economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analy ...

, a market is a composition of systems, institutions, procedures,

social relation A social relation or also described as a social interaction or social experience is the fundamental unit of analysis within the social sciences, and describes any voluntary or involuntary interpersonal relationship between two or more individuals ...

s or infrastructures whereby parties engage in exchange. While parties may exchange goods and services by

barter In trade, barter (derived from ''baretor'') is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists dist ...

, most markets rely on sellers offering their goods or services (including labour power) to buyers in exchange for

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...

. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate

trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exch ...

and enable the distribution and allocation of resources in a society. Markets allow any tradeable item to be evaluated and

price A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in t ...

d. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights (cf.

ownership Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as title, which may be separated and held by different ...

) of services and goods. Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale (local produce or stock registration). Markets can differ by products (goods, services) or factors (labour and capital) sold,

product differentiation In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others to make it more attractive to a particular target market. This involves differentiating it from co ...

, place in which exchanges are carried, buyers targeted, duration, selling process, government regulation, taxes, subsidies,

minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. B ...

s, price ceilings, legality of exchange, liquidity, intensity of speculation, size, concentration, exchange asymmetry, relative prices, volatility and geographic extension. The geographic boundaries of a market may vary considerably, for example the food market in a single building, the real estate market in a local city, the consumer market in an entire country, or the economy of an international

trade bloc A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states. Trade blocs can be stand-alone ...

where the same rules apply throughout. Markets can also be worldwide, see for example the global diamond trade. National economies can also be classified as

developed market In investing, a developed market is a country that is most developed in terms of its economy and capital markets. The country must be high income, but this also includes openness to foreign ownership, ease of capital movement, and efficiency of ma ...

s or developing markets. In mainstream economics, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services and

information Information is an abstract concept that refers to that which has the power to inform. At the most fundamental level information pertains to the interpretation of that which may be sensed. Any natural process that is not completely random, ...

. The exchange of goods or services, with or without

, is a

transaction Transaction or transactional may refer to: Commerce * Financial transaction, an agreement, communication, or movement carried out between a buyer and a seller to exchange an asset for payment *Debits and credits in a Double-entry bookkeeping sys ...

. Market participants consist of all the buyers and sellers of a

good In most contexts, the concept of good denotes the conduct that should be preferred when posed with a choice between possible actions. Good is generally considered to be the opposite of evil and is of interest in the study of ethics, morality, p ...

who influence its

, which is a major topic of study of

economic An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with t ...

s and has given rise to several theories and models concerning the basic market forces of

supply and demand In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labo ...

. A major topic of debate is how much a given market can be considered to be a "

free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...

", that is free from government intervention. Microeconomics traditionally focuses on the study of market structure and the efficiency of market equilibrium; when the latter (if it exists) is not efficient, then economists say that a

market failure In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. Market failures can be viewed as scenarios where ...

has occurred. However, it is not always clear how the allocation of resources can be improved since there is always the possibility of government failure.

Definition

In economics, a market is a coordinating mechanism that uses prices to convey information among economic entities (such as firms, households and individuals) to regulate production and distribution. In his seminal 1937 article " The Nature of the Firm",

Ronald Coase Ronald Harry Coase (; 29 December 1910 – 2 September 2013) was a British economist and author. Coase received a bachelor of commerce degree (1932) and a PhD from the London School of Economics, where he was a member of the faculty until 1951. ...

wrote: "An economist thinks of the economic system as being coordinated by the price mechanism....in economic theory we find that the allocation of factors of production between different uses is determined by the price mechanism". Thus the usage of the price mechanism to convey information is the defining feature of the market. This is in contrast to a firm, which as Coase put it, "the distinguishing mark of the firm is the super-session of the price mechanism". Thus, Firms and Markets are two opposite forms of organizing production; Coase wrote: There are also other hybrid forms of coordinating mechanisms, in between the hierarchical firm and price-coordinating market(e.g. global value chains,

Business Venture Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which ha ...

Joint Venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ...

, and

strategic alliance A strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. The alliance is a cooperation or collaboration which aim ...

s). The reasons for the existence of firms or other forms of co-ordinating mechanisms of production and distribution alongside the market are studied in "The Theory of the Firm" literature, with various complete and incomplete contract theories trying to explain the existence of the firm. Incomplete contract theories that are explicitly based on

bounded rationality Bounded rationality is the idea that rationality is limited when individuals make decisions, and under these limitations, rational individuals will select a decision that is satisfactory rather than optimal. Limitations include the difficulty of ...

lead to the costs of writing complete contracts. Such theories include: Transaction Cost Economies by Oliver Williamson and Residual Rights Theory by Groomsman, Hart, and Moore. Market-Firms's dichotomy can be contrasted with the relationship between the agents transacting. While in a market the relationship is short term and restricted to the contract, in the case of firms and other co-ordinating mechanisms it is for a longer duration. In the modern world much economic activity takes place through fiat and not the market. Lafontaine and Slade (2007) estimates, in the US, that the total value added in transactions inside the firms equal the total value added of all market transactions. Similarly, 80% of all World Trade is conducted under Global Value Chains (2012 estimate), while 33% (1996 estimate) is intra-firm trade. Nearly 50% of US imports and 30% of exports take place within firms. While Rajan and Zingales (1998) have found that in 43 countries two-thirds of the growth in value added between 1980 and 1990 came from increase in firm size.

Types

A market is one of the many varieties of systems, institutions, procedures,

s and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by

, most markets rely on sellers offering their goods or services (including labour) in exchange for

from buyers. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate

and enable the distribution and allocation of resources in a society. Markets allow any trade-able item to be evaluated and

d. A market sometimes emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights (cf.

) of services and goods. Markets of varying types can spontaneously arise whenever a party has interest in a good or service that some other party can provide. Hence there can be a market for cigarettes in correctional facilities, another for chewing gum in a playground, and yet another for contracts for the future delivery of a commodity. There can be

black market A black market, underground economy, or shadow economy is a clandestine market or series of transactions that has some aspect of illegality or is characterized by noncompliance with an institutional set of rules. If the rule defines the ...

s, where a good is exchanged illegally, for example markets for goods under a command economy despite pressure to repress them and virtual markets, such as

eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became ...

, in which buyers and sellers do not physically interact during negotiation. A market can be organized as an

auction An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition e ...

, as a

private electronic market A private electronic market (PEM) uses the Internet to connect a limited number or pre-qualified buyers or sellers in one market. PEMs are a hybrid between perfectly open markets (e.g. exchanges where there is no pre-existing relationship betwee ...

, as a commodity wholesale market, as a shopping center, as complex institutions such as international markets and as an informal discussion between two individuals. Markets vary in form, scale (volume and geographic reach), location and types of participants as well as the types of goods and services traded. The following is a non exhaustive list:

Physical consumer markets

Main Entrance - Stuart Saunders Hogg Market - Kolkata 2013-12-24 1394

* Food retail markets:

farmers' market A farmers' market (or farmers market according to the AP stylebook, also farmer's market in the Cambridge Dictionary) is a physical retail marketplace intended to sell foods directly by farmers to consumers. Farmers' markets may be indoors o ...

fish market A fish market is a marketplace for selling fish and fish products. It can be dedicated to wholesale trade between fishermen and fish merchants, or to the sale of seafood to individual consumers, or to both. Retail fish markets, a type of wet m ...

s, wet markets and

grocery store A grocery store ( AE), grocery shop ( BE) or simply grocery is a store that primarily retails a general range of food products, which may be fresh or packaged. In everyday U.S. usage, however, "grocery store" is a synonym for supermarket, ...

s * Retail marketplaces: public markets,

market square The market square (or sometimes, the market place) is a square meant for trading, in which a market is held. It is an important feature of many towns and cities around the world.Main Streets,

High Street High Street is a common street name for the primary business street of a city, town, or village, especially in the United Kingdom and Commonwealth. It implies that it is the focal point for business, especially shopping. It is also a metonym ...

