i think the modern information technology is making the market more efficient and prices are closer to their equilibrium level. though, pricing is not based on direct bargaining, quoting the price by the online vendors and buyers is influenced by the demand and supply forces. the artificial intelligence and data mining facilittes the sellers and buyers in gauging the demand and supply conditions in the market more effectively. 

Although markets are more complex, that complexity does not negate the forces of supply and demand. The surpluses or shortages that occur when markets are out of balance are part of these forces. Generally, shortages would tend to create pressure for prices to increase, the opposite is generally true for surpluses. Obviously, information, logistics, time, and other factors add complexity; however, it is incomprehensible that supply and demand, and the forces related to them, are completely irrelevant.

Thankyou @Srikanth Potharla and @Rob Catlett

I don't know if modern ICTs make the market "more abstract". Surely they make agents more informed and allow an increased degree of competition (this is also fostered by the contemporary decrease in the transport costs as far as material goods are concerned). Moreover, note thet even in the classical theory pricing was not based on direct bargaining (actually direct bargaining leads to the indeterminateness of the equilibrium price or to exchanges at prices out of equilibrium). Indeed one of the unrealistic assumptions behind the notion of perfect competition is to treat all agents as price-takers. But if all people take the price from the market, who set the price? (note thate we cannot assume the presence of an auctioneer in all markets).

August Ernst Pattiselanno is right in thinking that classical theory of value is evermore relevant. He was only wrong in thinking that this became apparent because of the ICT development. The theory of price formation by demand and supply was already severely attacked by David Ricardo (1817) Principles of Political Economy and Taxation two century ago.

For more details, please read my paper:

The Revival of Classical Theory of Values

https://www.researchgate.net/publication/269393496_The_Revival_of_Classical_Theory_of_Values

Conference Paper The Revival of Classical Theory of Values

Thankyou @Andrea Salanti

Thanklyou @Yoshinori Shiozawa, I will study your writing

Dear  August Ernst,

If you have intention to read my papers, please start with my short working paper:

Sraffa’s research program is advancing

https://www.researchgate.net/publication/318959575_Sraffa%27s_research_program_is_advancing

I  wrote this brief explanation in response to Tiago Camarinha Lopes question.

What critical approach to neoclassical economics is superior? Piero Sraffa's or Oskar Lange's?

https://www.researchgate.net/post/What_critical_approach_to_neoclassical_economics_is_superior_Piero_Sraffas_or_Oskar_Langes

The working paper is practically a reproduction (with some grammatical corrections) of my answer to Tiago post # 12..

I have also posted the answers #5, #6, #8, #9, #11, but if you read what I have summarized in the form of working paper, I think it is sufficient.

Working Paper Sraffa’s research program is advancing

Thanks @Yoshinori Shiozawa

Dear colleagues,

Thank you for this stimulating debate. Professor Yoshinori Shiozawa is a meticulous researcher of the pricing theory and we have to learn a lot from his work.

In my opinion, the classical supply-demand theory (grounded by exponents such as Adam Smith, Leon Walras, Carl Menger, William Stanley Jevons) holds water and it will always be an anchor of the economic theory framework. However it is continuously developing together with the technological, societal, behavioural and even geopolitical changes. Marketing factors might influence a purchase decision more than the labour required to produce goods and services and the real marginal utility.

In this regards, I recommend a recent contribution, Price Theory in Economics by Thomas Weber, it is sagacious.

http://econspace.net/papers/Price-Theory-OUP-Preprint.pdf. 

Best wishes,

Monica

Very good, thank you @Moniva

Thanks @Iulia Monica Oehler-Sincai

This is an addendum to my short working paper "Sraffa’s research program is advancing" that I have cited above. I have uploaded as a data to my project. I hope readers of this page will be interested. 

A brief addendum: An aspect of the history of economic theory before Ricardo

2017.8.27

Yoshinori Shiozawa

This year 2017 is the bicentennial year of Ricardo's Principles of Political Economic and Taxation (the first edition). It was celebrated in the annual conference of the Japanese Society for the History of Economic Thought by a special session on Ricardo. The organizer of the session was Yuji Sato who is also the reader of the first paper of the session.

In his summery to his paper Ricardo's criticism of Adam Smith, Sato proposed to make clear the theoretical core or its grand framework of classical political economy. His main contention was two: (1) the theoretical core of the classical political economy was formulated by the introduction of twin concepts: natural prices and market prices; (2) the concept of natural prices was introduced by William Petty and Richard Cantillon succeeded him and completed the duality natural and market prices.

Petty used the term "natural prices" at least three times in his A Treatise of Taxes and Contributions (1662) to indicate something different from actual prices, something that is determined by more perpetual causes and independent of contingent ones. It is also important that Petty fixed the natural price as the target of economics analysis. Cantillon succeeded this core stance and made the comparison clearer by the twin concepts.

In Sato's paper, there were several citations from Cantillon's Essay on the Nature of Trade (1755). I was attracted by one of those citations.

• There is never a variation in intrinsic values, but the impossibility of proportioning the production of merchandise and produce in a State to their consumption causes a daily variation, and a perpetual ebb and flow in Market Prices. However in well organized Societies the Market Prices of articles whose consumption is tolerably constant and uniform do not vary much from the intrinsic value; and when there are no years of too scanty or too abundant production the Magistrates of the City are able to fix the Market Prices of many things, like bread and meat, without any on having cause to complain. (I.X.11, Cited from the text in the Library of Economics and Liberty. Translation by Henry Higgs.)

Cantillon explains that perpetual fluctuation of market prices occurs because it is impossible to make the production of a product proportional [let us interpret this word to mean equality] to its daily consumption. This statement is astonishing. Take the contraposition of this statement. It means this: if it is possible to make the production always equal to the consumption, the prices ceases to fluctuate (and becomes equal to its natural price).

In the age of classical political economy, the main commodities were agricultural products. They are normally produced once a year. During the interval between the two harvests, the amount of production was fixed and was impossible to change it. Cantillon knew that this is the main reason why market prices fluctuate perpetually. Even in the time of Ricardo, the state remained practically the same and it was necessary that all commodity prices always fluctuate.

What happens, however, if the situation changes? After the industrial revolution, many industrial products came to be produced in a smaller interval and it became possible to change the amount of production in a fixed period. If a product is produced within an hour, it is possible to change the daily amount of product. Roughly speaking, in the industrial economy, after the mid 19th century, it became possible to regulate daily produce if the producer wants. This meant that Cantillon's necessary condition was removed. It was now possible to make as much as it sells. This caused a great transition of phases: from price adjustment economy to quantity adjustment economy.

If economics had acknowledged this phase transition correctly, it would have become something similar to classical theory of value. Producers set prices of their products and produce as much as they sell. Curiously, the actual history of economics was to emphasize the market prices and tried to explain price fluctuation by demand and supply equilibrium. Even today, many economists still imagine a situation standard where the supply is determined and demand is adjusted by price fluctuations, contrary to the fact.

Cantillon's remark means that classical economy form the time of Cantillon to Ricardo knew the price mechanism in a more realistic way than the neoclassical economics, because they knew the real reason of the price fluctuation. Cantillon knew the rule that necessitates price fluctuations. If the cause changes or vanishes, the mode of transaction does. It is astonishing that Cantillon knew the cause and mechanism of the market by a rule which is essentially valid even in the modern economy of the 21st century.

Sraffa's research program is firmly based on this classical understanding of the "nature of trade."

Thankyou @yoshinori shiozawa

The I-Net cannot alter the laws of the economy as expressed by the foundations of classical theory; the new economy illusion of the 1990s already proved that.

Thankyou @stephen