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Discovery processes, science, and ‘knowledge–how:’ Competition as a discovery procedure in the laboratory

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  • Vernon Smith

Abstract

These edited remarks explore the relationship of the thought of F.A. Hayek to the development of experimental economics and related programs in economic design. Particularly emphasized are the insights of Hayek with respect to competition and their importance to the theoretical justification for, and empirical results derived from, the experimental study of market behavior. These remarks include some personal commentary on experimental methods, from the early double auctions of the 1960s through more recent work exploring the nature of business cycles. Finally, the intellectual history of the market structures examined in Vernon Smith’s work is discussed, comparing the exploration of the double auction to the horse market of Bohm-Bawerk, as well as the general insight of Adam Smith that causality stems from the propensity to truck, barter, and exchange to the discovery of specialization. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Vernon Smith, 2015. "Discovery processes, science, and ‘knowledge–how:’ Competition as a discovery procedure in the laboratory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(3), pages 237-245, September.
    • Handle: RePEc:kap:revaec:v:28:y:2015:i:3:p:237-245
    DOI: 10.1007/s11138-015-0309-9
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    References listed on IDEAS

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    1. repec:cto:journl:v:21:y:2002:i:3:p:515-544 is not listed on IDEAS
    2. Stanley Reiter, 1978. "A Dynamic Process of Exchange," Discussion Papers 347, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    3. Gjerstad,Steven D. & Smith,Vernon L., 2014. "Rethinking Housing Bubbles," Cambridge Books, Cambridge University Press, number 9780521198097, October.
    4. Smith, Vernon L. & Wilson, Bart J., 2014. "Fair and Impartial Spectators in Experimental Economic Behavior," Review of Behavioral Economics, now publishers, vol. 1(1-2), pages 1-26, January.
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    More about this item

    Keywords

    Vernon Smith; F. A. Hayek; Experimental economics; Business cycles; History of thought; Nobel prize; A14; B21; B25; B53; D47; G21;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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