Expectation as Value: A Unified Framework from Positive Infinity to Negative Infinity and the Expectation Lock-in Theory of Market Steady State
Year: 2026
Type: preprint
Abstract: ## V2.0 → V2.1 Update Notes 1. **Deletion of the Market Intervention Threshold (MIT) conceptual framework.** MIT provided only a generic decision rule—"intervene when expected benefits exceed expected costs"—without being endogenously derived from the M₁→F₁→Y→F₂→M₂ causal chain, and without specifying how intervention signals penetrate the Y-layer or drive M₂ updating. V2.1 removes this framework and clarifies the theoretical boundary of this paper: explaining the formation, maintenance, and reversal of expectation lock-in, without separately constructing a regulatory intervention model. 2. **Clarification of the intervention efficacy criterion.** In V2.0, "intervene when p > MIT; terminate when p < MIT" was presented alongside "efficacy is judged not by numerical decline in p, but by sustained M₂ updating," risking conflation of the intervention threshold with the efficacy criterion. With MIT removed, the intervention mechanism is unified back into the paper's existing causal chain: F₁ signal input → reverse trust accumulation → Y recalibration → sustained M₂ updating. 3. **Chapter 5 structural adjustment.** The Chapter 5 introductory paragraph removes the "from diagnosis to intervention" framing. The original "Market Health Critical Threshold Hypothesis" is repositioned as §5.6.1; the original "Full-Scale Foundations of Expectation Lock-in" is repositioned as §5.6.2; the §5.6 heading is renamed "Market Health Critical Threshold Hypothesis and Full-Scale Foundations." 4. **Revisions to conclusions and research limitations.** The reference to MIT variable measurement as a subsequent research interface is removed; the direction for future research is adjusted to the empirical calibration of the market health critical interval. Research limitations retain the econometric operationalization of the negative-value determination procedure. 5. **Reference streamlining.** Five references from V2.0 that served only the MIT framework are deleted: Pauker & Kassirer, McCall, Granovetter, Dixit & Pindyck, and Ellsberg. The reference count is reduced from 96 to 91. The five vacated positions at the end of the list are filled by shifting subsequent references forward, with corresponding in-text citations adjusted accordingly. This adjustment does not alter the substantive argumentation. This upgrade does not modify the value continuum, supply-and-demand curve derivation, negative-value determination, expectation lock-in mechanism, or trust reversal theory; it solely removes an external decision model that was not endogenously connected to the core causal chain. Abstract The essence of value is the direct reading of a subject's expectation regarding an object. The same bottle of mineral water sells for 2 yuan in a convenience store and 20 yuan in a five-star hotel; for a person dying of thirst in a desert, its value rises sharply; when news of an approaching rescue arrives, the value collapses instantaneously. Throughout this process, the physical attributes, production costs, and physical scarcity of the water remain entirely unchanged—the only variable that changes is expectation. This article is the eighth study in the Expectation Emergence Model (MFY) series [9]. The MFY framework has established two causal foundations in the seventh [44] and eleventh [8] articles: "the past does not directly determine the present; expectation Y is the sole legitimate intervention target" and "Y is the criterion itself, operating on the same structure from sensory perception to macroeconomics across all scales." Building upon these foundations, this article introduces the MFY framework into the market economic system, completing a systematic cross-validation in the field of economics. The major theoretical structures of microeconomics, macroeconomics, behavioral economics, and finance are unified within this framework as degraded forms of the same causal chain under specific conditions, without relying on domain-specific bridging assumptions. On this basis, this article proposes the expectation lock-in theory: the core sustaining mechanism of market failure is the mismatch and locking of collective expectations, with information asymmetry serving merely as one of the triggering conditions—Akerlof's market for lemons becomes a special-case scenario within this framework. Once expectations are locked in, they persist independently of the triggering conditions and corrective measures, and even independently of their own consequences. Expectation lock-in is trust lock-in; breaking the lock-in is trust reversal: when trust accumulates in one direction to a threshold, lock-in forms; when trust accumulates in the opposite direction to a threshold, lock-in reverses. The cost of reversal is determined by the direction of movement: negative signals inherently possess higher trust matching; trust moves faster in the negative direction and slower in the positive direction; positive trust is built slowly and destroyed relatively easily, while negative trust is established rapidly and is difficult to dismantle. Once trust reverses and falls below the initial baseline, rebuilding is harder than building from scratch. Breaking positive and neutral lock-ins necessarily involves trust rupture; the rupture is unavoidable but can be transferred across different trust accounts. This article derives the demand curve and supply curve endogenously from the heterogeneity of buyers' and sellers' expectations: the curves are the aggregated result of group expectation orderings. When expectations are stable, this derivation naturally degenerates into the standard form of Marshallian supply-demand equilibrium. Additionally, this article constructs a complete value continuum from positive infinity to negative infinity, providing rigorous determination procedures and decision logic for negative value.
Author: Yi, Baichen
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7161581968
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