Perfect market

Perfect market

A perfect market is heuristic and has the following assumptions [How to Think Like Benjamin Graham and Invest Like Warren Buffet; Lawrence A. Cunningham; McGraw-Hill Professional; 2001; page 22] :
*Rationality of all market actors (Rationality in meaning of the actor's utility maximization)
*No transaction costs (particularly no information costs and no taxes)
*Price taking behavior - there is a sufficiently large number of participants such that no individual can affect the market
*given rare resources
*freedom of decision to do something or to let it be (no external effects)

Share and foreign exchange markets are commonly seen to be the most similar to the perfect market. The real estate market is an example of a very imperfect market.

See also

*Market failure

References

External links

The Perfect Market Economy [http://www.encycogov.com/B10CompetitionInProductMarkets/App10PerfectMarketModel/Exhi_Perf_market_econ.asp]


Wikimedia Foundation. 2010.

Игры ⚽ Поможем написать реферат

Look at other dictionaries:

  • perfect market — ➔ market1 * * * perfect market UK US noun [S] ► ECONOMICS a market where the sellers of a product or service are free to compete fairly, and sellers and buyers have complete information: »The internet has a big part to play in the creation of a… …   Financial and business terms

  • perfect market — noun (economics) A market where there are many buyers and sellers, none of whom can influence prices individually • • • Main Entry: ↑perfect …   Useful english dictionary

  • perfect market — /ˌpɜ:fɪkt mɑ:kɪt/ noun an imaginary market where there is perfect competition …   Marketing dictionary in english

  • Perfect market view of dividend policy — Analysis of a decision on dividend policy, in a perfect capital market environment, that shows the irrelevance of dividend policy in a perfect capital market. The New York Times Financial Glossary …   Financial and business terms

  • perfect market view — (of capital structure) Analysis of a firm s capital structure decision, which shows the irrelevance of capital structure in a perfect capital market. Bloomberg Financial Dictionary (of dividend policy) Analysis of a decision on dividend policy,… …   Financial and business terms

  • Perfect market view of capital structure — Analysis of a firm s capital structure decision, which shows the irrelevance of capital structure in a perfect capital market. The New York Times Financial Glossary …   Financial and business terms

  • perfect market assumptions — Conditions under which the law of one price holds. The assumptions include frictionless markets , rational investors, and equal access to market prices and information. Bloomberg Financial Dictionary …   Financial and business terms

  • market — Usually refers to the equity market. The market went down today means that the value of the stock market dropped that day. Bloomberg Financial Dictionary * * * ▪ I. market mar‧ket 1 [ˈmɑːkt ǁ ˈmɑːr ] noun 1. [countable] COMMERCE the activity of… …   Financial and business terms

  • market — marketer, n. /mahr kit/, n. 1. an open place or a covered building where buyers and sellers convene for the sale of goods; a marketplace: a farmers market. 2. a store for the sale of food: a meat market. 3. a meeting of people for selling and… …   Universalium

  • Perfect pass — is a digital precision speed controls system used to control boat speed, used on high performance water ski and wakeboard boats. It has been the dominate leader in the speed control market for competitive water sports since it s conception in… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”