Value & Capital, CHAPTER X, Section 3

This section discusses several possible causes of disequilibrium in a dynamic economic system.  One of them comes about when individuals differ in their expectations of prices. But the text argues that unless the expectations are "very definite" there are unlikely to be serious effects (in fact, the text calls this "perhaps the least important" cause of disequilibrium).

A second possibility arises when individuals' plans are inconsistent (even though their price expectations might be consistent).  In particular, when planned supply for some commodity (meaning the total quantity that all sellers plan to sell) is greater than planned demand (the total that all buyers plan to buy), the new price must be lower than it had been expected to be.  The text says this case "is evidently a potent cause of disequilibrium; it is perhaps the most interesting cause of all." 

A third possible cause is incorrect foresight by individuals as to their future preferences, or their estimates of the outputs of production processes.  When these preferences or production outputs are realized, some individuals "will find themselves unwilling or unable to buy or sell those quantities of goods they had planned to buy or sell."  As in the previous case, the new prices will be different from those that had been expected.  Further, as the text notes, "the imperfect foresight of some persons will put others too into disequilibrium."

The text argues that these three possible causes are the only ones that could arise when price expectations are definite.  A fourth possibility arises from the fact that, in real life, price expectations are uncertain.  The discussion notes that the effect from this possibility is not disequilibrium in the sense of instability, but disequilibrium in the sense of being an "imperfect equilibrium."  The explanation goes as follows:

when risk is present, people will generally act, not upon the price which they expect as most probable, but as if that price had been shifted a little in a direction unfavourable to them.  Now this means that even if no disequilibrium in any of the above senses is present ... still the most perfect adjustment of resources to wants may not be reached. ... [T]heir sense of risk may have prevented entrepreneurs from producing those quantities of output, which they would have produced if they had been more confident that their anticipations were right.  In this way, the efficiency of the system may be very seriously damaged, without any of the types of disequilibrium mentioned above coming into question.

The discussion notes next that this lack of confidence is a possible, though not a necessary, source of waste.  "Putting insufficient faith in good judgments is a source of inefficiency; but skepticism about bad judgments may be better than implicit trust."  The section then closes with the intriguing comment that "we shall find as we go on that there are reasons for suspecting that the economic system loses more by mistrust than by over-confidence."