Economic Coordination in Environments with Incomplete Pricing

30 Pages Posted: 5 Nov 2015

See all articles by Paul Dragos Aligica

Paul Dragos Aligica

George Mason University - Mercatus Center

Richard E. Wagner

George Mason University - Department of Economics; George Mason University - Mercatus Center

Date Written: November 4, 2015

Abstract

Simple observation presents two stylized facts that call for integration into a single explanatory framework. One fact is that societies reflect generally though certainly not perfectly coordinated patterns of activity. The other fact is that only a subset of those activities is coordinated with the direct assistance of market prices. Price-theoretic explanations of how prices serve to secure economic coordination are incomplete because contemporary environments feature large expanses of territory where market pricing has little presence. We refer in this respect to territory occupied both by nonprofit enterprises and by political enterprises. In this paper we explore how societal coordination can occur when market pricing covers but a subset of the range of economic activities within a society. A key feature of our explanation is the network architecture of enterprises within a society.

Keywords: coordination as state; coordination as process; price proxies; network architecture; sympathetic mind-reading

JEL Classification: B25, D01, D23, D83

Suggested Citation

Aligica, Paul Dragos and Wagner, Richard E., Economic Coordination in Environments with Incomplete Pricing (November 4, 2015). GMU Working Paper in Economics No. 15-49, Available at SSRN: https://ssrn.com/abstract=2686387 or http://dx.doi.org/10.2139/ssrn.2686387

Paul Dragos Aligica

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
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United States

Richard E. Wagner (Contact Author)

George Mason University - Department of Economics ( email )

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(703) 993-1132 (Phone)

HOME PAGE: http://mason.gmu.edu/~rwagner/

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

HOME PAGE: http://ppe.mercatus.org/scholars/richard-wagner

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