Architecture of Markets

Markets are socially constructed arenas where repeated exchanges occur between buyers and sellers under a set of formal and informal rules governing relations among competitors, suppliers, and customers. These arenas operate according to local understandings and rules that guide interaction, facilitate trade, define what products are produced, indeed constitute the products themselves, and provide stability for buyers, sellers, and producers. Marketplaces are also dependent on governments, laws, and cultural understandings supporting market activity. Our essay provides a brief exposition of this perspective. Then, it considers cutting-edge work on three topics: (i) the formation of markets and prices, (ii) the organization of capitalism in different societies, and (iii) financialization and globalization. We suggest that in the future, path breaking research will: (i) explore the sociology of consumption, (ii) combine insights from the sociology of markets and from studies of the role of economic thought in constructingmarkets, and (iii) investigate national and transnational regulations.