Reinventing the Bazaar

A Natural History of Markets

Bibliographic Data

ID9716875
AuthorsStephen L Cheung (0000-0001-9374-8357, The University of Sydney, corresponding author)
Year2003
Volume113
Issue488
PagesF404-F406
Publication date2003-06-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/1468-0297.13915
OpenAlexW2083100528
LanguageEN
Citations received48
References cited41

‘What is a tenured professor going to teach me about the market economy?’ This is the challenge, posed by Sun Microsystems CEO Scott McNealy, that Stanford business professor John McMillan sets out to answer in this book. With notable qualifications – his emphasis on trust, and caveat that intellectual property rights can be overprotected – McMillan's answers are often familiar from first‐year economics courses. However the abstract formalisms of theory come to life as he guides the reader through a wealth of headline‐grabbing examples and cases from the world of business. Though written for the complete layman, the book will be of interest to teachers as a source of ideas and case materials, and to students past and present, who will return to it to finally discover what the fuss was all about. Echoing Hayek, McMillan argues that the economic function of markets is largely to aggregate the dispersed information of thousands of traders into a signal, in the form of prices, of value and scarcity. In the textbook formulation the demand and supply curves are known and the price is simply read off a chart, but of course that is not how things work in practice. More compelling, perhaps, are results obtained by Vernon Smith in a celebrated experiment that is now replicated in dozens of classrooms every semester. So long as every participant can observe each trade that occurs, Smith found that prices converged rapidly to the level predicted by theory, even though no individual buyer or seller has enough information to work out what that price will be

Advertising · Bazaar · Business · Economics · Epistemology · Headline · Law and economics · Microeconomics · Neoclassical economics · Scarcity · Value (mathematics · Wonder · Banking stability, regulation, efficiency · Computer Science · Economic Theory and Institutions · Economic Theory and Policy · Philosophy

Tools

Open DOISci-Hub