NetworksAndMarketFailure

How are markets like networks?

Markets (in their idealization) are fully connected networks, where each node is equally aware of and attentive to every other. Any market which fails to reach ideal ie. acts like any other type of network, is flawed. It no longer necessarily has the ideal properties of the free market.

This raises the thoughts:

• you can improve markets by improving their network characteristics

• you can identify flawed markets using NetworkAnalysis techniques.

• you should distrust markets with radically different architectures

See also TheEfficiencyQuestion

CategoryEconomics, CategoryNetworks