The efficiency of the price system: evidence from an alternative market

Authors
Chou, NT Degennaro, RP Sauer, RD
Citation
Nt. Chou et al., The efficiency of the price system: evidence from an alternative market, APPL ECON L, 7(11), 2000, pp. 703-706
Citations number
10
Categorie Soggetti
Economics
Journal title
APPLIED ECONOMICS LETTERS
ISSN journal
13504851 → ACNP
Volume
7
Issue
11
Year of publication
2000
Pages
703 - 706
Database
ISI
SICI code
1350-4851(200011)7:11<703:TEOTPS>2.0.ZU;2-D
Abstract
Most economists take it for granted that a price mechanism is usually the m ost effective means of resource allocation. This paper compares two methods of allocating resources in the thoroughbred racing market: a price mechani sm and bureaucratic restrictions. It is shown that a simple price mechanism does a superior job of allocating racing ability than a myriad of conditio ns and restrictions set by even a highly informed expert.