Pavitra comments on Open Thread June 2010, Part 3 - Less Wrong
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It might be valuable to talk about a "true value" of a given good to a given agent. Yes, the correct price to buy or sell a good at is always the market price; but whether I want to sell at that price or buy at that price depends on how much I want the good. If I sell, then the "true value" of the good to me is less than the current market price; and if I buy, then the "true value" of the good to me is greater than the current market price. In general, the "true value" of a given good to a given agent is the price such that, if the market were trading at that price, that agent would be indifferent regarding whether to buy or sell that good.
Yes that is a coherent definition of true value. It's not a concept that maps well to price indices though.