Market is one of many types of systems, institutions, procedures, social relations and infrastructure in which parties are involved in exchange. While parties can exchange goods and services with barter, most markets rely on sellers who offer their goods or services (including labor) in exchange for money from buyers. It can be said that the market is the process by which the prices of goods and services are set. The market facilitates trade and enables the distribution and allocation of resources within the community. The market allows any tradable item to be evaluated and priced. A market emerges more or less spontaneously or may be deliberately constructed by human interaction to allow for the exchange of rights (see ownership) of services and goods. Markets generally replace the gift economy and are often held in place through rules and customs, such as booth costs, competitive prices, and sources of goods for sale (local products or stock registration).
Markets may vary by product (goods, services) or factors (labor and capital) sold, product differentiation, place where exchange is done, targeted buyers, duration, sales process, government regulations, taxes, subsidies, minimum wage, price, legality of exchange, liquidity, intensity of speculation, size, concentration, exchange of asymmetry, relative prices, volatility and geographical extensions. The geographic borders of markets can vary greatly, for example the food market in a single building, the local real estate market, the consumer market across the country, or the economy of the international trade bloc where the same rules apply. along. The market can also be around the world, see for example global diamond trade. The national economy can also be classified as a developed market or a developing market.
In a mainstream economy, the concept of a market is any structure that allows buyers and sellers to exchange any kind of goods, services, and information. The exchange of goods or services, with or without money, is a transaction. Market participants consist of all buyers and sellers of goods affecting their prices, which are the main topics of economic studies and have spawned several theories and models of the basic market forces of supply and demand. The main topic of debate is how much a particular market can be regarded as a "free market", free of government intervention. Microeconomics has traditionally focused on the study of market structure and efficiency of market equilibrium; when the latter (if any) is inefficient, then the economist says that a market failure has occurred. However it is not always clear how resource allocations can be increased as there is always the possibility of government failure.
Video Market (economics)
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The market is one of many varieties of systems, institutions, procedures, social relations and infrastructure in which parties are involved in exchange. While parties can exchange goods and services with barter, most markets rely on sellers who offer their goods or services (including labor) in exchange for money from buyers. It can be said that the market is the process by which the prices of goods and services are set. The market facilitates trade and enables the distribution and allocation of resources within the community. The market allows any tradable item to be evaluated and priced. A market sometimes arises more or less spontaneously or may be deliberately constructed by human interaction to allow for the exchange of rights (see ownership) of services and goods.
Markets of various kinds can spontaneously appear whenever a party has an interest in a good or service that can be provided by another party. Therefore there could be a cigarette market in correctional facilities, one for gum in a playground, and another for contracts for commodity shipments in the future. There can be a black market, where goods are illegally exchanged, for example the market for goods under the command economy despite pressure to suppress them and virtual markets, such as eBay, where buyers and sellers do not physically interact during negotiations. The market can be set up as auction, as a personal electronics market, as a commodity wholesale market, as a shopping center, as a complex institution like the stock market and as an informal discussion between two individuals.
