Models of Equilibrium Pricing with Internalized Powers of Independent Judgment Based on Autonomy
In this paper I want to describe one way of thinking about information. In effect, this paper relates to the notion that organizational or societal models of economic equilibrium incorporate a decision-making mechanism that is influenced by the independent judgment of each individual. This decision-making mechanism has nothing to do with the notion of acting to maximize one's expected utility under a set of exogenous prices or predictions, nor are the consequences of the decisions based on this mechanism related in any way to exogenous prices, predictions, or other parameters. In terms of information theory, the goal is to generate information and make more accurate predictions about a particular condition. However, the information itself can be fundamentally flawed. Another point is that information generated for this purpose has the feature of being irreversible. If communication is defined as a process of engaging in an economic activity while observing and analyzing information generated on the basis of the above mechanism, then it is worth considering whether communication so defined has any utility from an economic standpoint. To pursue this question, I will apply the concept postulated above to theories of economic organization and pricing, and also discuss the externality which information brings into an economy.
|Date of creation:||Feb 2000|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Sah, R.K., 1991.
"Fallibility In Human Organizations And Political Systems,"
625, Yale - Economic Growth Center.
- Raaj Kumar Sah, 1991. "Fallibility in Human Organizations and Political Systems," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 67-88, Spring.
- Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010.
"A theory of Fads, Fashion, Custom and cultural change as informational Cascades,"
Levine's Working Paper Archive
1193, David K. Levine.
- Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1986.
"The Architecture of Economic Systems: Hierarchies and Polyarchies,"
American Economic Review,
American Economic Association, vol. 76(4), pages 716-727, September.
- Raaj Kumar Sah & Joseph E. Stiglitz, 1984. "The Architecture of Economic Systems: Hierarchies and Polyarchies," NBER Working Papers 1334, National Bureau of Economic Research, Inc.
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1988. "Committees, Hierarchies and Polyarchies," Economic Journal, Royal Economic Society, vol. 98(391), pages 451-470, June.
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1985. "Human Fallibility and Economic Organization," American Economic Review, American Economic Association, vol. 75(2), pages 292-297, May.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:12649. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.