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A Rule of One.

Authors :
Shogren, Jason F.
Source :
American Journal of Agricultural Economics; Dec2006, Vol. 88 Issue 5, p1147-1159, 13p, 1 Diagram, 4 Charts, 1 Graph
Publication Year :
2006

Abstract

The article explains the principle, a rule of one. This means that one rational person is enough to make a market and that one irrational person is enough to break a game. The power of the market as an exchange institution rests in its ability to move resources from low- to high-valued uses. If one person is rational enough to look for arbitrage opportunities among the other irrational players, the market works. In contrast, it suffices for one person to behave irrationally for a game to yield outcomes that deviate from the predicted actions of rational behavior.

Details

Language :
English
ISSN :
00029092
Volume :
88
Issue :
5
Database :
Complementary Index
Journal :
American Journal of Agricultural Economics
Publication Type :
Academic Journal
Accession number :
23150515
Full Text :
https://doi.org/10.1111/j.1467-8276.2005.00926.x