Hayek, F A (1945), "The use of knowledge in society", The American Economic Review, 35(4): 519-530  Home/Search   Document Not in Database   Summary   Related Articles   Check

.... the economists viewed entrepreneurs as detectors of business opportunities (Higgins, 1959; Penrose, 1959; Kirzner, 1976) creators of enterprises (Ely and Hess, 1893; Oxenfeldt, 1943; Schloss, 1968) and risk takers (Leibenstein, 1968; Kihlstrom and Laffont, 1979; Buchanan and Di Pierro, 1980) Hayek (1937; 1959) showed that the role of entrepreneurs was to inform the market of new elements. Knight (1921) showed that entrepreneurs assumed a risk because of the state of uncertainty in which they worked, and that they were rewarded accordingly by the profits they made from the activities they initiated. ....

Hayek, F.A, von (1959), "The Use of Knowledge in Society", American Economic Review (1945), 35, p. 519-530. Also in: Individualism and Economic Order (1959), London,: Routledge and Kegan Paul; Chicago: University of Chicago Press (1948), 1957). See also: "The Meaning of Competition", 1949, in Individualism and Economic Order, 1959: p. 92-106.

....as a habit or a convention. It is not rational indeed to drive on the right against the tra#c rule but the reason that we usually drive on the left is that such an action is already imprinted on our unconscious. The argument of tacit knowledge (knowing) of Polanyi (1962, 1966) or Hayek (1945) closely related to the essential conception of knowledge in this article. In the next section, we discuss the problem of the relationship between the social institutions and the cognitive framework of individuals in terms of agent simulation. There, it makes clear that the assumption of ....

Hayek, F. A. (1945). The use of knowledge in society, American Economic Review, 35, 519-29.

....for such an agent is high. Delegating decision rights to these individuals provides them with incentives to reveal their ideas. 9 An important idea in the theory of the firm is that decision rights and information useful for making decisions should be linked. This view is often attributed to Hayek (1945). Also, see Jensen and Meckling (1992) Optionality, Decentralization, and Hierarchical Budgeting 6 There is a vast related literature on decentralization. We mention only a few examples. March and Simon (1958) develop a connection between bounded rationality and decentralization. In Radner ....

Hayek, R., 1945, The use of knowledge in society, American Economic Review 35, 1-18.

....of the efficiency properties of traditional rate of return regulation. 5 production, the potential for innovation, and so forth. The economic problem of society is a problem of the utilization of knowledge and it is only through the process of competition that the facts will be discovered (Hayek, 1945, p. 321; 1949, p. 96) Thus competition has its main role as a discovery process in which decentralized economic actors utilize their local information and create relevant information for other actors in the economy. As Kirzner (1992) has pointed out, market prices communicate information that ....

Hayek, Friedrich A. (1945). "The use of knowledge in society," American Economic Review 35, pp. 519-530.

....future can be discerned, or a superior production technique discovered, by simply investing in more information 10 . An alternative is to embrace the assumptions of Austrian and evolutionary economic theory and assume that the future is, to a greater or lesser degree, uncertain and unknowable (Hayek, 1945; Nelson Winter, 1982) Thus, no amount of expenditure on information gathering will resolve what Knight (1921) calls fundamental uncertainty . Firms are only relatively efficient (or inefficient) in reference to other firms. Firms adapt 22 but they do not optimize (or, more correctly, they ....

....Moreover, coordination is difficult. Resources cannot be assumed to be in their value maximizing use at any given point in time. The continuous stream of new developments and innovations emerging into the public domain further complicates the problem of finding appropriate resource combinations (Hayek, 1945; Nelson Winter, 1982; Schumpeter, 1934; Teece, 1986; Witt, 1998) The problems of coordination ensure that opportunities for gain will always exist. Behavioral Assumptions We assume that firms are not formed with the intention of creating social welfare (or public efficiency) Specialists ....

Hayek, F. A. 1945. The use of knowledge in society. American Economic Review, 35: 519-530.

....makers are mutually compatible, that is everyone s plans (which are 17 . economic problems arise always and only in consequence of change. As long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a new plan (Hayek, 1945: 82) 26 based on their expectations) can be implemented. 18 If expectations (of the same relevant events) vary across individuals, then, at most, one of them can turn out to be correct (Lachmann, 1977) and some plans must fail (in whole or in part) If expectations vary some are bound to be ....

