What is an imperfect market

One imperfect market put i. d. Usually represents most markets in reality. They are imperfect because at least one of the properties prescribed in economic theory is not present for a perfect market. On one imperfect market dissimilar goods that differ in packaging, presentation or shape are traded. Homogeneous goods are traded on the perfect market. Instransparency is also a characteristic of the imperfect market.

This means that buyers are not fully informed about quality and prices. On the imperfect market it also happens that the buyer develops preferences, since no homogeneous goods are offered. In addition to factual preferences, personal preferences can also arise if the buyer has preferences for business because he finds the staff particularly friendly or knows the owner personally. Furthermore, spatial preferences can be set on a imperfect market arise.

These arise because the buyer is too comfortable and often chooses the closest supplier and prefers the more distant, possibly cheaper one. The requirements of the imperfect market enable companies that have implemented their business plan to price their goods differently according to temporal or spatial characteristics. In addition, the vendors can reinforce the preferences of the buyers, e.g. B. through advertising, customer service or regular quality improvements.