Inna Borodina - Interdisciplinary theory of commercial communication. First part

The simplest example of modeling a market, dynamic equilibrium of price demand and price supply is the linear Evans model27. The main assumption of the model is based on the fact that price changes proportionally effect of changes in supply and demand growth. The functional relationship between supply and demand is modeled using paired linear regression. Regression coefficients are calculated during simulation, based on statistical data. The utility of commodity consumption is defined as the equality of supply and demand25, provided that the found optimal price P* is the root of the equation D(P)=S(P) , where D(P) is the demand or solvent need of an individual, S(P) is the commodity supply. The quantity (volume) of demand is the quantity of goods or services that consumers want and can buy at every possible price for a certain time under given conditions25.

The solution to this simple equation can be found by the iterative method, by successive approximations P0, P1, …, Pk-1, Pk, .... It should be noted that the product supply lags one iteration behind the demand for the product, which can be written as D(Pk)=S(Pk-1) . This is an important factor very often determining the result of the influence of commercial information.

The graphical representation of the iterative process can be associated with the appearance of the web, which is formed around the point of intersection on the graph of the curves of price demand and supply, and is called the "Cobweb model".

As a lyrical remark reflecting the vital necessity of interdisciplinarity, I will point out a small observation related to economics as a science in Russia and linguistics, which have completely lost all relation to science as such, especially economic.

Hopefully most economists are well-known with the world best seller “Economics”, translated into Russian. I am perplexed because of the illustrations of the market laws of economics in the famous translation of the book "Economics" depicted in an atypical mathematical representation.

The axes of the values of functions and arguments are inverted, and the graphs themselves may be misunderstood by a poorly mathematically trained reader.

Bad mathematical preparation in this case can affect the perception of the text so that the reader perceives the price of the product as a function, and supply and demand are mathematical arguments. I see this in two ways.

First, such an interpretation of supply and demand models is associated with the structure of the English language and the semantics of the concepts of "demand" and "supply".

I kept the translation “the curves of price demand and supply” not trying to get mathematical accuracy in the translation. Because, in fact, this is a correct verbal interpretation of a socio-economic phenomenon.

Secondly, practice shows that as demand for a product grows or in the absence of a decrease, the seller sets a higher price than the original price in an effort to increase profits.

So the limitations of mathematical models give way to socio-economic phenomena, and language, being actually a social phenomenon, helps the researcher to understand the essence of the approach that he studies.

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