s, bazaars, souqs,

night market Night markets or night bazaars are street markets which operate at night and are generally dedicated to more leisurely strolling, shopping, and eating than more businesslike day markets. They are typically open-air markets popular in East Asia, So ...

s, shopping

strip mall A strip mall, strip center or strip plaza is a type of shopping center common in North America where the stores are arranged in a row, with a sidewalk in front. Strip malls are typically developed as a unit and have large parking lots in front. ...

s and

shopping mall A shopping mall (or simply mall) is a North American term for a large indoor shopping center, usually anchored by department stores. The term "mall" originally meant a pedestrian promenade with shops along it (that is, the term was used to refe ...

s *

Big-box store A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The te ...

supermarket A supermarket is a self-service shop offering a wide variety of food, beverages and household products, organized into sections. This kind of store is larger and has a wider selection than earlier grocery stores, but is smaller and more lim ...

hypermarket A hypermarket (sometimes called a hyperstore, supercentre or superstore) is a big-box store combining a supermarket and a department store. The result is an expansive retail facility carrying a wide range of products under one roof, including ...

s and

discount store A discount store or discounter offers a retail format in which products are sold at prices that are in principle lower than an actual or supposed "full retail price". Discounters rely on bulk purchasing and efficient distribution to keep down cos ...

s * ''Ad hoc''

markets: process of buying and selling goods or services by offering them up for bid, taking bids and then selling the item to the highest bidder * Used goods markets such as

flea market A flea market (or swap meet) is a type of street market that provides space for vendors to sell Used good, previously-owned (second-hand) goods. This type of market is often seasonal. However, in recent years there has been the development o ...

s * Temporary markets such as fairs * Real estate markets

Physical business markets

Microcosm of London Plate 033 - Corn Exchange

* Physical wholesale markets: sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users or to other wholesalers and related subordinated services * Markets for

intermediate good Intermediate goods, producer goods or semi-finished products are goods, such as partly finished goods, used as inputs in the production of other goods including final goods. A firm may make and then use intermediate goods, or make and then sell, o ...

s used in production of other goods and services * Labour markets: where people sell their labour to businesses in exchange for a

wage A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', '' prevailing wage'', and ''yearly bonuses,'' and remun ...

* Online auctions and ''Ad hoc''

markets: process of buying and selling goods or services by offering them up for bid, taking bids and then selling the item to the highest bidder * Temporary markets such as

trade fair A trade fair, also known as trade show, trade exhibition, or trade exposition, is an exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products and services, meet with industry partners and ...

s * Energy markets

Non-physical markets

Media market A media market, broadcast market, media region, designated market area (DMA), television market area, or simply market is a region where the population can receive the same (or similar) television and radio station offerings, and may also in ...

s (broadcast market): is a region where the population can receive the same (or similar) television and radio station offerings and may also include other types of media including newspapers and Internet content * Internet markets (

electronic commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain manag ...

): trading in products or services using computer networks, such as the Internet * Artificial markets created by regulation to exchange rights for derivatives that have been designed to ameliorate

externalities In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...

, such as pollution permits (see carbon trading)

Financial markets

Financial market A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known in the financial mark ...

s facilitate the exchange of liquid assets. Most investors prefer investing in two markets: * The stock markets, for the exchange of shares in

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...

s (

NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed co ...

, AMEX and the

NASDAQ The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...

are the most common stock markets in the United States) * The

bond market The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, b ...

s There are also: * Currency markets are used to trade one currency for another, and are often used for speculation on currency exchange rates * The

money market The money market is a component of the economy that provides short-term funds. The money market deals in short-term loans, generally for a period of a year or less. As short-term securities became a commodity, the money market became a compon ...

is the name for the global market for lending and borrowing * Futures markets, where contracts are exchanged regarding the future delivery of goods are often an outgrowth of general

commodity market A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of invest ...

s *

Prediction market Prediction markets (also known as betting markets, information markets, decision markets, idea futures or event derivatives) are open markets where specific outcomes can be predicted using financial incentives. Essentially, they are exchange-trad ...

s are a type of speculative market in which the goods exchanged are futures on the occurrence of certain events; they apply the market dynamics to facilitate information aggregation *

Insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

markets *

Debt market The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, b ...

Unauthorized and illegal markets

Grey market A grey market or dark market (sometimes confused with the similar term " parallel market") is the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market p ...

s (parallel markets): is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer * markets in illegal goods such as the market for illicit drugs, illegal arms, infringing products, cigarettes sold to minors or untaxed cigarettes (in some jurisdictions), or the private sale of un pasteurized

goat milk Goat milk is the milk of domestic goats. Goats produce about 2% of the world's total annual milk supply. Some goats are bred specifically for milk. Goat milk naturally has small, well-emulsified fat globules, which means the cream will stay i ...

Mechanisms

In economics, a market that runs under

laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...

policies is called a

, it is "free" from the government, in the sense that the government makes no attempt to intervene through taxes,

subsidies A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the ter ...

s, price ceilings and so on. However, market prices may be distorted by a seller or sellers with

monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...

power, or a buyer with

monopsony In economics, a monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The microeconomic theory of monopsony assumes a single entity ...

power. Such price distortions can have an adverse effect on market participant's welfare and reduce the efficiency of market outcomes. The relative level of organization and negotiating power of buyers and sellers also markedly affects the functioning of the market. Markets are a system and systems have structure. The structure of a well-functioning market is defined by the theory of perfect competition. Well-functioning markets of the real world are never perfect, but basic structural characteristics can be approximated for real world markets, for example: * Many small buyers and sellers * Buyers and sellers have equal access to information * Products are comparable Markets where price negotiations meet equilibrium, but the equilibrium is not efficient are said to experience

. Market failures are often associated with

time-inconsistent preferences In economics, dynamic inconsistency or time inconsistency is a situation in which a decision-maker's preferences change over time in such a way that a preference can become inconsistent at another point in time. This can be thought of as there be ...

information asymmetries In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which c ...

, non-perfectly competitive markets,

principal–agent problem The principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity (the " agent") takes actions on behalf of another person or entity (the " principal"). The problem worsens when there is a gr ...

, or

public goods In economics, a public good (also referred to as a social good or collective good)Oakland, W. H. (1987). Theory of public goods. In Handbook of public economics (Vol. 2, pp. 485-535). Elsevier. is a good that is both non-excludable and non-ri ...

. Among the major negative externalities which can occur as a side effect of production and market exchange, are

air pollution Air pollution is the contamination of air due to the presence of substances in the atmosphere that are harmful to the health of humans and other living beings, or cause damage to the climate or to materials. There are many different type ...

(side-effect of

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a ...

and

logistics Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of ...

) and

environmental degradation Environmental degradation is the deterioration of the environment through depletion of resources such as quality of air, water and soil; the destruction of ecosystems; habitat destruction; the extinction of wildlife; and pollution. It is d ...

(side-effect of

farm A farm (also called an agricultural holding) is an area of land that is devoted primarily to agricultural processes with the primary objective of producing food and other crops; it is the basic facility in food production. The name is used ...

ing and

urbanization Urbanization (or urbanisation) refers to the population shift from rural to urban areas, the corresponding decrease in the proportion of people living in rural areas, and the ways in which societies adapt to this change. It is predominantly t ...

