The growth of information economics has lead to a substantial re-consideration of the role of prices. Instead of the conventional neo-classical view of prices as straightforward indicators of scarcity, information economics emphasises that prices can be sources from which agents infer information and means by which they communicate. Prices and Knowledge analyses different theoretical approaches to the role of prices in situations of imperfect information. It shows that whilst the `informational efficiency' approach of Grossman and Stiglitz and the `bounded rationality theory' of Nelson and Simon are useful, neither goes far enough in considering situations of disequilibrium.

chapter Chapter 1|7 pages


chapter Chapter 2|21 pages

A theory of the market process

chapter Chapter 3|34 pages

Equilibrium prices and information

chapter Chapter 5|22 pages

Change, responsiveness and Co-ordination

chapter Chapter 6|6 pages