Essay on a theory of exchange and prices formation in the market for goods and services

This paper aimed to propose a theory of exchange and the formation of the prices of goods and services in any market. The theoretical essay is based on the postulate of the general theory of the firm according to which the company operates based on the compromise between the stakeholders. Thus, the process of the exchange is a process of compromise between the producer/seller and the buyer about their purposes: (i) the profit margin unit, (ii) the volume of the transaction and (iii) the savings that the buyer desires to realize on his maximum willingness-to-spend in the exchange. The mutually advantageous transaction is the solution of the maximization of the exchange compromise function, under the constraint of the maximum willingness-to-spend of the buyer. Several lessons have been highlighted.

Download the Paper