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> That's an absurd definition because no one has complete information. Not really. Markets depend on complete information. Else, how can someone accurately j
by tsally 18y ago
> That's an absurd definition because no one has complete information.
Not really. Markets depend on complete information. Else, how can someone accurately judge the value of something? If I buy a candy bar that's actually only worth $1.00 to me for $2.00, there is a market failure. I might think it was worth $2.00 because of the ingredients on the back. Little do I know that the candy bar is actually made with cheaper ingredients. There is a market failure. Now apply this analogy on a large scale and you can see how incomplete information causes market failures.
- anamax 18y ago> > That's an absurd definition because no one has complete information. > Not really. Feel free to cite anything about which you have complete information. > Markets depend on complete information. Else, how can someone accurately judge the value of something? There are no guarantees, so you act based on perceived value. When you're right, you're better off. When you're wrong, you're worse off. Note that the lack of complete information applies to govt decison making as well, but govts lack diversity and apply force. > If I buy a candy bar that's actually only worth $1.00 to me for $2.00, there is a market failure. Huh? If that candy bar is only worth $1.00 to you, why did you pay $2? Ah, because you think that ingredient cost matters. That's a failure of end-to-end thinking. Note govts fail in analogous ways, and often with greater ill effect, yet you don't mention that possibility.
- tsally 18y ago> Feel free to cite anything about which you have complete information. You are proving my point valid; pure free market theory doesn't work because you never have complete information.
- corentin 18y ago"pure free market theory" (whatever it is...) is just a model, and as such it can't perfectly describe what it is supposed to describe.