notices - See details
Notices
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Aaron (not verified)
28th March 2017 | 10:28am

I appreciate the blog, but I would be hesitant to call these market failures. I believe the term failure is based on an assumption that markets are in equilibrium instead of tending towards equilibrium via coordination. Every realized price is a market-clearing price versus a state of disequilibrium with a supply and demand mismatch. Realized prices, overtime, expose and correct errors via entrepreneurial selection. Therefore, the disequilibrium is a necessary component of a market process and often called "natural rate of profit".

This article may be of interest to you. Harold Demsetz, Information and Efficiency, Another Viewpoint in the Journal of Law and Economics, 1969, vol. 12, issue 1, pages 1-22