Expected Value: A Unified Framework from Positive Infinity to Negative Infinity and the Expectation Lock-in Theory of Market Steady State

Author Information Author: Baichen Yi Corresponding Author: Baichen Yi, E-mail: ybcbenxin@163.com Affiliation: Independent Researcher, Weiyang District, Xi'an, Shaanxi Province 710000, China ORCID: 0009-0008-6242-7743 Funding: None Conflict of Interest Statement: All authors declare no conflicts of interest related to this work. Preprint Statement: This is an unrefereed preprint and does not represent the final published academic consensus. All mechanistic explanations and cross-scenario applications presented herein are heuristic analogies and testable hypotheses, not confirmed scientific conclusions. Copyright License This preprint is distributed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0). Global sharing and redistribution are permitted provided that proper attribution is given, the use is non-commercial, and no derivative works are created. Special Authorization Statement: The author specifically authorizes any individual or institution to translate the full text or portions of this article into other languages, provided that the translated version maintains the core logic of the original and clearly indicates the original source and author information. The full license text is available at: https://creativecommons.org/licenses/by-nc-nd/4.0/ Abstract This paper is the eighth in the series of studies on the original MFY (Anchor M - Direction F - Expectation Y) three-variable steady-state meta-model 9. Originally derived independently from extreme psychological cases 9, this model is theoretically positioned as a general steady-state regulation framework for emergent states in all open complex systems with agency. This paper systematically migrates this framework to market economic systems with tens of millions of participants and institutional nesting, independently constructs the Expectation Lock-in Theory, and completes systematic demonstration through multi-scenario cases. The economic issues addressed in this paper—the origin of value, supply-demand equilibrium, and market failure—are repositioned here as specific mappings of "emergent states with agency participation" in a particular system type, rather than conventional theoretical extensions within traditional economics. Through cross-scale cases including GameStop, Turkish Lira, Chinese and Japanese real estate, and gym annual membership models, this paper analyzes multiple expectation dynamics paths such as expectation lock-in, expectation breakdown, and expectation stratification coupling—explaining not only how systems fail due to expectation collapse but also how expectation heterogeneity emerges as sustainable steady states. This paper gradually derives the demand curve and supply curve from the expectation heterogeneity between buyers and sellers, proving that the traditional supply-demand equilibrium model is compatible and convergent with the core conclusions of this framework under conditions of stable expectations. It provides an endogenous generative explanation for the shape of supply and demand curves based on expectation heterogeneity, filling the analytical gap in traditional theory where preference heterogeneity is treated as exogenously given. This paper further proposes that the core driver of market failure is the mismatch and lock-in of group-shared expectations. Information asymmetry is one of the important triggering factors for expectation lock-in, but once expectations are locked, market failure may persist even after information asymmetry is eliminated. It reveals the micro-mechanism of expectation lock-in by treating consensus as a public good, and proposes three types of unlocking paths: endogenous, technical, and institutional. This paper connects micro-decisions and macro-market steady states through a unified causal chain: Anchor M → Expectation Y → Value Judgment → Price Range → Market Equilibrium/Failure, bridging the micro-macro divide in traditional economics. Under conditions of stable expectations, this framework is compatible and convergent with the core conclusions of mainstream theories including Marshallian supply-demand equilibrium, Akerlof's lemon market, Friedman's permanent income hypothesis, and classical game theory. It simultaneously provides a unified underlying expectation dynamics explanation for financial practical wisdom such as Soros' reflexivity, Buffett's value investing, Marks' pendulum theory, Taleb's black swan, and Dalio's debt cycle. This paper provides an operational underlying analytical framework for investors to identify bubbles and crashes, regulators to judge intervention timing, and business managers to assess brand crises. All core mechanisms have been validated across multiple scenarios in the author's previous research.