). There exists a popular thought, especially among

economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...

s, that free markets would have a structure of a perfect competition. The logic behind this thought is that market failure is thought to be caused by other exogenic systems, and after removing those exogenic systems ("freeing" the markets) the free markets could run without market failures. For a market to be competitive, there must be more than a single buyer or seller. It has been suggested that two people may trade, but it takes at least three persons to have a market so that there is competition in at least one of its two sides. However, competitive markets—as understood in formal economic theory—rely on much larger numbers of both buyers and sellers. A market with a single seller and multiple buyers is a

. A market with a single buyer and multiple sellers is a

. These are "the polar opposites of perfect competition". As an argument against such logic, there is a second view that suggests that the source of market failures is inside the market system itself, therefore the removal of other interfering systems would not result in markets with a structure of perfect competition. As an analogy, such an argument may suggest that capitalists do not want to enhance the structure of markets, just like a

coach Coach may refer to: Guidance/instruction * Coach (sport), a director of athletes' training and activities * Coaching, the practice of guiding an individual through a process ** Acting coach, a teacher who trains performers Transportation * Co ...

of a football team would influence the

referee A referee is an official, in a variety of sports and competition, responsible for enforcing the rules of the sport, including sportsmanship decisions such as ejection. The official tasked with this job may be known by a variety of other tit ...

s or would break the

rules Rule or ruling may refer to: Education * Royal University of Law and Economics (RULE), a university in Cambodia Human activity * The exercise of political or personal control by someone with authority or power * Business rule, a rule pert ...

if he could while he is pursuing his target of winning the game. Thus, according to this view, capitalists are not enhancing the balance of their team versus the team of

consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

- workers, so the market system needs a "referee" from outside that balances the game. In this second framework, the role of a "referee" of the market system is usually to be given to a

democratic Democrat, Democrats, or Democratic may refer to: Politics *A proponent of democracy, or democratic government; a form of government involving rule by the people. *A member of a Democratic Party: **Democratic Party (United States) (D) **Democratic ...

government.

Research

Disciplines such as

sociology Sociology is a social science that focuses on society, human social behavior, patterns of social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of empirical investigation and ...

economic history Economic history is the academic learning of economies or economic events of the past. Research is conducted using a combination of historical methods, statistical methods and the application of economic theory to historical situations and i ...

economic geography Economic geography is the subfield of human geography which studies economic activity and factors affecting them. It can also be considered a subfield or method in economics. There are four branches of economic geography. There is, primary secto ...

and

marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to empha ...

developed novel understandings of markets studying actual existing markets made up of persons interacting in diverse ways in contrast to an abstract and all-encompassing concepts of "the market". The term "the market" is generally used in two ways: # "The market" denotes the abstract mechanisms whereby supply and demand confront each other and deals are made; in its place, reference to markets reflects ordinary experience and the places, processes and institutions in which exchanges occurs # "The market" signifies an integrated, all-encompassing and cohesive capitalist world economy.

Economics

Political economy

Economics used to be called

political economy Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour ...

, as Adam Smith defined it in

The Wealth of Nations ''An Inquiry into the Nature and Causes of the Wealth of Nations'', generally referred to by its shortened title ''The Wealth of Nations'', is the '' magnum opus'' of the Scottish economist and moral philosopher Adam Smith. First published in ...

The earliest works of political economy are usually attributed to the British scholars Adam Smith,

Thomas Malthus Thomas Robert Malthus (; 13/14 February 1766 – 29 December 1834) was an English cleric, scholar and influential economist in the fields of political economy and demography. In his 1798 book '' An Essay on the Principle of Population'', Mal ...

, and

David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British political economist. He was one of the most influential of the classical economists along with Thomas Malthus, Adam Smith and James Mill. Ricardo was also a politician, an ...

, although they were preceded by the work of the French physiocrats, such as

François Quesnay François Quesnay (; 4 June 1694 – 16 December 1774) was a French economist and physician of the Physiocratic school. He is known for publishing the " Tableau économique" (Economic Table) in 1758, which provided the foundations of the idea ...

(1694–1774) and

Anne-Robert-Jacques Turgot Anne Robert Jacques Turgot, Baron de l'Aulne ( ; ; 10 May 172718 March 1781), commonly known as Turgot, was a French economist and statesman. Originally considered a physiocrat, he is today best remembered as an early advocate for economic lib ...

(1727–1781). Smith describes how exchange of goods arose: Peru - in the market (8444386334)

And explains how exchanged mediated by money came to dominate the market:

Microeconomics

Microeconomics (from Greek prefix ''mikro''- meaning "small" and economics) is a branch of economics that studies the behavior of individuals and small impacting organizations in making decisions on the allocation of limited resources (see

scarcity In economics, scarcity "refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good. ...

). On the other hand, macroeconomics (from the Greek prefix ''makro''- meaning "large" and economics) is a branch of economics dealing with the performance, structure, behavior and decision-making of an economy as a whole, rather than individual markets.

=Marginal revolution

Afghan market teeming with vendors and shoppers 2-4-09

The modern field of microeconomics arose as an effort of neoclassical economics school of thought to put economic ideas into mathematical mode. It began in the 19th century debates surrounding the works of Antoine Augustin Cournot,

William Stanley Jevons William Stanley Jevons (; 1 September 183513 August 1882) was an English economist and logician. Irving Fisher described Jevons's book ''A General Mathematical Theory of Political Economy'' (1862) as the start of the mathematical method in ec ...

Carl Menger Carl Menger von Wolfensgrün (; ; 28 February 1840 – 26 February 1921) was an Austrian economist and the founder of the Austrian School of economics. Menger contributed to the development of the theories of marginalism and marginal utility, ...

and

Léon Walras Marie-Esprit-Léon Walras (; 16 December 1834 – 5 January 1910) was a French mathematical economist and Georgist. He formulated the marginal theory of value (independently of William Stanley Jevons and Carl Menger) and pioneered the development ...

—this period is usually denominated as the Marginal Revolution. A recurring theme of these debates was the contrast between the

labor theory of value The labor theory of value (LTV) is a theory of value that argues that the economic value of a good or service is determined by the total amount of " socially necessary labor" required to produce it. The LTV is usually associated with Marxian e ...

and the subjective theory of value, the former being associated with classical economists such as Adam Smith,

and

Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...

(Marx was a contemporary of the marginalists). A labour theory of value can be understood as a theory that argues that economic value is determined by the amount of socially necessary labour time while a subjective theory of value derives economic value from subjective preferences, usually by specifying a

utility function As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosoph ...

in accordance with utilitarian philosophy. In his '' Principles of Economics'' (1890),A. Marshall, ''Principles of Economics'', 1890

Alfred Marshall Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist, and was one of the most influential economists of his time. His book '' Principles of Economics'' (1890) was the dominant economic textbook in England for many years. I ...

presented a possible solution to this problem, using the

model. Marshall's idea of solving the controversy was that the demand curve could be derived by aggregating individual consumer demand curves, which were themselves based on the consumer problem of maximizing

utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosoph ...

. The supply curve could be derived by superimposing a representative firm supply curves for the

factors of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the rela ...

and then market equilibrium (economic equivalent of

mechanical equilibrium In classical mechanics, a particle is in mechanical equilibrium if the net force on that particle is zero. By extension, a physical system made up of many parts is in mechanical equilibrium if the net force on each of its individual parts is ze ...

) would be given by the intersection of demand and supply curves. He also introduced the notion of different market periods: mainly

long run and short run In economics, the long-run is a theoretical concept in which all markets are in equilibrium, and all prices and quantities have fully adjusted and are in equilibrium. The long-run contrasts with the short-run, in which there are some constraints an ...

. This set of ideas gave way to what economists call perfect competition—now found in the standard microeconomics texts, even though Marshall himself was highly skeptical it could be used as general model of all markets.

=Market structure

Opposed to the model of perfect competition, some models of

imperfect competition In economics, imperfect competition refers to a situation where the characteristics of an economic market do not fulfil all the necessary conditions of a perfectly competitive market. Imperfect competition will cause market inefficiency when it hap ...

were proposed: * The

model, already considered by marginalist economists, describes a profit maximizing capitalist facing a market demand curve with no competitors, who may practice

price discrimination Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider in different markets. Price discrimination is distinguished from product different ...

