factual

Max U Works for Perishable Supply-Demand Markets

The maximizing-utility (Max U) model works well in ordinary supply-and-demand markets for perishable, non-re-tradeable commodities (like hamburgers and haircuts) because participants have fixed buyer/seller roles, property rights are perfectly enforced, and goods cannot be re-traded, reducing dependence on trust.

factualpending

Speaker

Vernon Smith

Evidence Quote

that model works well in in ordinary supply and demand markets--which are the kind of thing that it has to do with flows. And those really have to do with perishable commodities. I like to use an example: it's hamburgers and haircuts.

Source

Vernon Smith on Adam Smith and the Human EnterpriseEconTalk
Created: 6/13/2026, 12:22:45 AM

My Notes

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