ON DIFFERENT METHODS FOR ALLOCATING RESOURCES

THE SUBJECT OF ECONOMICS HAS OFTEN BEEN DESCRIBED AS DEALING WITH THE ALLOCATION OF INDIVIDUALLY OWNED SCARCE RESOURCES. PRICE THEORY, WHICH FORMS A CONSIDERABLE PART OF MICRO-ECONOMIC THEORY, DEALS WITH THE USE OF A PRICE MECHANISM IN SOLVING THE PROBLEMS OF PRODUCTION AND ALLOCATION OF RESOURCES AMONG A POPULATION. WHAT ARE THE ALTERNATIVES TO THE MARKET PLACE? WHERE ARE THEY USED AND HOW IMPORTANT ARE THEY TO THE ECONOMY? EIGHT DIFFERENT MECHANISMS ARE SUGGESTED FOR THE ALLOCATION OF RESOURCES. THE LIST IS SUGGESTIVE OF THE DIFFERENT APPROACHES USED IN SOCIETY AND IN EVERY OTHER SOCIETY FOR RESOURCE ALLOCATION. A SIMPLE-MINDED COST EFFECTIVENESS ANALYSIS WHICH FAILS TO ACCOUNT FOR THE NATURE AND COSTS OF THE ACTUAL DISTRIBUTION PROCESS MAY EASILY CAUSE LARGE-SCALE ERRORS. GIVEN THE NATURE OF A MODERN ECONOMY IT HAS NOT BEEN DEMONSTRATED THAT THE TREND IS NECESSARILY TOWARDS A LARGER FUNCTIONING OF THE PRICE SYSTEM. THE PROBLEMS OF LARGE-SYSTEM IMPLEMENTATION AND OF EXTERNAL ECONOMIES AND DISECONOMIES CERTAINLY POINT IN THE OPPOSITE DIRECTION. /AUTHOR/

  • Corporate Authors:

    RAND Corporation

    1776 Main Street, P.O. Box 2138
    Santa Monica, CA  United States  90407-2138
  • Authors:
    • Shubik, M
  • Publication Date: 1969-7

Subject/Index Terms

Filing Info

  • Accession Number: 00201875
  • Record Type: Publication
  • Source Agency: Traffic Systems Reviews & Abstracts
  • Report/Paper Numbers: P-4161
  • Files: TRIS
  • Created Date: Jul 27 1970 12:00AM