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Lange and Hayek Revisited: Lessons from Czech Voucher Privatization

Author

Listed:
  • Jan Hanousek

    (CERGE-EI)

  • Randall K. Filer

    (Hunter College and The Graduate Center CUNY; CERGE-EI)

Abstract

A fundamental question in economics since the 1930s has been whether an administrative price system could simulate the results of perfect competition even without a true market for the means of production. The theoretical possibility of such a system has been known since the introduction of market socialism by Oskar Lange. We have used the artificial bidding market involved in the Czech voucher privatization process to test whether a sequential process of trial-and-error can set administrative prices close to equilibrium. It would appear from this natural experiment that Robbins and Hayek were correct in doubting the real-world feasibility of market socialism.

Suggested Citation

  • Jan Hanousek & Randall K. Filer, 2001. "Lange and Hayek Revisited: Lessons from Czech Voucher Privatization," Development and Comp Systems 0012005, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpdc:0012005
    Note: Type of Document - Acrobat PDF; pages: 12 ; figures: included
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    References listed on IDEAS

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    1. Egon Neuberger, 1973. "The Plan and the Market: The Models of Oskar Lange," The American Economist, Sage Publications, vol. 17(2), pages 148-153, October.
    2. Hingorani, Archana & Lehn, Kenneth & Makhija, Anil K., 1997. "Investor behavior in mass privatization: The case of the Czech voucher scheme," Journal of Financial Economics, Elsevier, vol. 44(3), pages 349-396, June.
    3. Jan Svejnar & Miroslav Singer, 1994. "Using vouchers to privatize an economy: the Czech and Slovak case," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(1), pages 43-69, March.
    4. Jan Hanousek & Eugene Kroch, 1998. "The two waves of voucher privatization in the Czech Republic: a model of learning in sequential bidding," Applied Economics, Taylor & Francis Journals, vol. 30(1), pages 133-143.
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    Cited by:

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    2. Tomas Jandik & Craig G. Rennie, 2008. "The Evolution of Corporate Governance and Firm Performance in Transition Economies: The Case of Sellier and Bellot in the Czech Republic," European Financial Management, European Financial Management Association, vol. 14(4), pages 747-791, September.

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    More about this item

    Keywords

    Bidding scheme; Oskar Lange’s model; Privatization; Price setting; Voucher scheme;
    All these keywords.

    JEL classification:

    • P00 - Political Economy and Comparative Economic Systems - - General - - - General
    • P22 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Prices

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