An Interpretive Approach to Meanings of Prices

An Interpretive Approach to Meanings of Prices Austrian economists have repeatedly argued that the price mechanism is not just an allocative, but also a communicative system: as a solution to the dispersed knowledge problem, prices convey meanings which serve as guideposts to economic action. The analysis of these meanings has been restricted to economic meanings such as profit opportunities and incentives, however. In this paper I show that prices also convey social and cultural meanings. This calls for an interpretive approach, which a younger generation of Austrian economists has advocated. To illustrate, I provide a thick description of price setting on the market for contemporary art. I show that collectors, art dealers, and artists communicate meaningfully via prices about issues such as the quality of artworks or the status hierarchies which structure the art world. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Review of Austrian Economics Springer Journals

An Interpretive Approach to Meanings of Prices

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2004 by Kluwer Academic Publishers
Subject
Economics; Public Finance; Political Science; History of Economic Thought/Methodology
ISSN
0889-3047
eISSN
1573-7128
D.O.I.
10.1023/B:RAEC.0000044637.79989.db
Publisher site
See Article on Publisher Site

Abstract

Austrian economists have repeatedly argued that the price mechanism is not just an allocative, but also a communicative system: as a solution to the dispersed knowledge problem, prices convey meanings which serve as guideposts to economic action. The analysis of these meanings has been restricted to economic meanings such as profit opportunities and incentives, however. In this paper I show that prices also convey social and cultural meanings. This calls for an interpretive approach, which a younger generation of Austrian economists has advocated. To illustrate, I provide a thick description of price setting on the market for contemporary art. I show that collectors, art dealers, and artists communicate meaningfully via prices about issues such as the quality of artworks or the status hierarchies which structure the art world.

Journal

The Review of Austrian EconomicsSpringer Journals

Published: Oct 27, 2004

References

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