Abstract
I argue that Friedrich von Hayek anticipated some major results in the theory of mechanism design.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
In this choice of prices, we are following Arrow and Debreu (1954), but this is not the only possible choice.
It is required that there exist a feasible outcome, not that all outcomes be feasible. Implicitly, the idea behind this weaker requirement is that, if the mechanism yields an infeasible outcome, signals and messages will adjust until feasibility is attained.
Actually, it is only r-1, because from the equation ∑p j x i j = 0, we can deduce x i r from x i 1, …, x i r − 1.
Again, the actual dimension is only r-1 because prices can be normalized to sum to 1, and so, once we know
p 1, …, p r − 1 we can infer p r from \( {\displaystyle \sum_{j=1}^r{p}_j=1.} \)
References
Arrow, K. (2007). Leonid Hurwicz: An appreciation. Unpublished.
Arrow, K., & Debreu, G. (1954). Existence of equilibrium for a competitive economy. Econometrica, 22, 265–290.
Clarke, E. (1971). Multipart pricing of public goods. Public Choice, 11, 17–33.
Groves, T. (1973). Incentives in teams. Econometrica, 41(4), 617–631.
Hammond, P. (1979). Straightforward individual incentive compatibility in large economies. Review of Economic Studies, 46(2), 263–282.
Hayek, F. (1945). The use of knowledge in society. American Economic Review, 35(4), 519–530.
Hayek, F. (1960). The constitution of liberty. London: Routledge & Kegan Paul.
Hayek, F. (1978). New studies in philosophy, politics, economics, and the history of ideas. London: Routledge & Kegan Paul.
Jordan, J. (1982). The competitive allocation process is informationally efficient uniquely. Journal of Economic Theory, 28(1), 1–18.
Lange, O. (1942). Economics of socialism. Journal of Political Economy, 50(2), 299–303.
Lerner, A. (1944). The economic of control: Principles of welfare economics. New York: Macmillan.
Mises, L. (1933). Planned economy and socialism. reprinted in Richard M. Ebeling ed. Selected Writings of Ludwig von Mises, The Liberty Fund, 2002.
Mount, K., & Reiter, S. (1974). The informational size of message spaces. Journal of Economic Theory, 8(2), 161–192.
Samuelson, P. (1954). The pure theory of public expenditure. Rev Econ Stat, 36(4), 387–389.
Vickrey, W. (1961). Counterspeculation, auctions, and competitive sealed tenders. J Financ, 16(1), 8–37.
Acknowledgments
Research support from the Rilin Enterprises Fund at Harvard University is gratefully acknowledged.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Maskin, E.S. Friedrich von Hayek and mechanism design. Rev Austrian Econ 28, 247–252 (2015). https://doi.org/10.1007/s11138-015-0310-3
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11138-015-0310-3