Markets
Laws and principles filed under Economics & Organizations / Markets.
Markets
Every guide includes meaning, mechanism, applications, limitations, related concepts, and traceable references.
Competitive market equilibrium model
Law of Supply and Demand
Prices coordinate competing plans: quantity demanded usually falls with price, quantity supplied usually rises, and their intersection defines a model equilibrium.
Monetary circulation regularity
Gresham's Law
When two monies must trade at a fixed legal ratio that misprices their market values, the overvalued money tends to circulate while the undervalued money is retained, melted, or exported.
No-arbitrage option-pricing model
Black-Scholes-Merton Model
A dynamically hedged contingent claim can be valued from the underlying price process, volatility, time, strike, and risk-free financing under idealized market assumptions.
Efficiency-rebound hypothesis
Jevons Paradox
Efficiency improvements can reduce the effective cost of a resource service enough that demand growth offsets, or even exceeds, the resource saved per unit of service.
Relative-cost growth mechanism
Baumol's Cost Disease
Labor-intensive services with slow measured productivity growth can become relatively more expensive when wages rise with high-productivity sectors.
Common-value auction effect
Winner's Curse
In a common-value auction, the highest bidder is disproportionately likely to have received an overly optimistic signal unless the bid adjusts for winning.