Information and markets: toward a critical sociological appreciation of f.a. hayek

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

F.A. Hayek’s famous critique of the socialist planned economy turned on the role of information in markets. In competitive markets, decision-making is decentralized and relies on locally available market signals. Decision-makers do not have to be omniscient or predict the future; they simply have to focus on market prices. By contrast, socialist planners face a much more demanding situation where they have to acquire and process vast amounts of information in a centralized fashion. The author revisits Hayek’s early work in light of the contemporary revolution in information technology, using recent research on organizational decision-making. The author argues that a great deal of market information is produced by public and private institutions, and includes much more than market prices. The boundary between tacit knowledge and formalized knowledge changes as IT enables the spread of the latter. Furthermore, the growing “knowledge economy” underscores the importance of intellectual property, and the legal institutions that support it. Overall, some of Hayek’s early insights hold up well while others need updating.

Original languageEnglish (US)
Title of host publicationAdvances in Austrian Economics
PublisherEmerald Group Holdings Ltd.
Pages115-134
Number of pages20
DOIs
StatePublished - 2022

Publication series

NameAdvances in Austrian Economics
Volume26
ISSN (Print)1529-2134

Keywords

  • Bounded rationality
  • Classification
  • Hayek
  • Information
  • Intellectual property
  • Sociology

ASJC Scopus subject areas

  • Economics and Econometrics

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