Weitzman in the news

Prices vs. Quantities1 

That a person not versed in economics should think primarily in terms of direct controls is probably due to the fact that he does not comprehend the full subtlety and strength of the invisible hand argument. The economist's attitude is somewhat more puzzling. Understanding that prices can be used as a powerful and flexible instrument for rationally allocating resources and that in fact a market economy automatically regulates itself in this manner is very different from being under the impression that such indirect controls are generally preferable for the kind of problem considered in this paper. 

Wettzman is an old school sandboxer with some results . He is old school in that they had no sound quantization theory at the time.

Someone wrote a book on is work recently. Weitzman knows about market uncertainty, ex post and ex ante results.

Sandbox version:

Quantity is ex ante, pricing is ex post.  Producers and consumers balance the flows first, then the consumer goes home and balances the budget with price limits. Producers do the same.

We can see the difference in our everyday lives.  We jump on the short queues and bypass the long queues (standard mechanism to maintain quantization). Then go home and complain that gas prices are high.  Price is a ratio, ratios do not work until the currency banker has stabilized credit flows such that they simulated a continuous flow with finite precision. Once the quantity flow is stable, velocity equation works and the inventory clerk can order inventory at a profitable price (or not).

The Nash equilibrium occurs when all agents agree on market uncertainty, the arbitrage is gone. That is what Weitzman was really noticing at equilibrium ex post.  The interesting question is when pricing requires a requantization. Krugman was the one who actually introduced quantization theory, but he called it agglomoration. We know how it works,. goods flow through a constrained channel requires goods be delivered in quantum baskets which are partially full.

The post is a long form complicated read for me, two or three reads and I have not fully picked it apart, I rarely do, it is work.