Markets vary in form, scale (volume and geographic reach), location and type of participants and types of traded goods and services. The following is an incomplete list:
The physical consumer market
- Food retail markets: farmers markets, fish markets, wet markets and grocery stores
- Retail market: public market, market square, Main Street, High Street, bazaar, Souq, night market, shopping center and shopping center
- Large box stores: supermarkets, hypermarkets, and discount stores
- Ad hoc auction market : the process of purchasing and selling goods or services by offering them to bid, take bids and then sell items to the highest bidder
- Used goods market like a flea market
- Temporary market like an exhibit
The physical business market
- Physical wholesale markets: the sale of goods or merchandise to retailers; for industrial, commercial, institutional or other business users or other wholesalers and related subordination services
- Market for intermediate goods used in the production of other goods and services
- Labor market: where people sell their workforce to businesses in return for wages
- Ad hoc auction market : the process of purchasing and selling goods or services by offering them to bid, take bids and then sell items to the highest bidder
- Temporary markets such as trade shows
Non-physical market
- The media market (broadcast market): is an area where residents may receive the same (and similar) television and radio station offerings and may also include other types of media including newspapers and Internet content
- Internet market (electronic commerce): trading in products or services using a computer network, such as the Internet
- An artificial market created by a regulation to redeem the rights to derivatives that have been designed to improve externalities, such as pollution permits (see carbon trading)
Financial markets
Financial markets facilitate the exchange of liquid assets. Most investors prefer to invest in two markets:
- The stock market, for exchange of shares in the company (NYSE, AMEX and NASDAQ are the most common stock markets in the United States)
- The bond market
There are also:
- The currency market is used to exchange one currency with another, and is often used for speculation on exchange rates
- The money market is the name for the global market for lending and borrowing
- Futures markets, in which contracts are exchanged for future freight forwarding are often the result of general commodity markets
- Market prediction is a type of speculative market in which the goods are exchanged are futures on the occurrence of certain events; they apply market dynamics to facilitate information aggregation
- The gray market (parallel market): is commodity trading through a distribution channel which, while legal, unofficial, illegitimate, or undesirable by the original manufacturer
- market illegal goods such as markets for illegal drugs, illegal weapons, infringing products, cigarettes sold to minors or non-taxable cigarettes (in some jurisdictions), or personal sales of goat's milk that are not pasteurized
Maps Market (economics)
Market mechanism
In an economy, markets running under laissez-faire policies are called free markets, they are "free" from governments, in the sense that governments do not seek to intervene through taxes, subsidies, minimum wages, price ceilings and so on. in. However, market prices can be distorted by sellers or sellers with monopoly power, or buyers with monopsony power. Such price distortions can adversely affect the wellbeing of market participants and reduce the efficiency of market outcomes. The relative level of organizational and negotiating power of buyers and sellers also greatly affects the functioning of the market.
The market is a system and the system has a structure. A well-functioning market structure is defined by the theory of perfect competition. Well-functioning markets in the real world are never perfect, but basic structural characteristics can be approached for real-world markets, for example:
- Many small buyers and sellers
- Buyers and sellers have equal access to information
- Products are comparable
The market where price negotiation meets equilibrium, but its equilibrium is inefficient is said to have failed market. Market failure is often associated with inconsistent preference of time, information asymmetry, noncompetitive markets, major agent issues, externalities, or public goods. Among the major negative externalities that can occur as a side effect of production and market exchange are air pollution (side effects from manufacturing and logistics) and environmental degradation (adverse effects of agriculture and urbanization).
There are popular thoughts, especially among economists, that free markets will have perfect competition structures. The logic behind this thinking is that market failures are perceived to be caused by other exogenous systems, and after removing exogenic systems ("liberating" markets) the free market can proceed without market failure. In order for the market to be competitive, there must be more than one buyer or seller. It has been suggested that two people can trade, but it takes at least three people to have a market, so there is competition on at least one of two sides. However, the competitive market - as understood in formal economic theory - depends on a much larger number of buyers and sellers. The market with a single seller and many buyers is a monopoly. The market with single buyers and many sellers is monopsony. This is the "polar opposite of perfect competition". As an argument against such logic, there is a second view which suggests that the source of market failure is within the market system itself, therefore the abolition of other interfering systems will not produce markets with perfectly competitive structures. As an analogy, such an argument can show that the capitalist does not want to improve the market structure, just as the soccer team coach will influence the referee or will break the rules if he can while he chases his targets to win the game. So according to this view, capitalists do not increase their team's balance versus the worker-consumer team, so the market system needs an external "referee" that balances the game. In this second framework, the role of the "referee" of the market system is usually given to a democratic government.
Market studies
Disciplines such as sociology, economic history, economic geography and marketing develop a new understanding of the market that studies the actual market that is composed of people who interact in a variety of ways, in contrast to the abstract and whole concept of the "market". The term "market" is generally used in two ways:
- "Market" shows an abstract mechanism in which supply and demand are in line and agreement is made; Instead, references to the market reflect the usual experience and place, process, and institution where exchange occurs
- The "market" signifies an integrated, all-encompassing and cohesive capitalist world economy.
