“Where do prices come from?”

Jens Beckert, “Where do prices come from?” Socio-Economic Review, 2011, link:

In market economies, prices are the result of supply and demand. But are they really? In this article I challenge this basic premise of economic price theory and argue instead that prices result from the embeddedness of market trans- actions in institutions, social networks and culturally anchored frames of meaning. This does not deny that supply and demand play a role in price changes, but proposes that supply and demand are shaped by the social and pol- itical forces operating in market fields as well as the social and cultural contexts forming the preferences of actors. Price changes can only be explained indepen- dently from the embeddedness of economic transactions if the underlying shifts in supply and demand occur while this embeddedness remains constant.

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