Economics of Markets: Neoclassical Theory, Experiments, and Theory of Classical Price Discovery 1st Sabiou M. Inoua

Economics of Markets: Neoclassical Theory, Experiments, and Theory of Classical Price Discovery – Ebook Instant Download/Delivery ISBN(s): 9783031084270,3031084276

Product details:

• ISBN-10 ‏ : ‎ 3031084276
• ISBN-13 ‏ : ‎ 978-3031084270
• Author(s): Sabiou M. Inoua, Vernon L. Smith

This book establishes that neoclassical economics based on the marginal utility calculus failed to derive a theory of consumer market price discovery consistent with the experimental market evidence. Such markets involve inherently discrete final-demand items bought for consumption and not subject to resale. Classical economists following Adam Smith articulated a rich narrative of price discovery theory consistent with experimental evidence based on operational concepts of discrete demand values (maximum willingness-to-pay), and symmetrically, supply costs (minimum willingness-to-accept). We develop and extend a mathematical model of classical market price formation. Chapter 1 & 2 describes this theme and chapter 3 connects it with experiments. Chapter 4 builds on experimental examples for an intuitive overview of the theory. A partial equilibrium version of the theory constitutes Chapter 5. Chapter 6 extends this framework to price formation by wealth constrained agents in multiple-goods markets. Chapter 7 applies this framework to the study of re-tradable durable-goods and financial claims that are subject to sources of instability absent in markets for consumer non-durables.

Table contents:

1. Prologue
2. Introduction
3. Rediscovering Classical Economics in the Laboratory
4. Price Formation: Overview of the Theory
5. Price Formation: Partial Equilibrium
6. Price Formation: General Equilibrium
7. Financial Instability: Re-tradable Assets and Speculation

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