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Golden ratio of invisible hand: does the gravitation matter?

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  • Malakhov, Sergey

Abstract

The recent paper on the Invisible hand proves the fact that its equilibrium is mathematically perfect. If the producer allocates his time between production and delivery to the ‘the door’ of the buyer with zero search costs and unintentionally maximizes customer’s consumption-leisure utility, both the marginal rate of transformation of production into delivery and the marginal rate of substitution of leisure for consumption become equal to the golden ratio conjugate whereas the sales-costs of production ratio becomes equal to the golden ratio itself, called once by Luca Pacioli, the founder of the modern accounting, as the divine proportion. Previous papers on Invisible hand formulated the hypothesis of the gravitation between sellers and buyers on commodity markets and between men and women in marriage markets. The golden ratio proves this hypothesis. At the equilibrium, gravitational fields of both seller and buyer as well as of both husband and wife are equal to the golden ratio conjugate. It means that any monopoly and monopsony really disappear. At the Invisible hand equilibrium, the transaction takes place between mutually attractive individuals. The equilibrium price stays competitive, but its economic nature is supported by the mutual respect of both parts in transaction.

Suggested Citation

  • Malakhov, Sergey, 2021. "Golden ratio of invisible hand: does the gravitation matter?," MPRA Paper 110674, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:110674
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    File URL: https://mpra.ub.uni-muenchen.de/111298/1/MPRA_paper_111298.pdf
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    References listed on IDEAS

    as
    1. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
    2. Stahl, Dale O, II, 1989. "Oligopolistic Pricing with Sequential Consumer Search," American Economic Review, American Economic Association, vol. 79(4), pages 700-712, September.
    3. Malakhov, Sergey, 2021. "Invisible hand equilibrium in family: the gravitation between men and women in marriage markets," MPRA Paper 108896, University Library of Munich, Germany.
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    More about this item

    Keywords

    golden ratio; invisible hand; gravitation; general competitive equilibrium;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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