Probabilistic Theory of Stock Exchanges - страница 31

(t) and q^>S(t) denote the price and quantity of the good desired and offered by the seller for sell during negotiations with the buyer in the market. In their meaning, the values of prices and quantities introduced above are the main content of agent proposals to buy or sell the goods. Below, for brevity, we will denote these desired and offered values as buyer’s and seller’s quotations. And such a line of agents' behavior in the market will be called a discrete or point strategy, since at each time t these quotes are represented by one point in two-dimensional space, for example, point A with coordinates p^>D(t) and q^>D(t) for the buyer and point B with coordinates p^>S(t) and q^>S(t) for the seller, as presented in Fig. 1.2.

These quotations are made, of course, taking into account all the circumstances affecting the market operation: institutions, etc. In our view, quotations made by market agents are the essence of the main market phenomenon of classical economic theory in the view of the Austrian economic school, namely the market process [Mises, 2005], consisting of specific acts of choice and actions of market agents, which ultimately lead buyers and sellers to the conclusion of purchase and sale transactions. Graphically, we can depict these quotations as trajectories of agents' movement in economic space (Fig. 1.3). In real market life, these quotations are discrete time functions, but, for the sake of simplicity, we will depict them graphically (just like the S&D functions) as continuous straight lines. Such an approximation does not lead in this case to a loss of generality, because these functions are intended only to illustrate the most general details of the market mechanism and the way they are described (see Fig. 1.3). In their economic sense, such diagrams characterize the temporal dynamics of the market.

Fig. 1.2. Graphical representation of the discrete strategy of buyer’s and seller’s market behavior represented by the two points, A(p^>D, q^>D) and B(p^>S, q^>S), in the two-dimensional price-quantity space at some particular moment in time for the model grain market. p^>D = 280,0 $/ton, q^>D = 50,0 ton/year, p^>S = 285,0 $/ton, q^>S = 52,0 ton/year.

We will speak (for the sake of brevity) of this aggregate agents’ movement as market behavior, and sometimes as the economy evolution over time. All these terms are essentially synonymous in this context of discussion. Thus, by putting up desired prices and quantities as their quotations, buyers and sellers take part in the market process, proceeding here in the format of negotiations between bargaining people (