A few times during my blogging about economics I have called attention to the significance of modality. Most of these were rather serious contexts (here, here, and here), mostly concerned with my desire to distinguish between uncertainty and randomness.
But we can't always be serious. So, today, let's stipulate we live in a world of subjective probabilities (and only subjective probabilities).
Now, what is a price from the point of view of a merchant? It is an expectation (with some uncertainty attached to it) about a future event, that is, a sale. That price is constrained, of course, by the activities of other merchants, and over time takes into account something like cost-plus a markup. (I think what I have just said is completely Smithian.) So, there are nearby possibilities that allow the merchant to play around with the price (that is, to allow what can be thought of as Austrian search qualities), but these are not unlimited.
That is to say, from the point of view of a merchant, prices are modal entities.
The same goes for other merchants, who will mutually influence each other. But there is no reason to believe all the merchants live in he same 'world'.
What will partially connect worlds are, of course, decisions of buyers. So revealed preference will become the metric by which we rank worlds. But revealed preference can have multiple currencies (money, status, applause, power), etc. So, the problem of multiple worlds remains.
That is to say, I give up on the law of one price as well as (I think) the law of supply and demand (understood as a causal story).
Anybody want to create a toy-model?
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