1. A multitude of consumers and producers trade in the market.
2. Any market actor can trade in any commodity.
3. There are no impediments to moving between commodities. This is the so-called "frictionless" aspect.
4. There is perfect information in the marketplace. Information is uniformly distributed and exhaustive.
WorldCom’s misplacing 3.8 Billion Dollars violates the Fourth Axiom which I will refer to as the Information Axiom of Ideal Markets.
Under what conditions will people choose to participate in the value creation process. We all have limited resources and want to spend them in ways that will get us the most value. The premise of a fair market is that it is a fair game. We are finding out what we suspected that the game is rigged. There is a reason that business ethics counts. The most liquid resource of all financial capital has been attracted to us markets because it was the fairest game on the planet. No market will be Ideal just like in Physics we use the Ideal Gas or Ideal Room as a starting point and then poke virtual holes that we can communicate with Math to try to get a better understanding of nature.
So what are some of the effects to the Ideal Market when there are violations of the Information Axiom for the Ideal Market?
