We are very pleased to announce that we have recently added a new report, Through Thick & Thin: Networks & the Formation of Markets. The new report is the sixth in our first series of reports — Networks & Platforms: The Economics of Order — and is especially significant in that it completes the series. This series lays out not only a new approach to analyzing and understanding networks and platforms but also the fundamentals of a new economic framework, one that determines and integrates the source and nature of “order”. Future series of reports will focus on applying the framework in specific political or market contexts.
Mainstream economics has assumed the existence of the markets or taken them as given. It has devoted little, if any, attention to the process by which markets themselves are formed, how it is that they arise, what makes them stable or liquid, etc. To fail to understand the formation of markets is to fail to understand the source of economic coordination. As a result, mainstream economics has little or no understanding of how the market order and economic coordination can be subverted or made unstable by policy.
It is clear from our work to date, however, that networks are the foundation or source of the market order. In this report, we expand on that theme by returning briefly to the issue of networks and market demand and then by exploring how a) the quality of the network underpinning any given market is the product of the interplay between demand and supply, b) the network dynamic implies the interdependence of demand and supply, c) the interdependence of demand and supply via the network dynamic promotes economic coordination, d) price elasticity, price stability, liquidity, market thickness and, in fact, the notion of a “market price” itself are all products of the network dynamic, and e) economic profit, rent and transaction costs are driven by the network dynamic. We also introduce a new dynamic conception of equilibrium, articulate the process of market discovery, discuss the implications of equilibrium and disequilibrium systems, and determine the source of market stability and instability. Finally, we examine the dynamics of market instability or market breakdown.
A downloadable table of contents (TOC) in pdf format is available, as with all other reports. The TOC supplements the written description provided on each report’s web page. To access the TOC for any given report:
- Click on the “More Details” button associated with the report on our Reports page — this will take you to the web page dedicated to that report;
- Scroll down a bit and you will see a “DOWNLOAD TABLE OF CONTENTS (PDF)” link;
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Please do not hesitate to contact us if you have any questions regarding these or any of our other reports.