Economy
Microeconomics (from the Greek prefix micro - meaning "small" and economy) is an economic branch that studies the behavior of individuals and organizations that have little impact in making decisions about limited allocation of resources (see scarcity). On the other hand, macroeconomics (from Greek prefix macro - meaning "big" and economy) is an economic branch associated with performance, structure, behavior, and overall economic decision making. , rather than individual markets.
The modern field of microeconomics emerges as an attempt at thinking neoclassical economic thought to put economic ideas into mathematical mode. It began in the 19th century debates surrounding the works of Antoine Augustine Cournot, William Stanley Jevons, Carl Menger and LÃÆ' Â © on Walras - this period is usually referred to as the Marginal Revolution. The recurrent theme of this debate is the contrast between work value theory and subjective value theory, first attributed to classical economists such as Adam Smith, David Ricardo and Karl Marx (Marx is contemporary of the marginalists).
In his book of Principles of Economics (1890), Alfred Marshall presents a possible solution to this problem, using the supply and demand model. Marshall's idea to solve the controversy is that the demand curve can be derived by combining individual consumer demand curves, which are based on consumer problems to maximize utility. The supply curve can be derived by superimposing a representative firm supply curve for factors of production and then market equilibrium will be given by the intersection of the demand and supply curve. He also introduced the idea of ​​different market periods: especially long-term and short-term. This set of ideas gives way to what economists call perfect competition - now found in standard microeconomic texts - although Marshall himself is highly skeptical, he can be used as a general model of all markets.
Contrary to the perfect competition model, some imperfect competition models are proposed:
- The monopoly model, already considered by marginalist economists, illustrates profit maximizing capitalists facing market demand curves without competitors, who may practice price discrimination.
- Oligopoly is a form of market in which the market or industry is dominated by a small number of sellers. The oldest model is the duopoly of Cournot (1838). It was criticized by Harold Hotelling for its instability, by Joseph Bertrand for lacking equilibrium for price as an independent variable. Hotelling builds a market model located above the line with two sellers in each extreme line, in this case maximizing profit for both sellers leads to a stable balance. From this model also follows that if the seller chooses his store location so as to maximize his profits, he will place his shop closest to his competitors as "a sharper competition with his rivals is offset by more buyers he has an advantage". He also argues that store groupings are wasteful from the point of view of transportation costs and that the public interest will dictate more spatial dispersion.
- Monopolistic competition is a type of imperfect competition so many manufacturers sell products that are distinguished from each other (eg by branding or quality) and are therefore not a perfect substitute. In monopolistic competition, a company takes the price charged by its competitors as it is given and ignores the impact of its own price on the price of another company. The "founding father" of the theory of monopolistic competition is Edward Hastings Chamberlin, who wrote a pioneering book on the subject, Theory of Monopolistic Competition (1933). Joan Robinson published a book titled The Economic of Imperfect Competition with a comparable theme to distinguish perfectly from imperfect competition. Chamberlin defines monopolistic competition as "a challenge to the traditional view of economics that competition and monopoly are alternatives and that individual prices must be described in the form of one or the other". He goes on: "On the contrary it is held that most economic situations are a combination of competition and monopoly, and that, wherever this happens, wrong views are given by ignoring either of the two forces and of the situation as composed entirely of the other."
William Baumol in his 1977 paper defines the current formal definition of a natural monopoly in which "an industry in which multiformal production is more expensive than production by monopoly". Baumol defined the market that could be competed in his 1982 paper as a market where "admission is completely free and out completely free of charge", freedom of entry in the sense of Stigler: the holder of office has no cost discrimination against immigrants. He argues that a market that can be contested will never have economic benefits greater than zero when in equilibrium and balance will also be efficient. According to Baumol, this equilibrium arises endogenously because of the nature of the market that can be contested, that is, the only industry structure that survives in the long run is that it minimizes the total cost. This is in contrast to the theory of older industrial structures because not only are industrial structures not exogenously provided, but equilibrium is achieved without additional hypotheses to firm behavior, say using reaction functions in a duopoly. He concluded the paper commenting that regulators seeking to block entry and/or leave the company would be better not to interfere if the market resembles a contested market.
