Bossaerts, Peter and Plott, Charles R.
(2008)
*From Market Jaws to the Newton Method: The Geometry of How a Market Can Solve Systems of Equations.*
In:
Handbook of Experimental Economics Results.
Vol.1.
Elsevier
, Amsterdam, pp. 22-24.
ISBN 9780444826428.
https://resolver.caltech.edu/CaltechAUTHORS:20140317-150805221

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## Abstract

Since market equilibrium can be interpreted as a solution to a system of equations, "price discovery," as it called in the language of market makers, can be viewed as having "found" the solution. Of course the information needed to even formulate the equations does not exist in one place so the idea that markets are "searching" for the solution to a system of equations as a numerical process would search, cannot be taken literally. Nevertheless, it is interesting that the language that has evolved from the world of practical markets has such an interpretation and curiosity alone makes one wonder how markets settle on the particular pattern of prices that solve a particular system of equations.

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Additional Information: | © 2008 Elsevier B.V. | |||||||||

Record Number: | CaltechAUTHORS:20140317-150805221 | |||||||||

Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20140317-150805221 | |||||||||

Official Citation: | Peter Bossaerts, Charles R. Plott, Chapter 2 From Market Jaws to the Newton Method: The Geometry of How a Market Can Solve Systems of Equations, In: Charles R. Plott and Vernon L. Smith, Editor(s), Handbook of Experimental Economics Results, Elsevier, 2008, Volume 1, Pages 22-24, ISSN 1574-0722, ISBN 9780444826428, http://dx.doi.org/10.1016/S1574-0722(07)00002-9. (http://www.sciencedirect.com/science/article/pii/S1574072207000029) | |||||||||

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Deposited By: | Susan Vite | |||||||||

Deposited On: | 18 Mar 2014 21:28 | |||||||||

Last Modified: | 03 Oct 2019 06:17 |

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