Hayek, F.A. (1945) The Use of Knowledge in Society, American Economic Review, 35: 519-530.

....to do it at price above some specified cost, and arbitrageurs have similar constraints, then, under the appropriate institutional arrangements, transactions converge toward the price at the intersection of the frontiers of the reservation prices and marginal costs, known as demand and supply. Hayek (1945) and North (1990) point to this critical informational and problem solving role of market institutions in society. This can happen even in complex environments with many intermediate markets, with arbitrageurs entitled to hold short and long inventory positions and allowed not to honor their ....

Hayek, Friederich A. (1945) "The Uses of Knowledge in Society," The American Economic Review, 35 (September): 519-30.

....version: December, 1998. It is, perhaps, worth stressing that economic problems arise always and only in consequence of change. As long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a new plan. F.A. Hayek (1948) 1 Introduction Since November 1, 1996 shopping hours in Germany are deregulated, at least partly. Stores are allowed to open a bit earlier in the morning and to keep open for a longer time period the evening. Yet, shopping hours are far from being liberalized, since in general the policy to ....

Hayek, F.A. (1948) "The Use of Knowledge in Society", Individualism and Economic Order, University of Chicago Press, Chicago & London.

....two related costs. One is the cost of deciding from whom to buy, while the other cost is the uncertainty that the information correctly reflects a situation in which the buyer can help the system receive maximum reward. The costs mentioned above can be discussed from the point of view of knowledge (Hayek, 1945). Before the manufacturer and the worker meet, they both have something to sell. However, neither the manufacturer nor the worker knows to whom to sell. After meeting, they still lack the knowledge of each other s respective prices. The manufacturer wants to pay as little in wages as possible, ....

Hayek, F. A. (1945). The use of knowledge in society. The American Economic Review, 35(4), 519--530.

....individuals are bounded not so much by the total amount of information processing they can handle, as by the amount they can perform in a given amount of time. Furthermore, the problem when making decisions is not simply to use a lot of information, but also to use recent information. As stated by Hayek (1945): We need decentralization because only thus can we ensure that the knowledge of the particular circumstances : be promptly used. To account properly for the time that information processing takes, a sequential model of computation is needed. 1 For example, Arrow and Hurwicz (1960) Hurwicz ....

Hayek, F. A. v. (1945). The use of knowledge in society. American Economic Review, 35, 519--530.

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Hayek, F A (1945), "The use of knowledge in society", The American Economic Review, 35(4): 519-530

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Hayek, F. A. (1945). "The Use of Knowledge in Society." American Economic Review, 35(4), 519--530.

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Hayek, F A. (1945). The uses of knowledge in society. American Economic Review, 35, 519--530.

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Hayek, Friedrich A.. (1945). The Uses of Knowledge in Society. American Economic Review, 35(4), 519-30.

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F.H. Hayek, 1945, The use of knowledge in society, American Economic Review 35, 519530.

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Hayek, F.A. "The Use of Knowledge in Society." American Economic Review 35, no. 4 (1945): 519-30.

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Hayek, F. (1945): "The Use of Knowledge in Society," American Economic Review, XXXV, No. 4, 519-30.

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Hayek, Friedrich A. (#945). "The Use of Knowledge in Society," American Economic Review 35, 5#9-30.

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F.A. Hayek, `The Use of Knowledge in Society', The American Economic Review, 35(4), 1945, pp. 519--530.

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Hayek, Friedrich A.. (1945). The Uses of Knowledge in Society. American Economic Review, 35(4), 519-30.

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Hayek, Friedrich A. (1945). The uses of knowledge in society. American Economic Review, 35(4), 519-530.

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Hayek, F. (1945). "The Use of Knowledge in Society," American Economic Review 35: 519-30.

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Hayek, Friederich A. 1945. The Uses of Knowledge in Society, The American Economic Review, 35 (September): 519-30.

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Hayek, F. "The Use of Knowledge in Society" American Economic Review. 35(4). September 1945.

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Hayek, F.A. (1945) "The Use of Knowledge in Society" American Economic Review 35-4 519--530.

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