Around the 1970s the study of market failures became the focus of the study of information asymmetry. In particular, three authors emerge from this period: Akerlof, Spence and Stiglitz. Akerlof considers the problem of poor quality cars driving good quality cars from the market in their classic "Market for Lemons" (1970) due to asymmetric information between buyers and sellers. Michael Spence explains that signaling is fundamental to the labor market because because the employer can not know in advance which candidate is the most productive, the bachelor degree becomes the signaling tool the company uses to select new personnel.
CB Macpherson identifies the underlying model of the underlying market of liberal political economy and Anglo-American liberal philosophy in the seventeenth and eighteenth centuries: people are cast as selfish individuals, who enter into contractual relationships with such other individuals, exchange of goods or personal capacity as a commodity, with the motive of maximizing the interest rate. The state and its system of government are cast as the outside of this framework. This model came to dominant economic thought in the nineteenth century, when economists such as Ricardo, Mill, Jevons, Walras and later neo-classical economics shifted from reference to markets geographically located to abstract "markets". This tradition is transmitted in contemporary neo-liberalism, where markets are maintained as optimal for the creation of human wealth and freedom and the role of least imaginable countries, reduced to upholding and maintaining stable property rights, contracts and money supply. According to David Harvey, this allows for a volatile economic and institutional restructuring under post-Communist structural adjustment and reconstruction. A similar formality occurs in various social democratic and Marxist discourses that place political action as antagonistic to the market. In particular, commodity theorists such as GyÃÆ'¶rgy LukÃÆ'¨cs insist that market relations should lead to undue exploitation of labor so it must be opposed in toto .
The central theme of empirical analysis is the variation and proliferation of market types since the rise of global-scale capitalism and economics. The School of Regulation emphasizes the ways in which advanced capitalist countries have applied various levels and types of environmental, economic and social regulations, taxation and public spending, fiscal policy and the provision of government goods, all of which have transformed the market in various ways that do not evenly and geographically. and create a mixed economy.
Drawing on the concept of institutional variance and track dependence, varieties of capitalist theorists (such as Peter Hall and David Soskice) identify two dominant modes of economic ordering in advanced capitalist countries, "coordinated market economies" such as Germany and Japan and Anglo- "liberal market economy" America. However, such an approach implies that the American-American liberal market economy actually operates in a matter that is close to the abstract idea of ​​"market". While Anglo-American countries have seen an increasing recognition of neoliberal economic order forms, this does not lead to simple convergence, but rather to various hybrid institutional sequences. Instead, new markets have emerged, such as carbon trading or the right to pollute. In some cases, such as a growing market for water, various forms of privatization of various aspects of infrastructure undertaken by the previous state have created hybrid public-private formations and degree of commodification, commercialization, and privatization.
Marketing
School marketing management, flourishing in the late 1950s and early 1960s, was basically linked to marketing mix frameworks, business tools used in marketing and by marketers. In his paper "The Concept of Marketing Mix", Neil H. Borden reconstructs the history of the term "marketing mix". He began teaching the term after his colleague, James Culliton, described the role of marketing manager in 1948 as a "material mixer"; people who sometimes follow recipes prepared by others, sometimes prepare their own recipes when they leave, sometimes adjusting recipes from ingredients immediately, and at other times creating untried new ingredients other people. Marketer E. Jerome McCarthy proposed four Ps classifications (products, prices, promotions, venues) in 1960, which has since been used by marketers around the world. Robert F. Lauterborn proposed a classification of four C's (consumer, price, promotion, place) in 1990 which was a more consumer-oriented version of the four Ps's that tried to better suit the movement from mass marketing to niche marketing. Koichi Shimizu proposed the 7C Compass Model (corporations, commodities, costs, communications, channels, consumers, circumstances) to provide a more complete picture of the nature of marketing in 1981.
Businesses market their products/services to specific consumer segments. The factors that determine the market are determined by demographics, interests and age/gender. A form of expansion is entering new markets and selling/advertising to a diverse group of users.
