What is a Market ? On the Methodology of a Contested Concept

Some economists find markets everywhere and assume that they emerge spontaneously once a set of necessary conditions such as well-defined property rights is fulfilled. Others emphasise the role of organisations and contend that markets are actually less dominant. But despite claims to the contrary, the market concept is hardly analyzed in depth. Nor are there serious attempts to examine empirically where markets exist. Against this background, the paper addresses the question of what is a market? It begins by illustrating how the literature has hitherto defined the concept of a market. On the basis of methodological considerations, which center on the subject matter of economic analysis, the paper provides a revised conceptualisation of markets in terms of those conditions under which stylised facts about relative prices can be observed. The final part of the paper discusses the link between the conceptualisation of a market and the informational role of relative prices highlighted by the Austrian School.