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| Title: | | Competition as an ambiguous discovery procedure: A reappraisal of Hayek's epistemic market liberalism  |
| Authors: | | Witt, Ulrich |
| Issue Date: | | 2011 |
| Series/Report no.: | | Papers on economics and evolution 1106 |
| Abstract: | | Epistemic arguments play a significant role in Hayek's defense of market liberalism. His claim that market competition is a discovery procedure that serves the common good is a case in point. The hypothesis of the markets' efficient use of existing knowledge is supplemented by the idea that markets are also most effectively creating new knowledge. However, in his assessment Hayek neglects the role of new technological knowledge. He ignores that the discovery procedure induces not only price and cost competition but also competition by innovations. Thence he overlooks the ambiguity that follows from the unpredictability of the consequences of innovations. This fact is shown to challenge the epistemic foundations and the stringency of Hayek's version of market liberalism. |
| Subjects: | | competition innovation liberalism knowledge self-organization Hayek |
| JEL: | | B25 D80 O33 P16 Q55 |
| Persistent Identifier of the first edition: | | urn:nbn:de:gbv:27-20110630-115310-2 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Papers on Economics and Evolution, MPI für Ökonomik
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