Sociology
A prominent entry point for challenging the application of a market model concerning exchange transactions and homo economicus assumptions of maximizing self-interest. In 2012, a number of streams of sociological analysis of the market economy focus on social roles in transactions and in ways of transactions involving social networks and relationships of trust, cooperation, and other bonds. Economic geographers in turn draw attention to the way exchange transactions take place against the backdrop of institutional, social and geographical processes, including class relations, uneven development and historical path dependencies. Pierre Bourdieu has suggested the market model to be self-realizing in virtue of wide acceptance in national and international institutions through the 1990s.
Michel Callon's framing concept provides a useful scheme: every action or economic transaction takes place on, combining and also bringing back specific geographically and culturally specific cultural and social histories, institutional arrangements, rules and connections. These network connections are simultaneously locked up, so that people and transactions can be detached from the thick social ties. Characters of necessity are imposed on agents when they come to work in the market and are "formatted" as a calculative body. Market exchanges contain a history of struggles and contestations that result in actors tending to exchange under a certain set of rules. Therefore, for Challon, market transactions can never be detached from social and geographical relations and it is useless to talk about the degree of attachment and disembeddeness. The emerging themes are interconnectivity, inter-penetration and variety of concepts of people, commodities and ways of exchange under specific market formations. This is most prominent in the recent movement towards post-structuralist theory which refers to Network Theory of Michel Foucault and Actor and emphasizes the relational aspects of person-hood, and its dependence and integration into networks and practical systems. Further commodity network approaches both deconstruct and show alternatives to commodity market model concepts.
In the theory of social systems (see Niklas Luhmann), markets are also conceptualized as environments in economics. As the horizon of all potential investment decisions, the market represents the environment of the actual investment decisions realized. However, such an inner environment can also be observed in systems of further community functions such as in political, scientific, religious or mass media systems.
Economic geography
Widespread trends in economic history and sociology cast doubt on the idea that it is possible to develop a theory to capture the essence or unite the yarn to market. For economic geographers, references to regional, local or commodity markets can serve to weaken the assumptions of global integration and highlight geographic variations in the structure, institutions, history, road dependencies, interaction forms and modes of self-understanding of agents in various areas of market exchange. References to actual markets can show capitalism not as a total force or mode of economic activity that entirely includes, but rather as "a set of economic practices scattered across the landscape, rather than the concentration of systemic power".
The problem with market formalism is the relationship between formal capitalist economic processes and alternative forms, ranging from semi-feudal economies and peasants widely operating in many developing countries, informal markets, barter systems, cooperative workers, or illegal trade that occurs in most countries advanced. The practice of incorporation of non-Westerners into global markets in the nineteenth and twentieth centuries not only resulted in rejection of previous social economic institutions. Instead, various modes of articulation arise between changing local traditions and hybridization as well as emerging social and economic practices of the world. Because of its liberal nature, so-called capitalist markets almost always include geographical economic practices that do not follow the market model. Thus, the economy is a combination of market and non-market elements.
Beneficial here is the complex topology of J. K. Gibson-Graham about the diversity of contemporary market economies depicting various types of transactions, labor and economic agents. Transactions may occur on the black market (such as for marijuana) or artificially protected (as for patents). They can cover the sale of public goods under the scheme of privatization to cooperative exchanges and take place under varying degrees of state monopoly and regulatory power. Likewise, there are various economic agents, involved in different types of transactions with different provisions: one can not assume the practices of kindergarten, multinational corporations, state enterprises, or community-based cooperatives can be incorporated under the same logic of calculations. This emphasis on proliferation can also be contrasted with ongoing scientific efforts to show a cohesive, structural similarity and cohesive similarity to different markets. Gibson-Graham thus reads alternative markets for fair trade and organic food or those who use the local exchange trading system as not only contributing to proliferation, but also forging a new mode of ethical exchange and economic subjectivity.
Anthropology
Economic anthropology is a scientific field that tries to explain human economic behavior in its broadest historical, geographic and cultural sphere. It is practiced by anthropologists and has a complex relationship with the disciplines of economics, which is very important.
