Critical fluctuations of demand and supply

In order to describe price changes in open markets we introduce a virtual b alanced price which is determined by the distribution of dealers' expectati on at a time. The dealers do not know directly the virtual balanced price b ut they can only guess it from the time series of market prices. By this as sumption we derive a set of stochastic time evolution equations composed of the market price and the virtual balanced price as an extension of Langevi n type equations. (C) 1999 Published by Elsevier Science B.V. All rights re served.