Plan-Coordination: Who Needs it?

12 Pages Posted: 9 Feb 2015 Last revised: 19 Oct 2017

Peter Lewin

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics

Date Written: February 7, 2015

Abstract

In this paper I revisit the question of coordination – of plans by prices and other social institutions. Prices contain ambiguous information that requires interpretation. How are they, in spite of this, able to coordinate plans and actions. The answer given in this paper is that they are not – they do not. I suggest that a closer examination of plan-coordination indicates that some plans should not be coordinated, at least as regards their outcomes. Coordination applies to the ‘rules’, the institutions, and not to the outcomes that occur from following them. This follows from the obvious notion that there must be room for creativity. While this may seem like a trivial point, made many times, it is not clear, at least as concerns the role of prices, that it has been fully digested.

Keywords: plan-coordination, equilibrium, orders, institutional-evolution, prices, profits

JEL Classification: P41, B53, K10

Suggested Citation

Lewin, Peter, Plan-Coordination: Who Needs it? (February 7, 2015). Review of Austrian Economics, Vol. 29, No. 3, 2016. Available at SSRN: https://ssrn.com/abstract=2561943 or http://dx.doi.org/10.2139/ssrn.2561943

Peter Lewin (Contact Author)

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics ( email )

2601 North Floyd Road
P.O. Box 830688
Richardson, TX 75083
United States

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