. * Oligopoly is a

market form Market structure, in economics, depicts how firms are differentiated and categorised based on the types of goods they sell (homogeneous/heterogeneous) and how their operations are affected by external factors and elements. Market structure makes it ...

in which a market or industry is dominated by a small number of sellers. The oldest model was the spring water

duopoly A duopoly (from Greek δύο, ''duo'' "two" and πωλεῖν, ''polein'' "to sell") is a type of oligopoly where two firms have dominant or exclusive control over a market. It is the most commonly studied form of oligopoly due to its simplicity ...

of Cournot (1838) in which equilibrium is determined by the duopolists reactions functions. It was criticized by Harold Hotelling for its instability, by

Joseph Bertrand Joseph Louis François Bertrand (; 11 March 1822 – 5 April 1900) was a French mathematician who worked in the fields of number theory, differential geometry, probability theory, economics and thermodynamics. Biography Joseph Bertrand was ...

for lacking equilibrium for prices as independent variables. *

Monopolistic competition Monopolistic competition is a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another (e.g. by branding or quality) and hence are not perfec ...

is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g., by branding or quality) and hence are not perfect substitutes. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. The "founding father" of the theory of monopolistic competition is

Edward Hastings Chamberlin Edward Hastings Chamberlin (May 18, 1899 – July 16, 1967) was an American economist. He was born in La Conner, Washington, and died in Cambridge, Massachusetts. Chamberlin studied first at the University of Iowa (where he was influenced by Fr ...

, who wrote a pioneering book on the subject, ''Theory of Monopolistic Competition'' (1933).

Joan Robinson Joan Violet Robinson (''née'' Maurice; 31 October 1903 – 5 August 1983) was a British economist well known for her wide-ranging contributions to economic theory. She was a central figure in what became known as post-Keynesian economics. ...

published a book called ''The Economics of Imperfect Competition'' with a comparable theme of distinguishing perfect from imperfect competition. Chamberlin defined monopolistic competition as "challenge to traditional viewpoint of economics that competition and monopoly are alternatives and that individual prices are to be explained in terms of one or the other". He continues: "By contrast it is held that most economic situations are composite of both competition and monopoly, and that, wherever this is the case, a false view is given by neglecting either one of the two forces and regarding the situation as made up entirely of the other". Hotelling built a model of market located over a line with two sellers in each extreme of the line, in this case maximizing profit for both sellers leads to a stable equilibrium. From this model also follows that if a seller is to choose the location of his store so as to maximize his profit, he will place his store the closest to his competitor as "the sharper competition with his rival is offset by the greater number of buyers he has an advantage". He also argues that clustering of stores is wasteful from the point of view of transportation costs and that public interest would dictate more spatial dispersion. *

William Baumol William Jack Baumol (February 26, 1922 – May 4, 2017) was an American economist. He was a professor of economics at New York University, Academic Director of the Berkley Center for Entrepreneurship and Innovation, and Professor Emeritus at Pri ...

provided in his 1977 paper the current formal definition of a

natural monopoly A natural monopoly is a monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming ad ...

where “an industry in which multifirm production is more costly than production by a monopoly”. * Baumol defined a

contestable market In economics, the theory of contestable markets, associated primarily with its 1982 proponent William J. Baumol, held that there are markets served by a small number of firms that are nevertheless characterized by competitive equilibrium (and th ...

in his 1982 paper as a market where "entry is absolutely free and exit absolutely costless", freedom of entry in Stigler sense: the incumbent has no cost discrimination against entrants. He states that a contestable market will never have an economic profit greater than zero when in equilibrium and the equilibrium will also be efficient. According to Baumol, this equilibrium emerges endogenously due to the nature of contestable markets; that is, the only industry structure that survives in the long run is the one which minimizes total costs. This is in contrast to the older theory of industry structure since not only is industry structure not exogenously given, but equilibrium is reached without an ad hoc hypothesis on the behavior of firms, say using reaction functions in a duopoly. He concludes the paper commenting that regulators that seek to impede entry and/or exit of firms would do better to not interfere if the market in question resembles a contestable market.

=Market failure

Around the 1970s the study of

s came into focus with the study of

information asymmetry In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which ca ...

. In particular, three authors emerged from this period: Akerlof, Spence and Stiglitz. Akerlof considered the problem of bad quality cars driving good quality cars out of the market in his classic " The Market for Lemons" (1970) because of the presence of asymmetrical information between buyers and sellers.

Michael Spence Andrew Michael Spence (born November 7, 1943) is a Canadian-American economist and Nobel laureate. Spence is the William R. Berkley Professor in Economics and Business at the Stern School of Business at New York University, and the Philip H. Kn ...

explained that signaling was fundamental in the labour market since employers can't know beforehand which candidate is the most productive, a college degree becomes a signaling device that a firm uses to select new personnel.

Stiglitz Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the Joh ...

provided some general conditions under which market equilibrium is not efficient: presence of

, imperfect information and incomplete markets.

=State interference

= C. B. Macpherson identifies an underlying model of the market underlying Anglo-American liberal democratic political economy and philosophy in the seventeenth and eighteenth centuries: persons are cast as self-interested individuals, who enter into contractual relations with other such individuals, concerning the exchange of goods or personal capacities cast as commodities, with the motive of maximizing pecuniary interest. The state and its governance systems are cast as outside of this framework. This model came to dominant economic thinking in the later nineteenth century, as so called liberal economists such as Ricardo,

Mill Mill may refer to: Science and technology * * Mill (grinding) * Milling (machining) * Millwork * Textile manufacturing, Textile mill * Steel mill, a factory for the manufacture of steel * List of types of mill * Mill, the arithmetic unit of the A ...

Jevons Jevons may refer to: People * Frank Byron Jevons (1858–1936), British academic and philosopher * Frederic Jevons (born 1929), academic * Marshall Jevons, the name of a fictitious crime writer invented and used by William Breit and Kenneth G. Elzi ...

, Walras and later neo-classical economics shifted from reference to geographically located marketplaces to an abstract "market". This tradition is continued in contemporary

neoliberalism Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent ...

epitomised by the

Mont Pelerin Society The Mont Pelerin Society (MPS) is an international organization composed of economists, philosophers, historians, intellectuals and business leaders. Michael Novak, 'The Moral Imperative of a Free Economy', in '' The 4% Solution: Unleashing the ...

which gathered

Frederick Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, Jurisprudence, legal theorist and philosopher who is best known for his defense of classical lib ...

Ludwig von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberalism. He is ...

Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...

and Karl Popper, where the market is held up as optimal for wealth creation and human freedom and the states' role imagined as minimal, reduced to that of upholding and keeping stable property rights, contract and money supply. According to

David Harvey David W. Harvey (born 31 October 1935) is a British-born Marxist economic geographer, podcaster and Distinguished Professor of anthropology and geography at the Graduate Center of the City University of New York ( CUNY). He received his P ...

, this allowed for boilerplate economic and institutional restructuring under

structural adjustment Structural adjustment programs (SAPs) consist of loans (structural adjustment loans; SALs) provided by the International Monetary Fund (IMF) and the World Bank (WB) to countries that experience economic crises. Their purpose is to adjust the co ...

and post-Communist reconstruction. Similar formalism occurs in a wide variety of social democratic and Marxist discourses that situate political action as antagonistic to the market.

György Lukács György Lukács (born György Bernát Löwinger; hu, szegedi Lukács György Bernát; german: Georg Bernard Baron Lukács von Szegedin; 13 April 1885 – 4 June 1971) was a Hungarian Marxist philosopher, literary historian, critic, and aest ...

, a founder of Western Marxism insists that market relations necessarily lead to undue exploitation of labour and so need to be opposed ''in toto''. A central theme of empirical analyses is the variation and proliferation of types of markets since the rise of capitalism and global scale economies. The

Regulation school The regulation school (french: l'école de la régulation) is a group of writers in political economy and economics whose origins can be traced to France in the early 1970s, where economic instability and stagflation were rampant in the French eco ...

stresses the ways in which developed capitalist countries have implemented varying degrees and types of environmental, economic and social regulation, taxation and public spending, fiscal policy and government provisioning of goods, all of which have transformed markets in uneven and geographical varied ways and created a variety of mixed economies.

