Friday, May 17, 2013

Prices Rule in Markets!

Sandra Vogel on PC Advisor tells readers about the visible instrument of the market HERE 
Best Chrome Extensions: Invisible Hand”
“Invisible hand is a shopping tool that compares prices across a range of different sources to find the lowest price for you. It specialises in flights, hotels and car rental with coverage of hundreds of airlines and thousands of hotels. …
However, a brilliant feature is that Invisible Hand will automatically pop up when you're shopping online to alert you if you can get the same product cheaper elsewhere.”
Markets always work through visible prices.  They cannot work without visible prices.  Writing a program to select the cheapest prices from data entered does not alter that fact.  Calling the program the “invisible hand” does not add anything to the function of prices, nor does its absence change anything about the role of visible prices.  It is purely a fad to make the PC Advisor appear trendy in modern terms and Sandra cleverer than may be the case.


Blogger Willy B Good said...

I think you are being unfairly rough on poor Sandra. Invisible hand is the name that the Forward internet company have given the search tool they created, not Ms Vogel. From what I can read she is merely reporting on the features of the search function. She did not come up with the name, has made no economic comment and isn't trying to be 'cleverer than may be the case'. If you have a gripe with someone it is the company that created the application, not Sandra Vogel or PCAdvisor. Here is the company website;

9:12 am  
Blogger Gavin Kennedy said...

Hi willy be good'
I accept your chastisement for me being too "rough". Nor do I have a "gripe" with the "invisible hand" company using the over-worn IH metaphor, like a spate of others in the wider brander of their products recently, including bands, not just brands.
Those responsible for the playful nonsense purvey it in academe.
I was making an important point, which all economists should recognise that markets are driven by prices, not invisible hands. But such is the obsession of many nowadays (since Samuelson in respect of the Academy) with naming markets as 'miraculous', 'mystical', and such like, that bringing a bit of realism about the use of the IH metaphor is an uphill battle.
I credited Sandra Vogel with a mention and she got hit with the debris unintentionally. Apologies to her of course. I shall be more careful in future.

9:20 am  

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