Lange and Hayek Revisited: Lessons from Czech Voucher Privatization

Jan Hanousek () and Randall Filer ()

Development and Comp Systems from EconWPA

Abstract: A fundamental question in economics since the 1930s has been whether an administrative price system could simulate the results of perfect competition even without a true market for the means of production. The theoretical possibility of such a system has been known since the introduction of market socialism by Oskar Lange. We have used the artificial bidding market involved in the Czech voucher privatization process to test whether a sequential process of trial-and-error can set administrative prices close to equilibrium. It would appear from this natural experiment that Robbins and Hayek were correct in doubting the real-world feasibility of market socialism.

Keywords: Bidding scheme; Oskar Lange’s model; Privatization; Price setting; Voucher scheme (search for similar items in EconPapers)
JEL-codes: P00 P22 (search for similar items in EconPapers)
Date: 2001-02-12
Note: Type of Document - Acrobat PDF; pages: 12 ; figures: included
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Working Paper: Lange and Hayek Revisited: Lessons from Czech Voucher Privatization (2000)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpdc:0012005

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