Economic coordination

Drawing on concepts of institutional variance and

path dependence Path dependence is a concept in economics and the social sciences, referring to processes where past events or decisions constrain later events or decisions. It can be used to refer to outcomes at a single point in time or to long-run equilibria ...

, varieties of capitalism theorists (such as Peter Hall and David Soskice) identify two dominant modes of economic ordering in the developed capitalist countries: *Coordinated market economies (such as

Germany Germany, officially the Federal Republic of Germany (FRG),, is a country in Central Europe. It is the most populous member state of the European Union. Germany lies between the Baltic and North Sea to the north and the Alps to the sou ...

and Japan) based on relational or incomplete contracting, network monitoring based on the exchange of

private information Privacy (, ) is the ability of an individual or group to seclude themselves or information about themselves, and thereby express themselves selectively. The domain of privacy partially overlaps with security, which can include the concepts of a ...

inside networks, and more reliance on collaborative, as opposed to competitive, relationships to build the competencies of the firm *Anglo-American liberal market economies: firms coordinate their activities primarily via hierarchies and competitive market arrangements. Coal power plant Datteln 2 Crop1

However, such approaches imply that the Anglo-American liberal market economies in fact operate in a matter close to the abstract notion of "the market". While Anglo-American countries have seen increasing introduction of neo-liberal forms of economic ordering, this has not led to simple convergence, but rather a variety of hybrid institutional orderings. Rather, a variety of new markets have emerged, such as for carbon trading or rights to pollute. In some cases, such as emerging markets for water in

England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe ...

and

Wales Wales ( cy, Cymru ) is a Countries of the United Kingdom, country that is part of the United Kingdom. It is bordered by England to the Wales–England border, east, the Irish Sea to the north and west, the Celtic Sea to the south west and the ...

, different forms of neoliberalism have been tried: moving from the state hydraulic model associated with concepts of universal provision and

public service A public service is any Service (economics), service intended to address specific needs pertaining to the aggregate members of a community. Public services are available to people within a government jurisdiction as provided directly through pub ...

to market environmentalism associated with pricing of environmental externalities to reduce

and efficient allocation of water resources. In this case liberalization has multiple meanings: *

Privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...

: change of ownership from state monopoly to private hands *

Commercialization Commercialization or commercialisation is the process of introducing a new product or production method into commerce—making it available on the market. The term often connotes especially entry into the mass market (as opposed to entry into ...

: pursuing efficiency, cost-benefit analysis and profit maximization by introducing prices in comparison with the bill system proportional to property value *

Commodification Within a capitalist economic system, commodification is the transformation of things such as goods, services, ideas, nature, personal information, people or animals into objects of trade or commodities.For animals"United Nations Commodity ...

: standardization, pricing to address water scarcity according to the Dublin principles and the Hague declaration In a period of fiscal and ideological crisis,

state failure A failed state is a political body that has disintegrated to a point where basic conditions and responsibilities of a sovereign government no longer function properly (see also fragile state and state collapse). A state can also fail if the ...

is seen as the catalyst for liberalization, however the failure in assuring

water quality Water quality refers to the chemical, physical, and biological characteristics of water based on the standards of its usage. It is most frequently used by reference to a set of standards against which compliance, generally achieved through ...

can bee seen as a driver for economic and ecological reregulation (in this case coming from the

European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been ...

). More broadly the idea of a water market failure can seen as the explanation for state intervention, generating a natural monopoly of hydraulic infrastructure and the regulation of externalities such as

water pollution Water pollution (or aquatic pollution) is the contamination of water bodies, usually as a result of human activities, so that it negatively affects its uses. Water bodies include lakes, rivers, oceans, aquifers, reservoirs and groundwater. Wate ...

. The situation however is not that simple, as the regulator may have the duty of introducing competition, which can be: *Direct competition or product competition *Surrogate competition *Competition for corporate control by mergers and takeovers *Procurement competition *Franchising Introduction of metering can result in both restriction and increase of consumption with LRMC pricing being the regulator ( Ofwat) preferred methodology.

Marketing

Market distribution

Paul Dulaney Converse and Fred M. Jones wrote: The methods of studying marketing are: *Functional approach: services or functions performed, what goods they are performed upon, what middlemen perform them *Commodity approach: what goods are marketed, what function are performed on them, what middlemen perform these functions *Institutional approach: what institutions, or middlemen, are engaged in distribution, what functions they perform, what good they handle PerceptualMap1

Businesses market their products/services to a specific segments of

consumers A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

: the defining factors of the markets are determined by demographics, interests and age/gender. A small market is a niche market, while a big market is a

mass market The term "mass market" refers to a market for goods produced on a large scale for a significant number of end consumers. The mass market differs from the niche market in that the former focuses on consumers with a wide variety of backgrounds wi ...

. A form of expansion is to enter a new market and sell/advertise to a different set of users.

Marketing management

The

marketing management Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and ac ...

school, evolved in the late 1950s and early 1960s, is fundamentally linked with the

marketing mix The term "marketing mix" is a foundation model for businesses, historically centered around product, price, place, and promotion (also known as the "4 Ps"). The marketing mix has been defined as the "set of marketing tools that the firm uses to ...

framework, a business tool used in marketing and by marketers. In his paper "The Concept of the Marketing Mix", Neil H. Borden reconstructed the history of the term "marketing mix". He started teaching the term after an associate, James Culliton, described the role of the

marketing manager Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and a ...

in 1948 as a "mixer of ingredients"; one who sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available ingredients, and at other times invents new ingredients no one else has tried. The functions of total marketing include

advertising Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...

, personal selling, packaging,

pricing Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acq ...

, channeling and

warehousing A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, ...

. Borden also identified the market forces affecting marketing mix: *Consumer buying behavior *Trade's behavior (

wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. I ...

and

retailing Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and ...

) *Competitors position and behavior: industry structure, product choice, oversupply,

and

innovation Innovation is the practical implementation of ideas that result in the introduction of new goods or service (economics), services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a ...

*Governmental behavior:

regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology Biology is the scientific study of life. It is a natural science with a ...

s Borden concludes saying that marketing is more an art than a science. The marketer

E. Jerome McCarthy Edmund Jerome McCarthy (February 20, 1928 – December 3, 2015) was an American marketing professor and author. He proposed the concept of the 4 Ps marketing mix in his 1960 book ''Basic Marketing: A Managerial Approach'', which has been one of ...

proposed a four Ps classification ( product,

, promotion,

place Place may refer to: Geography * Place (United States Census Bureau), defined as any concentration of population ** Census-designated place, a populated area lacking its own municipal government * "Place", a type of street or road name ** Ofte ...

) in 1960, which has since been used by marketers throughout the world. Koichi Shimizu proposed a 7Cs Compass Model (

commodity In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...

cost In Production (economics), production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one o ...

communication Communication (from la, communicare, meaning "to share" or "to be in relation with") is usually defined as the transmission of information. The term may also refer to the message communicated through such transmissions or the field of inqu ...

, channel,

, circumstances) to provide a more complete picture of the nature of marketing in 1981. Robert F. Lauterborn wrote about the Four P's in 1990 He instead advocated a four Cs classification which is a more consumer-oriented version of the four Ps that attempts to better fit the movement from mass marketing to niche marketing: *

Consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

: don't focus on product, study consumer wants and needs *

Cost In Production (economics), production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one o ...

: forget price, instead understand the consumer cost to satisfy that want or need, even driving time versus time spent with family matters *

Communication Communication (from la, communicare, meaning "to share" or "to be in relation with") is usually defined as the transmission of information. The term may also refer to the message communicated through such transmissions or the field of inqu ...

: forget promotion, instead focus on communication and create dialogue *

Convenience Convenient procedures, products and services are those intended to increase ease in accessibility, save resources (such as time, effort and energy) and decrease frustration. A modern convenience is a labor-saving device, service or substanc ...