Its origin as a sub-field of anthropology began with the founder of Polish-English anthropology, the Bronis? Aw Malinowski, and his French compatriot Marcel Mauss about the nature of gift-giving (or reciprocal) exchange as an alternative to market exchange.. Studies in economic anthropology to a large extent focus on exchange. Bronis? Aw Malinowski who broke the way, Argonauts of Western Pacific (1922), answered the question "why men risk their lives and limbs to travel across vast expanses of dangerous oceans to give what appears to be trinkets which is worthless? ". Malinowski carefully traced the network of exchange bracelets and necklaces across the Trobriand Islands and determined that they were part of the exchange system (Kula ring). He states that this exchange system is clearly linked to political authority. In 1920 and later, the Malinowski study became a subject of debate with the French anthropologist Marcel Mauss, author of The Gift ( Essai sur le don , 1925). Malinowski emphasized the exchange of goods between individuals and their non-altruistic motives to give: they expect the return of equal or greater value (colloquially referred to as "Indian gift"). In other words, reciprocity is an implicit part of rewarding because no "free gift" is given without expecting reciprocity. In contrast, Mauss emphasizes that the prize is not among individuals, but between larger collectivity representatives. He argues that these gifts are a "total prestation" because they are not simple commodities and can be alienated to be bought and sold, but like "crown jewels" embody the reputation, history and sense of identity of the "corporate family group," such as the ranks of kings. Remembering the stakes, Mauss asked "why would anyone give it?" and the answer is a confusing concept, "the spirit of grace". The good part of the confusion (and the resulting debate) is due to poor translation. Mauss seems to argue that rewards are given to keep the relationship between givers alive; failure to return a gift terminates the relationship; and any gift promise in the future. Based on an enhanced translation, Jonathan Parry has pointed out that Mauss argues that the concept of "pure giving" altruistically given only appears in societies with well-developed market ideologies.
Instead of emphasizing how certain types of objects are gifts or commodities for trading within a limited sphere of exchange, Arjun Appadurai and others begin to see how objects flow between these areas of exchange. They distract from the character of human relationships that are formed through exchange and place them on the "social life of things" instead. They examine the strategies by which an object can be "unveiled" (made unique, special, sole) and withdrawn from the market. The wedding ceremony that turns the ring bought into an irreplaceable family heirloom is one example whereas inheritance in turn makes a perfect gift.
Mathematical modeling
Although arithmetic has been used since the beginning of civilization to fix prices, it was not until the 19th century that more advanced mathematical tools began to be used to study markets in the form of social statistics. More advanced techniques include business intelligence, data mining, and marketing techniques.
Parameter size
Market size can be given in terms of the number of buyers and sellers in a particular market or in terms of total money exchange on the market, generally annually (per year). When given in the form of money, market size is often called "market value", but in a different sense than the market value of individual products. For one similar item, there may be different (and generally increasing) market values ​​at the production level, the wholesale level and the retail level. For example, the global drug market value for 2003 was estimated by the United Nations at US $ 13 billion at production level, $ 94 billion at wholesale rate (taking into account seizures) and US $ 322 billion at retail levels (based on retail prices and taking seizures and other losses to the account).
See also
References
Further reading
- Pindyck, Robert S. and Daniel L. Rubinfeld, Microeconomics , Prentice Hall 2012.
- Frank, Robert H., Microeconomics and Behavior , 6th ed., McGraw-Hill/Irwin 2006.
- Kotler, P. and Keller, K.L., Marketing Management , Prentice Hall 2011.
- Baker, Michael J. and Michael Saren, Marketing Theory: Student Text , SAGE 2010. online.
- Aspers, Patrik, Market , Polity Press 2011. online.
- Bauer, Leonard and Herbert Matis (1988) From moral to political economy: The Genesis of social sciences , History of European Ideas 9 (2), 125-143.
- Nathaus, Klaus and David Gilgen (Eds.), Market and Market Community Change: Concepts and Case Studies . Historical Social Research 36 (3), Special Edition, 2011.
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