Price discovery

The reason markets exist is to allow trade, and the reason we trade is because we have different marginal valuations of scarce goods. This video shows how demand and supply both originate from the concept of value.

I like using this video because it shows two really important things. the first is that middlemen don’t add costs to market exchange; rather, competition between middlemen reduce transactions costs and thus improve the efficiency of a market. And secondly, as Brian Albrecht has said:

“There’s no such thing as supply. It’s demand all the way down.”

brian albrecht

The best example of deadweight loss is this economics article:

However, economists Anthony Gill and Michael Thomas have argued in favour of gift giving.

  • Gill, A., & Thomas, M. (2023). The dynamic efficiency of gifting. Journal of Institutional Economics, 19(1), 70-85

Prof. Gill reads his poem below: