At 11.30 a.m., on December 8, 2020, Gong Gang, Chief Professor of Yunnan University of Finance and Economics, Honorary President of the School of Economics, President of the Financial Research Institute (FRI) and Executive Director of Center for New Structural Economics, attended the 102th Session of Chen Daisun Theoretical Economics Lecture and delivered a keynote speech on the theme of “Auction” or “Plain Posted Price” and 2020 Nobel Prize in Economics. The meeting was chaired by Associate Professor Zhao Zhun, and the teachers and students from the Institute of Economics of School of Social Sciences and School of Marxism, Tsinghua University, as well as Peking University participated in and discussed enthusiastically.
Professor Gong Gang compared and discussed the two modes of market transactions: “auction” and “plain posted price”. He believed that although “auction” was loved by mainstream economists and Nobel Prize in Economics was awarded to researchers of auction theory many times, and 2020 Nobel Prize in Economics was also granted to the researcher of auction theory, the application of auction was extremely limited: auction in fact cannot bring greater benefits to producers. The common trading pattern in economic society is “plain posted price”. This pattern means that manufacturers set their own prices, so the economic society is bound to be imperfectly competitive market economy. In such economy, the production of enterprises is determined by demand, and overcapacity is normal. Therefore, the plain posted price trading mode provides a micro foundation for Keynesian theory of production (or theory of effective demand). Such a ubiquitous and dominant trading mode in the market economy has not been paid attention to and studied in the existing economics literature, which is an important direction for scholars to focus on and study in the future. According to the reality, Professor Gong Gang pointed out that in terms of those commodities that are generally available without scarcity, “auction” cannot maximize the returns of manufacturers, so it is not the best trading mode for them. Because of this, the application of auctions is extremely limited and cannot be increasingly widespread. Even with the future technological progress (such as big data and the Internet), the trading mode will not develop towards the auction. With the advent of the era of big data and the Internet, we can see that livestream selling (sales) is becoming more and more common, and it is obviously a kind of “plain posted price” trading mode.
After the speech, students actively asked questions and carried out intense discussion. Professor Gong Gang answered questions for students, and told them that we should study for life, not for survival. Mr. Zhao Zhun made a summary statement to Professor Gong Gang’s speech, and gave him a memorial card of Chen Daisun Theoretical Economics Lecture. The Lecture was successfully concluded.
Contributed by Zhang Hongbo