: forget place, instead think about convenience to buy, know each market subsegment

Sociology

Economic rationality

Max Weber Maximilian Karl Emil Weber (; ; 21 April 186414 June 1920) was a German Sociology, sociologist, historian, jurist and political economy, political economist, who is regarded as among the most important theorists of the development of Modernity, ...

defines the measure of rational economic action as the: # Systematic distribution of utilities between present and future # Systematic distribution of utilities between various potential uses # Systematic production of utilities by manufacture or transportation by the owner of the means of production # Systematic acquisition by agreement of the powers of control and disposal over utilities, mainly by establishing corporate groups or by exchange Dilli Haat bargaining

Opposition of interests is typically resolved by

bargaining In the social sciences, bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service debate the price or nature of a transaction. If the bargaining produces agreement on terms, the transaction takes p ...

or by competitive biding: # Utilities, goods and labour are at the disposal of the individual without interference from others # Transportation can be seen as a part of the process of production # It is indifferent whether the individual is prevented from using force to interfere in the controls of others by means of a legal order,

convention Convention may refer to: * Convention (norm), a custom or tradition, a standard of presentation or conduct ** Treaty, an agreement in international law * Convention (meeting), meeting of a (usually large) group of individuals and/or companies in a ...

custom Custom, customary, or consuetudinary may refer to: Traditions, laws, and religion * Convention (norm), a set of agreed, stipulated or generally accepted rules, norms, standards or criteria, often taking the form of a custom * Norm (social), a ...

, self-interest or

moral standard Morality () is the differentiation of intentions, decisions and actions between those that are distinguished as proper (right) and those that are improper (wrong). Morality can be a body of standards or principles derived from a code of condu ...

s # Competition for the means of production may exist under various conditions # Anything which may be transferred between individuals by compensation may be an object of exchange # Conditions of exchange may be traditional, conventional (exchange of gifts) or rational (motivated by profit or need) # Regulations may threaten the source of supply Money may classified as: * Coined money is called "free money" or "market money" when it is coined by the mint without limit of amount * It is called "limited" money or "administrative money" if the issue of coinage if subject to a corporate group * It is called regulated money if the kind and amount of coinage is subject to rules Weber defines: * Market situation: all the opportunities of exchanging a good for money that are known by the participants * Marketability: degree of regularity that a good tends to be an object of exchange in the market * Market freedom: degree of autonomy enjoyed by the participants in price determination and competition * Market regulation: restrictions on marketability and market freedom, done by tradition, convention, law, voluntary action Radhanites

Weber defines "formal rationality of economic action" to designate the extent of quantitative

calculation A calculation is a deliberate mathematical process that transforms one or more inputs into one or more outputs or ''results''. The term is used in a variety of senses, from the very definite arithmetical calculation of using an algorithm, to t ...

or accounting and "substantive rationality" as the degree a group of persons is or could be adequately provided with good by means of oriented course of social action. A prominent entry-point for challenging the market model's applicability concerns exchange transactions and the '' homo economicus'' assumption of self-interest maximization. , a number of streams of economic sociological analysis of markets focus on the role of the social in transactions and on the ways transactions involve

social network A social network is a social structure made up of a set of social actors (such as individuals or organizations), sets of dyadic ties, and other social interactions between actors. The social network perspective provides a set of methods for ...

s and relations of trust,

cooperation Cooperation (written as co-operation in British English) is the process of groups of organisms working or acting together for common, mutual, or some underlying benefit, as opposed to working in competition for selfish benefit. Many animal ...

and other bonds. Economic geographers in turn draw attention to the ways exchange transactions occur against the backdrop of institutional, social and geographic processes, including class relations, uneven development and historically contingent path-dependencies.

Pierre Bourdieu Pierre Bourdieu (; 1 August 1930 – 23 January 2002) was a French sociologist and public intellectual. Bourdieu's contributions to the sociology of education, the theory of sociology, and sociology of aesthetics have achieved wide influence ...

has suggested the market model is becoming self-realizing in virtue of its wide acceptance in national and international institutions through the 1990s.

Abstraction, market agencement and framing

Michel Callon Michel Callon (born 1945) is a professor of sociology at the École des mines de Paris and member of the Centre de sociologie de l'innovation. He is an author in the field of Science and Technology Studies and one of the leading proponents of ac ...

traces the history of how the market as a place (fairs, flea markets, fish markets) became an abstract concept (market for ideas, dating market, job market) which he calls the interface market model. This abstraction proceeds in three layers: * Sellers, buyers, platform goods * Competition * Institutions The interface market model thus establishes that: # Agents and goods are distinguable # A transfer is a communication of property rights # Competition develops between

agent Agent may refer to: Espionage, investigation, and law *, spies or intelligence officers * Law of agency, laws involving a person authorized to act on behalf of another ** Agent of record, a person with a contractual agreement with an insuran ...

s # A

consists of monetary payments The limitations of this model are: # They do not take into account the material composition of market activities # They bracket out the constructive process of creating supply and demand, which leads to underestimating the crucial role played by bilateral transactions and the initiation of these transactions # They create unrealism through the concepts of aggregated supply and demand and bring about difficulties in comprehending the actual mechanisms for establishing prices # They create a total impasse on the complex processes that result in a separation between agents and goods # The hypothesis that goods are platforms precludes us from recognizing they are processes # A description of agents that underestimates their diversity, heterogeneity, and plasticity Callon offer the market agencements (heterogenous assemblage) model as an alternative, its features being: # Competition is the struggle to establish bilateral transactions that are never identical # Innovation is fundamental to commercial activity # Goods are processes # Profilerating agents, plastic identities and networking Yongsan Electronics Market (3385983467) (cropped)

Yongsan Electronics Market (3385983467) (cropped)

Market agencements function through framing, that is action is oriented to a strategic goal (obtaining bilateral transactions), for example market oriented passiva(c)tion: # Detaches the good and liberates it from all those who participated in its elaboration and profiling # Renders it apt to provoke courses of actions and to contribute to their realization (that is, imbues it with uses) # Ensures that its behavior is at least to a certain extent controllable and predictable # Organizes the attribution and transfer of

property right The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically ...

s Callon identifies the activities necessary for framing: # Rendering goods pass(act)ive # Activating agencies capable of evaluating and transforming these goods # Organizing their encounter # Ensuring the attachment of the goods to the agencies # Obtaining consent to pay # Setting a price and compelling payment–actions that combine and interweave with one another, with possible feedback loops and iterations

Embeddedness

Alfred Marshall wrote: Puritans-drinking-from-pewter-mugs-in-colonial-massachusetts

According to Max Weber the spirit of capitalism as preached by

Benjamin Franklin Benjamin Franklin ( April 17, 1790) was an American polymath who was active as a writer, scientist, inventor An invention is a unique or novel device, method, composition, idea or process. An invention may be an improvement upon a m ...

is directly connected with utilitarianism,

rationalism In philosophy, rationalism is the epistemological view that "regards reason as the chief source and test of knowledge" or "any view appealing to reason as a source of knowledge or justification".Lacey, A.R. (1996), ''A Dictionary of Philosophy' ...

and

Protestantism Protestantism is a Christian denomination, branch of Christianity that follows the theological tenets of the Reformation, Protestant Reformation, a movement that began seeking to reform the Catholic Church from within in the 16th century agai ...

. Luther calling was not a monastic one but involves the fullfilments of obligations imposed by one's position in the world. The pursuit of money and earthly goods was not viewed positively by

, the

Puritan The Puritans were English Protestants in the 16th and 17th centuries who sought to purify the Church of England of Roman Catholic practices, maintaining that the Church of England had not been fully reformed and should become more Protestant. P ...

s however emphasized that

God In monotheistic thought, God is usually viewed as the supreme being, creator, and principal object of faith. Swinburne, R.G. "God" in Honderich, Ted. (ed)''The Oxford Companion to Philosophy'', Oxford University Press, 1995. God is typically ...

blessings, like in the

Book of Job The Book of Job (; hbo, אִיּוֹב, ʾIyyōḇ), or simply Job, is a book found in the Ketuvim ("Writings") section of the Hebrew Bible (Tanakh), and is the first of the Poetic Books in the Old Testament of the Christian Bible. Scholars ar ...

