Homogeneity (economy)

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In economics, homogeneity is a property of goods and services , being completely uniform and undifferentiated and showing neither quality differences nor preferences .

General

In order to gain knowledge , the sciences must first analyze and describe ideal states that cannot be found in this form in everyday life . These models can then be gradually brought closer to reality by means of decreasing abstraction . This is also the case with homogeneity, which applies to goods, services and markets (“homogeneous market”) and which can hardly be found in practice in this form. The rule is their contrast, the heterogeneity of markets, goods and services.

Homogeneity conditions

A homogeneous market exists when the customer has no preferences for the goods / services traded on it. Homogeneous goods are indistinguishable and indistinguishable goods whose respective units of measure are completely identical from the point of view of the consumer, so that there are no preferences with regard to the individual units and no differences in quality. Their similarity therefore gives consumers no reason to prefer a certain supplier or higher quality goods and gives sellers no reason to prefer certain consumers. Because they are indistinguishable, homogeneous goods are completely mutually substitutable . Their contrast is heterogeneous goods.

These conditions of homogeneity are rarely found in markets and in goods / services in reality. If, for example, only the delivery or payment conditions of the suppliers or creditworthiness / payment behavior of the customers differ in a small detail, the homogeneity condition is no longer met.

species

The following table shows the differences between homogeneous and heterogeneous goods:

criteria homogeneous goods heterogeneous goods
Market form Stock exchange , mail order business Shops , department stores
Market participants interact indirectly interact directly
Pricing Auctions , continuous price adjustment List prices , individual price negotiations

Homogeneous goods are only available on stock exchanges and in some cases by mail order . There the market participants appear only indirectly, because the handover of the trading objects does not take place directly between seller and buyer. Stock brokers or postal companies are connected between these .

Perfect markets

The perfect market is a conceptual model developed by economic theory, the assumptions of which cannot be realized in reality. Homogeneity is one of the many premises for perfect markets .

The following market conditions prevail in perfect markets:

These conditions are of a purely theoretical nature and can only approximately be met by exchanges. Homogeneous goods are trading objects on perfect markets with complete information for all market participants about the market data (supply, demand, price , product quality ). There is a uniform market price because different prices would be balanced out through arbitrage . All market participants behave as volume adjusters , because the price is a data parameter , the market volume an action parameter .

Individual evidence

  1. ^ Rolf Becker / Wolfgang Lauterbach, Bildung als Privileg , 2016, p. 426
  2. ↑ Wolfgang Hilke , Market, Market Forms and Market Behavior , in: Waldemar Wittmann (Ed.), Handwortbuch der Betriebswirtschaftslehre, Teilband 2, 1993, Sp. 2772 f.
  3. ↑ Walter Kortmann, Microeconomics: Methodology - Tasks - Terms , 2004, p. 277
  4. ↑ Jürgen Eichberger, Grundzüge der Mikroökonomik , 2004, p. 17
  5. ^ Hans-Joachim Panten / Horst Männel / Reinhold Stössel / Gerhard Fischer / Franz-Josef Trouvain / Adolf Hüttl / Manfred Wilsdorf / Hans Floitgraf, Volkswirtschaftslehre , 1975, p. 108
  6. ^ Hermann Witte, General Business Administration , 2007, p. 18
  7. ↑ Jürgen Eichberger, Grundzüge der Mikroökonomik , 2004, p. 18