tag:blogger.com,1999:blog-16108705.post4897227890181038937..comments2023-10-31T04:22:01.788-07:00Comments on Spontaneous Order: Cheung's TheoremGary M C Shiuhttp://www.blogger.com/profile/10428343538502014336noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-16108705.post-40187657539952239862009-06-10T18:01:01.949-07:002009-06-10T18:01:01.949-07:00I disagree. The knowledge problem, the source of ...I disagree. The knowledge problem, the source of which is dispersed information among each and every individual, is not something that could be resolved WITHOUT the market. <br /><br />On the supply of information side, you need incentives like profit for the information holder to reveal what he or she knows. <br /><br />On the demand side, users of information can rely on the price signals which embody the knowledge revealed in the actions of participants whom the users do not and will know. How can they be so sure. Well, if the suppliers of info are motivated by profit/self-interests, they would have the icentives to reveal what they really know. <br /><br />Yes, of course you would come back with problems like information asymmetry, deliberation distortions of knowledge one knows in order to gain an upper hand in transactions. True, those things happen. <br /><br />But then we also know there are other mechanisms, created and maintained by competitive forces in the market to resolve those problems which arise in certain markets with perculiar characteristics. Reputation, signalling and other measures are means which can resolve those problems. <br /><br />I think some Mechanism Design theorists have written stuff on how one can design scheme to solicit truthful info from individuals, kind of a substitute for the market. But I am not too familiar with that literature. I doubt that would work.Gary M C Shiuhttps://www.blogger.com/profile/10428343538502014336noreply@blogger.comtag:blogger.com,1999:blog-16108705.post-12270710489337687072009-06-10T02:41:41.813-07:002009-06-10T02:41:41.813-07:00Even officials can resolve the knowledge problem, ...Even officials can resolve the knowledge problem, either by themselves or some measures (e.g. consumer council's 格價特工), I think the cost-effectiveness is in doubt.明https://www.blogger.com/profile/11036905455385061419noreply@blogger.com