in the fields of decision theory, game theory, and informational economics. Decision theory focuses on the question of how economic agents (and people in general) make choices, providing foundations for the ideas of "preferences" and "beliefs". Game theory is aimed at the understanding of the behaviour of individuals in strategic situations of conflict and cooperation, situations in which individuals make decisions that will influence one another's welfare. The extremely important role of information in shaping interaction among individuals is recognized by information economics.