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Economists Favour the Price System Who Else Does?

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  • BRUNO S. FREY

Abstract

Most people except professional academic economists resist or reject the use of the price system. The four main reasons are lack of information, undesirable distributional consequences, unfairness and reluctance to trade, and adverse effects on preferences. The reasons brought forward against the price system are only partly convincing, particularly in comparison to other decision‐making systems. The use of the price system may create more problems than traditional neoclassical economics admits. The difficulties and paradoxes connected with the use of the price system provide a challenge to existing economic theory. Es werden mehrere Gründe (über die üblichen Argumente des Marktversagens hinausgehend) dargelegt, warum viele Leute das Preissystem ignorieren oder gar ablehnen, ausser sie seien akademisch tätige Ökonomen. Die vier wichtigsten Gründe sind fehlende Information, unerwünschte Verteilungswirkungen, fehlende Fairness und Widerwillen gegen Tausch sowie unerwiinschte Auswirkungen auf die Präfe‐renzen. Dabei sind die Argumente, die gegen das Preissystem angeführt werden, nur zum Teil überzeugend, vor allem dann, wenn dieses mit anderen Entscheidungs‐systemen verglichen wird. Der Gebrauch des Preissystems kann mehr Probleme aufwerfen, als es die traditionelle neoklassische Lehre wahrhaben will. Die Schwierig‐keiten und Paradoxien, die die Anwendung des Preissystems mit sich bringt, stellen eine Herausforderung an die gängige ökonomische Theorie dar. La plupart des gens, sauf les économistes professionnels «orthodoxes», sont réticents vis‐à‐vis du système de prix, voire le regrettent. Quatre raisons principales sont avancées: le manque d'information, les conséquences indésirables sur la distribution, la partialité et le manque de désir à commercer, ainsi que les effets pervers sur les préférences. Ces raisons ne sont que partiellement convaincantes, surtout quand on compare le système de prix aux autres méthodes de prise de décisions. L'emploi du système de prix peut créer plus de problèmes que ne l'admet la théorie économique néo‐classique traditionnelle. Les difficultés et les paradoxes liés à l'emploi de ce système constituent un défi à la théorie économique actuelle.

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  • Bruno S. Frey, 1986. "Economists Favour the Price System Who Else Does?," Kyklos, Wiley Blackwell, vol. 39(4), pages 537-563, November.
    • Handle: RePEc:bla:kyklos:v:39:y:1986:i:4:p:537-563
    DOI: 10.1111/j.1467-6435.1986.tb00677.x
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    1. Hamza Bennani, 2015. "Dissecting the brains of central bankers: The case of the ECB’s Governing Council members on reforms," International Economics, CEPII research center, issue 141, pages 97-114.
    2. Haucap, Justus & Heimeshoff, Ulrich, 2014. "The happiness of economists: Estimating the causal effect of studying economics on subjective well-being," International Review of Economics Education, Elsevier, vol. 17(C), pages 85-97.
    3. Giuseppe Munda, 2014. "On the Use of Shadow Prices for Sustainable Well-Being Measurement," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(2), pages 911-918, September.
    4. Kirchgassner, Gebhard, 2005. "(Why) are economists different?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 543-562, September.
    5. Paul Anand & Alastair Gray, 2009. "Obesity as Market Failure: Could a ‘Deliberative Economy’ Overcome the Problems of Paternalism?," Kyklos, Wiley Blackwell, vol. 62(2), pages 182-190, April.
    6. Amélie Goossens & Pierre-Guillaume Méon, 2010. "The impact of studying economics, and other disciplines, on the belief that voluntary exchange makes everyone better off," Working Papers CEB 10-012.RS, ULB -- Universite Libre de Bruxelles.
    7. Alfred Meier, 1988. "Wettbewerbsbeschränkungen in der schweizerischen Versicherungswirtschaft und ihre volkswirtschaftliche Beurteilung," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 124(III), pages 377-390, September.
    8. Michael Rauscher, 2006. "Voluntary Emission Reductions, Social Rewards, and Environmental Policy," CESifo Working Paper Series 1838, CESifo.
    9. Amélie Goossens & Pierre-Guillaume Méon, 2015. "The Belief that Market Transactions Are Mutually Beneficial: A Comparison of the Views of Students in Economics and Other Disciplines," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 46(2), pages 121-134, April.
    10. João Carlos Graça & João Carlos Lopes & Rita Gomes Correia, 2014. "Economics education: literacy or mind framing? Evidence from a survey on the social building of trust in Portugal," Working Papers Department of Economics 2014/20, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    11. Avner Offer, 2013. "Regard," Chapters, in: Luigino Bruni & Stefano Zamagni (ed.), Handbook on the Economics of Reciprocity and Social Enterprise, chapter 29, pages 285-294, Edward Elgar Publishing.
    12. Konstantinos Pouliakas, 2010. "Pay Enough, Don't Pay Too Much or Don't Pay at All? The Impact of Bonus Intensity on Job Satisfaction," Kyklos, Wiley Blackwell, vol. 63(4), pages 597-626, November.
    13. Avner Offer, 2008. "British Manual Workers: From Producers to Consumers, c. 1950–2000," Oxford University Economic and Social History Series _074, Economics Group, Nuffield College, University of Oxford.
    14. René L. Frey, 1987. "Wirtschaftswachstum und Umweltqualität: Auf der Suche nach einer neuen Wachstumspolitik," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 123(III), pages 289-315, September.
    15. Bruno S. Frey & Beat Gygi, 1988. "Die Fairness von Preisen," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 124(IV), pages 519-541, December.
    16. Rauscher, Michael, 1997. "Voluntary Emission Reductions, Social Rewards, and Environmental Policy," Thuenen-Series of Applied Economic Theory 10, University of Rostock, Institute of Economics.
    17. Avner Offer, 2008. "British Manual Workers: From Producers to Consumers, c. 1950-2000," Oxford Economic and Social History Working Papers _074, University of Oxford, Department of Economics.
    18. von Cramon-Taubadel, Stephan, 1992. "A critical assessment of the political preference function approach in agricultural economics," Agricultural Economics, Blackwell, vol. 7(3-4), pages 371-394, October.
    19. Jacob, Robert & Christandl, Fabian & Fetchenhauer, Detlef, 2011. "Economic experts or laypeople? How teachers and journalists judge trade and immigration policies," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 662-671.

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