Pub. date: 2007 | Online Pub. Date: September 25, 2007 | DOI: 10.4135/9781412952637 | Print ISBN: 9780761923879 | Online ISBN: 9781412952637| Publisher:Sage Publications, Inc.About this encyclopedia
Thomas J. Miceli
Economists have long recognized the importance of information as a valuable resource, but its role in evaluating the performance of markets has changed dramatically in recent decades. In the middle of the twentieth century, the famous economist Friedrich von Hayek (1899–1992) emphasized the superiority of markets over central planning for transmitting dispersed information, thereby coordinating the actions of agents throughout the economy. In this way, a spontaneous order emerges that largely precludes the need for government intervention. The role of the government in this view is limited to the enforcement of property rights. In recent decades, however, economists have recognized that markets are themselves sometimes impeded by imperfect information, thus opening the door to an expanded role for the government in increasing the efficiency of market outcomes. Indeed, one of the aims of the law and economics movement has been to suggest how various legal (primarily common law) doctrines can ...