  This paper introduces and formalizes the classical view on supply and demand,
which, we argue, has an integrity independent and distinct from the
neoclassical theory. Demand and supply, before the marginal revolution, are
defined not by an unobservable criterion such as a utility function, but by an
observable monetary variable, the reservation price: the buyer's (maximum)
willingness to pay (WTP) value (a potential price) and the seller's (minimum)
willingness to accept (WTA) value (a potential price) at the marketplace.
Market demand and supply are the cumulative distribution of the buyers' and
sellers' reservation prices, respectively. This WTP-WTA classical view of
supply and demand formed the means whereby market participants were motivated
in experimental economics although experimentalists (trained in neoclassical
economics) were not cognizant of their link to the past. On this foundation was
erected a vast literature on the rules of trading for a host of institutions,
modern and ancient. This paper documents textually this reappraisal of
classical economics and then formalizes it mathematically. A follow-up paper
will articulate a theory of market price formation rooted in this classical
view on supply and demand and in experimental findings on market behavior.
