The Nature of Construction Markets

Abstract

In this chapter we apply a variety of approaches to understand the differences in operation of different markets. We begin with a critical appraisal of the neoclassical approach to the price mechanism, and propose to follow the line of argument given by Morishima (1984), who defines flexprice and fixprice markets. We find this approach altogether more realistic, because it enables an individual analysis of particular markets to take into account both specific features of the market and the way the market responds to changes in economic conditions over time. We apply this approach to various markets in property and construction.