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The invisible hand of Laplace: The role of market structure in price convergence and oscillation

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  • Rabani, Yuval
  • Schulman, Leonard J.

Abstract

The “invisible hand” of the free market is remarkably effective at producing near-equilibrium prices. This is difficult to quantify, however, in the absence of an agreed model for out-of-equilibrium trade. Short of a fully reductionist model, a useful substitute would be a scaling law relating equilibration time and other market parameters. Even this, however, is missing in the literature.

Suggested Citation

  • Rabani, Yuval & Schulman, Leonard J., 2021. "The invisible hand of Laplace: The role of market structure in price convergence and oscillation," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:mateco:v:95:y:2021:i:c:s0304406821000136
    DOI: 10.1016/j.jmateco.2021.102475
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    References listed on IDEAS

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