|
Sponsored Links
A price mechanism or market-based mechanism is any of a wide variety of ways to match up buyers and sellers. Generally speaking, when two parties wish to engage in a trade, the purchaser will announce the highest price he is willing to pay (the bid price) and seller will announce the lowest price he is willing to accept (the ask price). The main advantage of such methods is that conditions are laid out in advance and transactions can proceed with no further permission or authorization from any participant. When any bid and ask pair are compatible, a transaction occurs, in most cases automatically. When trading in a stock market, a person who has shares to sell may not wish to sell them at the current market price (quote). Likewise, a person who wishes to buy shares may not wish to pay the current market price either. Some negotiation is necessary in order for a transaction to occur.
|
Price Mechanism Subcategories
Price Mechanism Articles
|
| 
