The market process of capitalization: a laboratory experiment on the effectiveness of private information

Journal of Evolutionary Economics - Tập 28 - Trang 951-960 - 2017
Eduard Braun1, Wiebke Roß1
1Institute of Management and Economics, Clausthal University of Technology, Clausthal-Zellerfeld, Germany

Tóm tắt

The notion of present value is an integral part of economics. So far, however, its rationale rests upon the well-known neoclassical assumptions of complete information and perfect rationality. The present value derives as the result of a calculation that requires the knowledge of the discount rate and the future returns of the evaluated assets. This paper presents a laboratory experiment that demonstrates that the present value of assets can also be discovered by participants of a production process endowed with incomplete information. The knowledge concerning future returns is not given to any one, but dispersed among the participants who, in addition, have no idea of their position in the production chain. In accordance with Hayek’s theory of the market process as a discovery procedure, the present value is found without any one subject being able to determine it individually.

Tài liệu tham khảo

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