Prices and knowledge: A market-process perspective

144 IndexCercone, N. 79change: and central planning 100–2;and complexity 67, 106–7; coordinationof response to 101–2;entrepreneurial discovery of 105;and knowledge problem 7, 106–7;response to 72–3, 98, 100–2, 105;time aspects of 106–7; unexpected13, 95, 100–1; and updating data103choice: and omniscience 64; andsatisficing 70–1Coase, R.H. 109–10, 111Coddington, A. 43, 55cognition theory 4, 78–9, 118, 121command and control 97, 99–100,113–14; of informationtransmission 103competition: and central planningcompared 7, 36–7, 109–11, 114;concept of 65; as co-ordinatingprocess 22; as discovery procedure16–17, 83, 87, 95, 109; imperfect67; rivalrous 5, 44, 50, 65, 114,119complexity 4, 66–70, 99, 113; andcentral planning 83–8, 97; andchange 106–7; and governmentintervention 81; and ignorance104, 115; and knowledge problem76–80; and market-processconcept 83–8; and money 121–2;and price mechanism 72, 80–2;Simon’s theory of 118;simplification of 68–76, 116; andtime 99–100computers 86; and allocativeoptimization 74, 77; and boundedrationality 67, 68, 81contracts 107, 121co-ordination: of actions 88–9, 90–1;by entrepreneurs 58–9, 90, 91,114; and central planning 75,88–9; and decentralizeddecision-making 24, 103; anddisequilibrium 82, 83, 88; andequilibrium 9–10, 11; ofknowledge 88, 89–90, 91–2; andmarket-process concept 7, 73, 75,114, 122; meaning of 88–92; andNelson 107–8; and Paretooptimality 11; and response tochange 101–2costless information 35–6, 43, 53costly information 29, 32–3, 34,38–9, 53–4, 118Dasgupta, P. 41–2data: acquisition and handling 96;and central planning 85; changing98, 103; in disequilibrium 2, 3,15; in equilibrium 20; reduction of48decentralization: of bureaucracies andmarkets 112–15; of centrallyplanned organizations 116, 120;and co-ordination problems 24,103; of decision-making 103, 112;versus centralization 36decision-making 2, 110;centralized 54;decentralized 103, 112demand and supply: and effects ofchange 98; knowledge of 105Demsetz, H.: and standards ofefficiency 54, 58, 118; and welfareeconomics 25–7, 53discovery procedure 6, 23, 45,115–16; in centrally plannedsystems 54, 106–7; competitionas 16–17, 95, 109; indecentralized hierarchies 113;and ignorance 23, 104; andmarket system 105–6; see alsoentrepreneurial discoverydisequilibration 122disequilibrium: co-ordination in 82,83, 88; and equilibrium 37–40;modelling 11–12; order in 58,73–4, 119, 122disequilibrium analysis 2, 10–14, 27,102–3; by Austrian school 14–28;and Grossman and Stiglitz 39–40;and Hahn 10–11; andmathematical formalism 5, 22;and normative economics 24–8;and Simon 65; in theory ofmarkets 11–14