Market Stability in Adam Smith: Competitive Process and Institutions
AbstractBased on the new way of studying the work of Adam Smith in greater depth, with greater attention being paid to the use and context of his language, this investigation examines the theory of competitive exchange described in The Wealth of Nations, with the aim of bringing new contributions to the field of decision-making beyond the utilitarian theoretical framework. We have found an exchange process with principles of behaviour that are very different to those described in the traditional literature, principally through the leading role of both the cognitive process of decision-making, and of institutions. This work concludes that natural price is a rule of equivalence that guarantees market consistency and that the cognitive process of its participants is described as a mechanism for forming expectations based on institutions outside the market. These conclusions allow us to redefine the hypotheses of Adam Smith’s system of price determination.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 15361.
Date of creation: 20 Jun 2011
Date of revision:
Classical; Adam Smith; Institutions; Market Structure and Pricing; Information and Knowledge.;
Find related papers by JEL classification:
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D4 - Microeconomics - - Market Structure and Pricing
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