The Efficiency of the Price System: Evidence from an Alternative Market

10 Pages Posted: 8 Apr 2003

See all articles by Nan-Ting Chou

Nan-Ting Chou

University of Louisville - College of Business - Department of Economics

Ramon P. DeGennaro

University of Tennessee, Knoxville - Department of Finance

Raymond D. Sauer

Clemson University - John E. Walker Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Abstract

Most economists take it for granted that a price mechanism is usually the most effective means of resource allocation. This paper compares two methods of allocating resources in the thoroughbred racing market: a price mechanism and bureaucratic restrictions. It is shown that a simple price mechanism does a superior job of allocating racing ability than a myriad of conditions and restrictions set by even a highly informed expert.

Keywords: Resource allocation, racing, thoroughbred

JEL Classification: A1, D4, G0, L8, P0, P5

Suggested Citation

Chou, Nan-Ting and DeGennaro, Ramon P. and Sauer, Raymond D. oSkipo, The Efficiency of the Price System: Evidence from an Alternative Market. Available at SSRN: https://ssrn.com/abstract=371760 or http://dx.doi.org/10.2139/ssrn.371760

Nan-Ting Chou

University of Louisville - College of Business - Department of Economics ( email )

Louisville, KY 40292
United States

Ramon P. DeGennaro (Contact Author)

University of Tennessee, Knoxville - Department of Finance ( email )

423 Stokely Management Center
Knoxville, TN 37996
United States
865-974-1726 (Phone)
865-974-1716 (Fax)

Raymond D. oSkipo Sauer

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States
864-656-3939 (Phone)
864-656-4192 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
165
Abstract Views
2,319
rank
182,105
PlumX Metrics