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Economic coordination in environments with incomplete pricing

Author

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  • Paul Dragos Aligica

    (George Mason University)

  • Richard E. Wagner

    (George Mason University)

Abstract

Simple observation presents two stylized facts that call for integration into a single explanatory framework. One fact is that societies reflect generally though certainly not perfectly coordinated patterns of activity. The other fact is that only a subset of those activities is coordinated with the direct assistance of market prices. Price-theoretic explanations of how prices serve to secure economic coordination are thus incomplete because contemporary environments feature significant expanses of territory where market pricing has little presence. We refer in this respect to territory occupied both by non-profit enterprises and by political enterprises. In this paper we explore how societal coordination can occur when market pricing covers but a subset of the range of economic activities within a society. A key feature of our explanation is the network architecture of enterprises within a society.

Suggested Citation

  • Paul Dragos Aligica & Richard E. Wagner, 2020. "Economic coordination in environments with incomplete pricing," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(3), pages 315-329, September.
    • Handle: RePEc:kap:revaec:v:33:y:2020:i:3:d:10.1007_s11138-018-0427-2
    DOI: 10.1007/s11138-018-0427-2
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    References listed on IDEAS

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    1. Marta Podemska-Mikluch & Richard Wagner, 2013. "Dyads, triads, and the theory of exchange: Between liberty and coercion," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(2), pages 171-182, June.
    2. Grossman, Sanford J & Stiglitz, Joseph E, 1980. "On the Impossibility of Informationally Efficient Markets," American Economic Review, American Economic Association, vol. 70(3), pages 393-408, June.
    3. Meg Patrick & Richard Wagner, 2015. "From mixed economy to entangled political economy: a Paretian social-theoretic orientation," Public Choice, Springer, vol. 164(1), pages 103-116, July.
    4. Richard Wagner, 1998. "Social Democracy, Societal Tectonics, and Parasitical Pricing," Constitutional Political Economy, Springer, vol. 9(2), pages 105-111, June.
    5. Peter J. Boettke & Christopher J. Coyne, 2008. "The Political Economy of the Philanthropic Enterprise," Chapters, in: Gordon E. Shockley & Peter M. Frank & Roger R. Stough (ed.), Non-market Entrepreneurship, chapter 5, Edward Elgar Publishing.
    6. Richard E. Wagner, 2016. "Politics as a Peculiar Business," Books, Edward Elgar Publishing, number 16989.
    7. Grossman, Sanford J & Stiglitz, Joseph E, 1976. "Information and Competitive Price Systems," American Economic Review, American Economic Association, vol. 66(2), pages 246-253, May.
    8. Marta Podemska-Mikluch & Richard E. Wagner, 2017. "Economic Coordination across Divergent Institutional Frameworks: Dissolving a Theoretical Antinomy," Review of Political Economy, Taylor & Francis Journals, vol. 29(2), pages 249-266, April.
    9. Monica Auteri & Richard Wagner, 2007. "The Organizational Architecture of Nonprofit Governance: Economic Calculation Within an Ecology of Enterprises," Public Organization Review, Springer, vol. 7(1), pages 57-68, March.
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    Cited by:

    1. Mikayla Novak, 2024. "Coercive advantage," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 37(4), pages 457-476, December.

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    More about this item

    Keywords

    Coordination as state; Coordination as process; Price proxies; Network architecture; Sympathetic mind-reading;
    All these keywords.

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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