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Mechanism (sociology)

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In economics, a mechanism is a set of rules designed to bring about a certain outcome through the interaction of a number of agents each of whom maximizes their own utility.[original research?] In the real world,there are two economic mechanisms:market economy and planed economy.Market economy is an economy based on the transaction mechanism and division of labor in which the prices of goods and services are determined in a free price system set by supply and demand.[1] Market economy is often contrasted with a planned economy, in which a central government determines the price of goods and services using a fixed price system.

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  1. ^ Altvater, E. (1993). The Future of the Market: An Essay on the Regulation of Money and Nature After the Collapse of "Actually Existing Socialism. Verso. p. 57.
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