Lange and Hayek Revisited: Lessons from Czech Voucher Privatization

Jan Hanousek and Randall Filer

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

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: 2000-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Lange and Hayek Revisited: Lessons from Czech Voucher Privatization (2001)
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