As the above-mentioned factors, a competitive market would arise according to the Neocolonialist theory (Leis, 2003) Neo-realism is a major factor in Conte policy-making mic policymaking. Another area that can have gone wrong was in America since the subprime mortgage market is still active and millions of Americans still own homes; hence, there is no game of the future earnings when buying a house Leis, the neo-realist theory is based on the principle of “market failure” which means that if something went wrong or if there were several mistakes, the outcome could have changed the way we did things. We need to create a better understanding of market failure when discussing the recent economic meltdown of 2007/2008. Market failure is a concept that economists have long used with to explain how one single event such as a stock crash creates multiple uncertainties that lead to greater risks.
Consequently, this theory has received much attention across the globe in order to explain the coeffects effect of market failure. One way to think of market failure according to Neo-realism is through three facets. Here, Neo-realism uses the term perfect competition to describe a monopolistic market. Neo-realism explains market failure as resulting from several reasons.
Since the first publication of Michael Porter's Model of Competitive Advantage published in
1973, economists have been using this definition to write about market efficiency. The model is divided into four principles namely, perfect competition, efficient market, perfect information, and perfect knowledge. All these three principles are important in ensuring market efficiency. Second Principle: Efficient Market.
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