IDEAS home Printed from
   My bibliography  Save this paper

Markets and the Use of Knowledge---Testing the "Hayek Hypothesis" in Experimental Stock Markets


  • Klaus Beckmann

    (Universitaet Passau)

  • Martin Werding

    (Universitaet Passau)


A broad strand in experimental economics has been devoted to testing the "Hayek hypothesis", which is commonly understood as the proposition that competitive markets conform to basic efficiency postulates. The precise content of this hypothesis, however, often remains fairly vague. We begin by restating the "Hayek hypothesis" in the light of theoretical work, which leads us to identifying three central elements of the hypothesis. Building on this restatement, we review the literature on experimental (market) economics and show how this literature has progressed from testing the first element of the "Hayek hypothesis" to testing all three elements simultaneously. Very recently, a number of scholars have moved these tests out of the laboratory, establishing political stock markets as a new type of field experiment. These political stock markets can be viewed as the toughest tests the "Hayek hypothesis" has been subjected to so far, and they have tended to support it. In the final section of the present paper, we outline some design features of the "Passauer Wahlboerse", an ongoing political stock market experiment being run at the Universitaet Passau, and indicate a few differences between this experiment and previous work.

Suggested Citation

  • Klaus Beckmann & Martin Werding, 1994. "Markets and the Use of Knowledge---Testing the "Hayek Hypothesis" in Experimental Stock Markets," Experimental 9405001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpex:9405001
    Note: 66 pages, Word for Windows file

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no


    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Kate Zernike, The Road to Serfdom, and Spit-Take Stupid “News”
      by Greg Ransom in Taking Hayek Seriously on 2010-10-04 09:47:35
    2. influence: Barack Obama is the #1 Hayekian in the World
      by Greg Ransom in Taking Hayek Seriously on 2009-03-02 10:46:13

    More about this item

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpex:9405001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: EconWPA (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.