Market

Economy

In the usual vocabulary, “to pass a market ”, is the operation by which two parts make a exchange freely accepted. The operation is generally economic, but it can carry on any type of activity or of goods (for example a political decision). One should hold the term of “ contrat ” with this type of operation.

For the economists, the “market” east:

the whole of the rules (legal or abstract) by which this type of economic operation can réaliser ;
the “place” of interaction between purchasers and vendeurs ;
the “place” of confrontation of their offers and their requests, real or potentielles ;
the “place” leading to determine the Price of a product, service or credit, or of a whole of produced S, service S or Active S ( market price ).

Some estimate that the market is not also natural and spontaneous only one it imagine : “ If the system of market is a dance, it is the State which provides the track and the orchestra ” written Charles Lindblom in The Market System (2001). They are placed within a framework where the contractual relation is not Bilatéral E, but subjected to the monitoring and the guarantee of a third (a company of Stock Exchange, a referee, a State, etc).

However, just as of people can dispute a match without referee, it is possible to conclude from the markets on the basis of Mutual trust that the Clause S will be respected by it, and of the direct threat in the event of violation : thus all the economy known as “ functions; souterraine ”, unguaranteed by the legal procedures.

The market is a central concept in economy. The market relates just as easily to the exchanges of goods that services and financial credits and real, as well at the local level as world. One also speaks by extension about the Job market for the exchange about the labor force subject to remuneration.

Holding of the Libre-échange estimate that when official constraints relate to the exchanges, at the level them quantities which can be offered or bought, or from the price level, one moves away partly or completely from the concept of market. In this vision, one considers that the market is known as effective (in efficient Franglais ), if it contributes to approach the Fair price and a optimum Allowance of the resources. See Efficiency of the market

Marketing

The Marketing proposes three visions of the market:

- optical produced : the market is then cut out in four categories.

Gone principal: together similar products entering directly in competition ones compared to the others (example: the market of the socks)

Gone surrounding: together products different but convergent with satisfaction from the same need (ex: sticking, bottoms, etc)

Gone support: together products whose presence is necessary to the consumption of the products of the principal market (ex: pants, skirts, etc)

Gone generic: together products resulting from the principal and surrounding market (ex: clothing)

- optical request : the market includes all the customers able and eager to carry out a commercial exchange in order to satisfy a Besoin or a Désir.

- optical exchange: the market corresponds to the total volume of businesses of an activity.

Decision making

The market is a system of decision making: it is enough that each one comes there with one or more options, and for each one the price which it is ready to pay to see it adopted or, on the contrary, the price which it asks whether it is adopted (knowing that he thus prefers his rejection). By defect, one remains in the former situation.

One retains, if it exists, the option which produces the greatest apparent added-value (i.e difference between supply of adoption and demand in rejection), one pays the applicants of the rejection to proportion of their requirement, and one does what one wants of added-value (equal division between all, payment with the Treasury, etc)

There are no losers, each one setting out again is in the same situation that at the beginning, that is to say with a compensation higher than what costs him the option selected. However, this system does not make it possible to withdraw from the Théorème impossibility of Arrow : from this point of view its only defect is that it does not respect the weakest criterion (insensitivity to the nonrelevant options). The end result can depend about the exchanges.

Example

Let us imagine that four cities are requested to determine the city where the hospital will be built having to serve them.

Let us imagine in addition that the city has gathers 42 % of the voters, the city B 26 % of the voters, the city C 15 % of the voters and the city D 17 % of the voters.

It is also necessary, for the needs for calculation, to make assumptions on the value of the gift which the hospital for the inhabitants represents. One can suppose that it is worth 100 euros, i.e. they are ready on their premises to pay 100 euros to have the hospital, but that each km to traverse reduced of 1 euro the sum offered. Thus, the inhabitants of has would pay only 70 € for the hospital if it is out of B, and only 50 € if it is installed in D.

Lastly, it is necessary to make assumptions on the mode of enchère : it will be supposed that each option been the subject of a promise of donations if it is retained, and that if an option is not retained, the corresponding promises of donations are nulles : it is thus possible to make parallel and contradictory promises (exactly as one can engage several trade negociations for the purchase of its future housing). Moreover the results are published by it only at the end : thus, it is not possible to overbid and is needed from the start offer the maximum that one wishes. Lastly, it will be supposed that the collected sums are offered for price of the common hospital, they are thus lost for the inhabitants (but not for everyone)

The result of the offers with these assumptions is thus theoretically the following:

It is B which is the site which with the greatest value ajoutée : 8 175 € by section of 100 inhabitants (to be multiplied by the number of inhabitants and to divide per hundred to obtain the total value added in euros).

It is thus in the city B that the hospital will be built.

It is besides, there still theoretically, the result which a “ would have obtained; technocrate ” carrying out a calculation of economic optimization and which would not be mistaken on the assumptions in value to retain (100 € less 1 € of the km).

Favors and disadvantage

The system is very fine and makes it possible to adapt to the real preferences of the ones and others. If the collected sums are sufficient, one can realize that it is possible to build two hospitals. Conversely, one can note that construction is more expensive than than the inhabitants estimates desirable. One can finally note that the ones are ready to spend more than of others, or are more or less sensitive to the distance, which varies the site selected.

On the other hand, the system is very sensitive to the method of setting in market, and if it is necessary, with the method of allowance of the added-value. It gives variable results according to the order of the operations (for example, if one asks initially where to build the hospital, then where to build the tram, the results can be very different from what one would obtain if one proposes the construction of the tram before proposing that of the hospital).

See also on this subject the anomalies of market.

The vote like market

Conversely, the Vote is a particular market

where the proposal is not free: a procedure fixes the acceptable options,
where time is not free: a procedure fixes the moment of the decision,
where the currency used, “ballot paper”, is a currency initially also distributed between all, of single and noncapitalizable use. The exchange is then asymmetrical. There is thus gaining (those which, in exchange of their ballot paper, obtain a decision in conformity with their wish) and losers (those which do not have succeeds in blocking the option selected and do not obtain anything in exchange).

The type of pressure applied makes it possible to create an infinity of voting systems starting from the condition of market.

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