Prices and knowledge: A market-process perspective

Index 14789–91; and the entrepreneur17–18, 48, 52, 76–8, 86; onignorance 23, 24; and incentives19, 47; and the market-processapproach 6, 14, 105, 110; and theRobbinsian maximizer 12–13; onthe role of prices 44–5, 82, 83,117Klein, B. 24Knight, F.H. 106knowledge: and allocation ofresources 15–16; as commodity23, 32, 32–3, 45–6; co-ordinationof 88, 89–90, 91–2; of demandand supply 105; andentrepreneurial discovery 23, 104,105; inferred from prices 6, 41–3,118; initial 23; limited 6; new 27,46, 105, 111, 119; optimal 20;origin of 23; perfect 15, 20, 53; asscarce good 4–5; tacit 24; see alsoinformationknowledge problem: and Austrianschool 83–8; and centralplanning 83–6, 105; and change7, 106–7; and complexity 76–80;and economic systems 7, 105–6;and government planning 110–11; Hayek on 15–16, 25; andinformation processing 118;Lavoie on 3, 24, 86–8, 100;Mises on 14–15, 20, 21–2;Nelson on 7, 103–7; and profitopportunities 10; Simon on 3–4,7knowledge surrogates, prices as 6, 41,43–5, 118, 121Koopmans, T.C. 47–8Kreps, D.M. 29, 42Lange-Lerner-Taylor-Hayek debate36–7, 83, 99–100, 109Lange, O. 36–7, 107; his informationflow scheme 99–100; and plannedregime 104–5; see also Lange-Lerner-Taylor-Hayek debateLavoie, D.: and incentives 19; and theknowledge problem 3, 24 86–8,100; and unquestioned prices 56learning functions 13Leibenstein, H. 20Lerner, A.P. 36, 37; see also Lange-Lerner-Taylor-Hayek debateLittlechild, S.C. 103Loasby, B.J. 48, 64, 81losses 107, 114McGalla, G. 79Machlup, F. 22–3McNulty, P.J. 65market clearing 42, 82market failures 26, 101market organizations: versusbureaucracies 112–15; versus nonmarketorganizations 109–11market prices see disequilibriumpricesmarket simulation 99market system: and allocation ofresources 73; arguments for96–9; and bounded rationality80–3, 84; and complexity 83–8;and co-ordination 7, 73, 75,88–93, 114, 122; and discoveryprocedure 105–6;entrepreneurship in 83, 86–8,114; and hierarchies 72–6, 96,112–15, 120; and informationprocessing 73–4; and knowledgeproblem 116; and normativetheory 96; and profitopportunities 27; and Simon72–6; and welfare economics96–100market-process concept 3, 8–28; ofmodern Austrian school 14–28;Nelson on 102–115; andorganizations 7, 108–15; Simonon 80–3Marshallian models 41, 42mathematical formalism, in economicanalysis 5, 18, 22, 40, 102–3Mises, L. von 6, 99, 117; andcomputers 86; on theentrepreneurial process 18, 49–50,58–9; and knowledge problem14–15, 83–6; on the marketprocessconcept 14–15, 20, 21–2