, applied also to material life. The limitation of consumption inevitably results in

capital accumulation Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the fo ...

, therefore, for Weber, the Puritan's idea of the calling and ascetic conduct contributed to development of capitalism:

saving Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recur ...

is an ascetic activity. Embeddedness expresses the idea that the economy is not autonomous but subordinated to politics, religion, and social relations. Polanyi’s use of the term suggests the now familiar idea that market transactions depend on trust, mutual understanding, and legal enforcement of contracts. Michel Callon's concept of framing provides a useful

schema The word schema comes from the Greek word ('), which means ''shape'', or more generally, ''plan''. The plural is ('). In English, both ''schemas'' and ''schemata'' are used as plural forms. Schema may refer to: Science and technology * SCHEMA ...

: each economic act or transaction occurs against, incorporates and also re-performs a geographically and cultural specific complex of social histories, institutional arrangements, rules and connections. These network relations are simultaneously bracketed, so that persons and transactions may be disentangled from thick social bonds. The character of calculability is imposed upon agents as they come to work in markets and are “formatted” as calculative agencies. Market exchanges contain a history of struggle and contestation that produced actors predisposed to exchange under certain sets of rules. Therefore, for Challon, market transactions can never be disembedded from social and geographic relations and there is no sense to talking of degrees of embeddedness and disembeddeness. During the 20th century two common forms of critique were made: *Categories of 19th century

social science Social science is one of the branches of science, devoted to the study of societies and the relationships among individuals within those societies. The term was formerly used to refer to the field of sociology, the original "science of soc ...

such as class,

modernity Modernity, a topic in the humanities and social sciences, is both a historical period (the modern era) and the ensemble of particular socio-cultural norms, attitudes and practices that arose in the wake of the Renaissancein the "Age of Reas ...

or the West were social constructions *These categories were artificial and not universal These are common themes in interpretive

, cultural studies and

post-structuralism Post-structuralism is a term for philosophical and literary forms of theory that both build upon and reject ideas established by structuralism, the intellectual project that preceded it. Though post-structuralists all present different critiques ...

. However, as Timothy Mitchell points out this mode of thought tends to put aside the real, the natural and nonhuman: the idea that a universal processes exists such as modernity,

capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...

and

globalization Globalization, or globalisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences), is the process of foreign relation ...

should not be taken for granted. An emerging theme is the interrelationship, inter-penetrability and variations of concepts of

person A person (plural, : people) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and being a part of a culturally established form of social relations such as kinship, ownership of pr ...

commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...

and modes of exchange under particular market formations. This is most pronounced in recent movement towards

post-structuralist Post-structuralism is a term for philosophical and literary forms of theory that both build upon and reject ideas established by structuralism, the intellectual project that preceded it. Though post-structuralists all present different critique ...

theorizing that draws on

Michel Foucault Paul-Michel Foucault (, ; ; 15 October 192625 June 1984) was a French philosopher, historian of ideas, writer, political activist, and literary critic. Foucault's theories primarily address the relationship between power and knowledge, and ho ...

and

Actor Network Theory An actor or actress is a person who portrays a character in a performance. The actor performs "in the flesh" in the traditional medium of the theatre or in modern media such as film, radio, and television. The analogous Greek term is (), ...

and stress relational aspects of person-hood, and dependence and integration into networks and practical systems. Commodity network approaches further both deconstruct and show alternatives to the market models concept of commodities.

Social systems theory

social system In sociology, a social system is the patterned network of relationships constituting a coherent whole that exist between individuals, groups, and institutions. It is the formal structure of role and status that can form in a small, stable group. ...

s theory (cf.

Niklas Luhmann Niklas Luhmann (; ; December 8, 1927 – November 6, 1998) was a German sociologist, philosopher of social science, and a prominent thinker in systems theory. Biography Luhmann was born in Lüneburg, Free State of Prussia, where his father's fa ...

), markets are also conceptualized as inner environments of the economy. As horizon of all potential investment decisions the market represents the environment of the actually realized investment decisions. However, such inner environments can also be observed in further function systems of society like in political, scientific, religious or mass media systems.

Economic geography

Wilhelm Launhardt, a location theorist, wrote: Transportation can be carried either by stone-paved roads or railways, the former not being fully developed by private capital alone. A widespread trend in

and

is skeptical of the idea that it is possible to develop a theory to capture an essence or unifying thread to markets. For economic geographers, reference to regional, local, or

specific markets can serve to undermine assumptions of global integration and highlight geographic variations in the structures, institutions, histories, path dependencies, forms of interaction and modes of self-understanding of agents in different spheres of market exchange. Reference to actual markets can show

not as a totalizing force or completely encompassing mode of economic activity, but rather as "a set of economic practices scattered over a

landscape A landscape is the visible features of an area of land, its landforms, and how they integrate with natural or man-made features, often considered in terms of their aesthetic appeal.''New Oxford American Dictionary''. A landscape includes th ...

, rather than a systemic concentration of power". Mercado Negro, La Paz, Bolivia

Problematic for market formalism is the relationship between formal capitalist economic processes and a variety of alternative forms, ranging from semi- feudal and

peasant A peasant is a pre-industrial agricultural laborer or a farmer with limited land-ownership, especially one living in the Middle Ages under feudalism and paying rent, tax, fees, or services to a landlord. In Europe, three classes of peasan ...

economies widely operative in many developing economies, to informal markets,

systems,

worker cooperative A worker cooperative is a cooperative owned and self-managed by its workers. This control may mean a firm where every worker-owner participates in decision-making in a democratic fashion, or it may refer to one in which management is elected by ...

s, or illegal trades that occur in most developed countries. Practices of incorporation of non-Western peoples into global markets in the nineteenth and twentieth centuries did not merely result in the quashing of former social economic institutions. Rather, various modes of articulation arose between transformed and hybridized local traditions and social practices and the emergent

world economy The world economy or global economy is the economy of all humans of the world, referring to the global economic system, which includes all economic activities which are conducted both within and between nations, including production, consumpti ...

. By their liberal nature, so called capitalist markets have almost always included a wide range of geographically situated economic practices that do not follow the market model. Economies are thus hybrids of market and non-market elements. Helpful here is

J.K. Gibson-Graham J. K. Gibson-Graham is a pen name shared by feminist economic geographers Julie Graham and Katherine Gibson. Their first book ''The End of Capitalism (As We Knew It)'' was published in 1996, followed by ''A Postcapitalist Politics'' in 2006. ...

's complex topology of the diversity of contemporary market economies describing different types of transactions, labour and economic agents. Transactions can occur in

s (such as for

marijuana Cannabis, also known as marijuana among other names, is a psychoactive drug from the cannabis plant. Native to Central or South Asia, the cannabis plant has been used as a drug for both recreational and entheogenic purposes and in variou ...

) or be artificially protected (such as for

patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an sufficiency of disclosure, enabling disclo ...

s). They can cover the sale of

public good Public good may refer to: * Public good (economics), an economic good that is both non-excludable and non-rivalrous * The common good, outcomes that are beneficial for all or most members of a community See also * Digital public goods Digital pu ...

s under

privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...

schemes to co-operative exchanges and occur under varying degrees of monopoly power and state

. Likewise, there are a wide variety of economic agents, which engage in different types of transactions on different terms: one cannot assume the practices of a religious

kindergarten Kindergarten is a preschool educational approach based on playing, singing, practical activities such as drawing, and social interaction as part of the transition from home to school. Such institutions were originally made in the late 18th cent ...

multinational corporation A multinational company (MNC), also referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation or a stateless corporation with subtle but contrasting senses, i ...

state enterprise A state-owned enterprise (SOE) is a government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn profit for the governmen ...

