Adam Smith and the welfare cost of optimism.
The writer explores the welfare losses identified by Adam Smith as occurring because competition allocates resources to the highest bidders, whose expectations usually have an optimistic bias. He generalizes Smith's thesis on interest ceilings to a plan for resource allocation, and he examines 20th...
| Publicado en: | History of Political Economy Vol. 29; pp. 185 - 201 |
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| Formato: | Artículo |
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Duke University Press
Summer 1997
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| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | The writer explores the welfare losses identified by Adam Smith as occurring because competition allocates resources to the highest bidders, whose expectations usually have an optimistic bias. He generalizes Smith's thesis on interest ceilings to a plan for resource allocation, and he examines 20th-century literature for traces of this plan. He translates this argument into a model of resource allocation among three agents and then develops it for any number of agents. |
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