# Can a market function if everyone has the same preferences

Assume everyone has the same preferences. Therefore there would be , for example, no trivial concept of liquidity preference differences etc.

Would the economy still work?

• Are these same preference kept in universal lock step? Or are they forced to be identical at one point in time? Preferences change, sometimes quite rapidly. For example, as I grow hungry, my preference for a given piece of food versus the money it would cost me goes up. After I have eaten, or even ordered, my preferences go down. – sharur Dec 20 '19 at 3:05
• Aren't they the same – user25255 Dec 20 '19 at 5:20

• @user25255 well first of all to get the exactly same preference you just need to have the same utility function for example everyone would have the following utility $U=x^0.5y^0.5$. If everyone has the same preference for saving meaning everyone has the same marginal propensity to consume (inverse of it gives you saving rate) everything is fine. If everyone would prefer to save 100% of their income everyone would die from starvation. Of course that would not work but that’s not just having the same preference that’s even one level higher of having no preference to consume and hence live at all – 1muflon1 Dec 20 '19 at 9:55