, or community-based

cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-contro ...

can be subsumed under the same logic of calculability. This emphasis on proliferation can also be contrasted with continuing scholarly attempts to show underlying cohesive and structural similarities to different markets.Swedberg, 1994, p. 267 Gibson-Graham thus read a variety of alternative markets for

fair trade Fair trade is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and envir ...

and

organic food Organic food, ecological food or biological food are food and drinks produced by methods complying with the standards of organic farming. Standards vary worldwide, but organic farming features practices that cycle resources, promote ecological ...

s or those using local exchange trading system as not only contributing to proliferation, but also forging new modes of ethical exchange and economic subjectivities.

Anthropology

Economic anthropology is a scholarly field that attempts to explain human economic behavior in its widest historic, geographic and cultural scope. Its origins as a sub-field of anthropology begin with the Polish-British founder of anthropology,

Bronisław Malinowski Bronisław Kasper Malinowski (; 7 April 1884 – 16 May 1942) was a Polish-British anthropologist and ethnologist whose writings on ethnography, social theory, and field research have exerted a lasting influence on the discipline of anthropol ...

, and his French compatriot,

Marcel Mauss Marcel Mauss (; 10 May 1872 – 10 February 1950) was a French sociologist and anthropologist known as the "father of French ethnology". The nephew of Émile Durkheim, Mauss, in his academic work, crossed the boundaries between sociology and ...

, on the nature of gift-giving exchange (or

reciprocity Reciprocity may refer to: Law and trade * Reciprocity (Canadian politics), free trade with the United States of America ** Reciprocal trade agreement, entered into in order to reduce (or eliminate) tariffs, quotas and other trade restrictions on ...

) as an alternative to market exchange. Studies in economic anthropology for the most part are focused on exchange but they a complex relationship with the discipline of economics, of which it is highly critical: for example Trobianders described by Malinowski deviate from rational self-interested individual.Malinowski, Bronislaw. Argonauts Of The Western Pacific - An Account of Native Enterprise and Adventure in the Archipelagoes of Melanesian New Guinea - Read Books Ltd. Bronisław Malinowski's path-breaking work, '' Argonauts of the Western Pacific'' (1922), addressed the question "why would men risk life and limb to travel across huge expanses of dangerous ocean to give away what appear to be worthless trinkets?". He begins by describing trade in the South Sea: Kula bracelet

The economic situation can vary considerably depending on the tribes and islands: for example the Gumawana villagers are know as efficient sailors and for their skill in pottery, they are, however, island monopolists keeping the trade in their owns hands without improving it. In a series of three expeditions, Malinowski carefully traced the network of exchanges of bracelets and necklaces across the Trobriand Islands and established that they were part of a system of inter-tribal exchange: it is known as the Kula ring, a closed circuit in which necklaces of red shells go in a

clockwise Two-dimensional rotation can occur in two possible directions. Clockwise motion (abbreviated CW) proceeds in the same direction as a clock's hands: from the top to the right, then down and then to the left, and back up to the top. The opposite ...

motion and bracelets of white shell go in anticlockwise motion. Malinowski goes on to explain: MAP V - Argonauts of the western Pacific 1922 (page 136 crop)

MAP V - Argonauts of the western Pacific 1922 (page 136 crop)

In the 1920s and later, Malinowski's study became the subject of debate with the French anthropologist, Marcel Mauss, author of '' The Gift'' (''Essai sur le don'', 1925). Malinowski emphasized the exchange of goods between individuals and their non-altruistic motives for giving: they expected a return of equal or greater value (colloquially referred to as " Indian giving"). In other words,

is an implicit part of gifting as no "free gift" is given without expectation of reciprocity. In contrast, Mauss has emphasized that the gifts were not between individuals, but between representatives of larger collectivities. He stated that this exchange system was clearly linked to political authority. He argued these gifts were a "total prestation" as they were not simple, alienable commodities to be bought and sold, but like the " Crown jewels" embodied the reputation, history and sense of identity of a "corporate kin group", such as a line of kings. Given the stakes, Mauss asked "why anyone would give them away?" and his answer was an enigmatic concept, "the spirit of the gift". A good part of the confusion (and resulting debate) was due to a bad translation. Mauss appeared to be arguing that a return gift is given to keep the very relationship between givers alive; a failure to return a gift ends the relationship; and the promise of any future gifts. Based on an improved translate,

Jonathan Parry Jonathan Philip Parry, commonly referred to as Jon Parry, (born 1957) is professor of Modern British History at the University of Cambridge and Fellow of Pembroke College, Cambridge, Pembroke College. He has specialised in 19th and 20th century Bri ...

has demonstrated that Mauss was arguing that the concept of a "pure gift" given altruistically only emerges in societies with a well-developed market ideology. Rather than emphasize how particular kinds of objects are either gifts or commodities to be traded in restricted spheres of exchange,

Arjun Appadurai Arjun Appadurai (born 1949) is an Indian-American anthropologist recognized as a major theorist in globalization studies. In his anthropological work, he discusses the importance of the modernity of nation states and globalization. He is the fo ...

and others began to look at how objects flowed between these spheres of exchange. They shifted attention away from the character of the human relationships formed through exchange and placed it on "the social life of things" instead. They examined the strategies by which an object could be " singularized" (made unique, special, one-of-a-kind) and so withdrawn from the market. A marriage ceremony that transforms a purchased ring into an irreplaceable family

heirloom In popular usage, an heirloom is something that has been passed down for generations through family members. Examples are a Family Bible, antiques, weapons or jewellery. The term originated with the historical principle of an heirloom in ...

is one example whereas the heirloom, in turn, makes a perfect gift.

Mathematical modeling

Although

arithmetic Arithmetic () is an elementary part of mathematics that consists of the study of the properties of the traditional operations on numbers—addition, subtraction, multiplication, division, exponentiation, and extraction of roots. In the 19th c ...

has been used since the beginning of civilization to set prices, it was not until the 19th century that data was systematically collected and more advanced mathematical tools began to be used to study markets in the form of social statistics.

Business intelligence Business intelligence (BI) comprises the strategies and technologies used by enterprises for the data analysis and management of business information. Common functions of business intelligence technologies include reporting, online analytical pr ...

is also dated to 19th century, but it was with the rise of the computer that

business analytics Business analytics (BA) refers to the skills, technologies, and practices for continuous iterative exploration and investigation of past business performance to gain insight and drive business planning. Business analytics focuses on developing n ...

exploded. More recent techniques involve data mining and marketing engineering.

Size parameters

Market size can be given in terms of the number of buyers and sellers in a particular market or in terms of the total exchange of money in the market, generally annually (per year). When given in terms of money, market size is often termed "market value", but in a sense distinct from

market value Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', ''fair value'' or ''fair market value'', although the ...

of individual products. For one and the same goods, there may be different (and generally increasing) market values at the production level, the wholesale level and the retail level. For example, the value of the global illicit drug market for the year 2003 was estimated by the

United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and be a centre for harmonizi ...

to be US$13 billion at the production level, $94 billion at the wholesale level (taking seizures into account) and US$322 billion at the retail level (based on retail prices and taking seizures and other losses into account).United Nations, "2005 World Drug Report," Office on Drugs and Crime, June 2005, p. 16

/ref> File:Existing Home Sales Chart - Mar 09b.png, United States home sales (blue) File:2008 UK Book Sales Value.png, Book Sales in the United Kingdom File:LPO Market Size and Growth.png, Size and growth of the

legal outsourcing Legal outsourcing, also known as legal process outsourcing (LPO), refers to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company (LPO provider). When the LPO provider ...

market File:Global Mobile Applications Store Revenue.svg, Global mobiles applications market size