The use of knowledge in society

Hayek, Friedrich A. von

doi:10.1017/cbo9780511817410.007

Cited by 2,399 publications

(2,524 citation statements)

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“…Diversity in accounting practice, or accounting choice, is thus essential to the development of GAAP rules that facilitate efficient contracting. Without accounting choice, there can be no experimentation, and without experimentation, "best practices" cannot develop (see for example, Hayek, 1945;Porter, 1996;and Hayek, 2002, on the role of competition and choice in developing best practices). Absent frictions, infinite accounting choice might be available in an unregulated setting; in practice, however, we expect accounting choice to be limited by human ingenuity and transaction costs, including limits set forth by courts and other institutions concerned with enforcing contracts written on financial statements (see for example, Ball, 2009, on the role of enforcement in determining accounting practice).…”

Section: The Role Of Choice Within Gaap: Principles or Rules?mentioning

confidence: 99%

Implications for GAAP from an analysis of positive research in accounting

Kothari¹,

Ramanna

Skinner

2010

Journal of Accounting and Economics

574

356

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Based on extant literature, we review the positive theory of GAAP. The theory predicts that GAAP's principal focus is on control (performance measurement and stewardship) and that verifiability and conservatism are critical features of a GAAP shaped by market forces. We recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets, but caution against expanding fair values to financial reporting more generally. We conclude that rather than converging U.S. GAAP with IFRS, competition between the FASB and the IASB would allow GAAP to better respond to market forces.

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Section: The Role Of Choice Within Gaap: Principles or Rules?mentioning

confidence: 99%

Implications for GAAP from an analysis of positive research in accounting

Kothari¹,

Ramanna

Skinner

2010

Journal of Accounting and Economics

574

356

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“…Choosing a definition which uses the term in a broad sense, one may state that knowledge comprises all cognitions and all abilities that individuals use to solve problems, to make decisions and to understand incoming information. The terms "knowledge" and "information" therefore denote separate things, and knowledge is understood as a tool that can be consciously used by individuals -although it certainly can also be used subconsciously, a fact introduced into the economic context by Hayek (1945). Hayek has also been responsible for pointing out the existence of dispersed knowledge, a dispersion that can occur between individuals and also in a spatial dimension.…”

Section: Externalities In the Production Of Knowledge And Regional Spmentioning

confidence: 99%

What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature

Döring¹,

2006

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. with persistently different levels of growth. This paper provides a survey of theoretical and empirical findings on this. Terms of use: Documents in• The theoretical concept of knowledge spillovers is outlined by discussing the different types of knowledge, the spatial dimension of knowledge spillovers, and the geographical mechanisms and structural conditions of knowledge diffusion. Such spillovers lead to dynamic externalities, and to agglomeration effects in the geographical dimension. Both effects constitute path dependencies in the economic growth of regions.• Existing recent empirical studies mainly support the theoretically derived hypotheses. This applies especially to the importance of knowledge spillovers for regional productivity and innovative behaviour.• In addition to the large number of surveyed contributions, the paper refers also to unanswered questions, i.e. the normative question whether the theoretical considerations and empirical evidence warrant any economic policy measures actively encouraging knowledge spillovers.Thomas Döring, University of Kassel and Philipps-University Marburg Jan Schnellenbach, Philipps-University Marburg What Do We Know About Geographical Knowledge Spillovers and Regional Growth? -A Survey of the LiteratureThomas Döring University of Kassel and Philipps-University Marburg and Jan Schnellenbach * Philipps-University Marburg AbstractModern (endogenous) growth theory tells us that knowledge spillovers are crucial for the growth of high-income economies. Against this background the paper provides a survey of theoretical and empirical findings highlighting the question of how geographically limited knowledge diffusion can help to explain clusters of regions with persistently different levels of growth. The paper discusses this topic in two steps: First, the theoretical concept of knowledge spillovers is outlined by discussing the different types of knowledge, the spatial dimension of knowledge spillovers, and the geographical mechanisms and structural conditions of knowledge diffusion. This discussion shows that the literature on knowledge spillovers focuses on the hypotheses that such spillovers lead to dynamic externalities and -in the geographical dimension -to agglomeration effects, both of which constitute path dependence in the economic growth of regions. Second, the paper analyses the empirical evidence for these theoretical findings. Existing empirical work mainly supports the theoretically derived hypothes...

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“…Various influential economists, including Lerner (1944), von Hayek (1945, and Marschak (1955), criticized the feasibility and plausibility of a centrally operated resource allocation mechanism. For example, von Hayek developed his fundamental critique of central planning by pointing out that the informational requirements of centrally operated mechanisms would be prohibitive and suggested instead that it is markets that provide the best and most economical means of aggregating useful information.…”

Section: Introductionmentioning

confidence: 99%

Markets versus governments

Acemoğlu¹,

Golosov²,

Tsyvinski

2008

Journal of Monetary Economics

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We provide a simple framework for comparing market allocations with government-regulated allocations. Governments can collect information about individuals' types and enforce transfers across individuals. Markets (without significant government intervention) have to rely on transactions that are ex post beneficial for individuals. Consequently, governments achieve better risk sharing and consumption smoothing than markets. However, politicians in charge of collective decisions can use the centralized information and the enforcement power of government for their own benefits. This leads to political economy distortions and rents for politicians, making government-operated allocation mechanisms potentially worse than markets. We provide conditions under which it is ex ante beneficial for the society to tolerate the political economy distortions in exchange for the improvement in risk sharing. For example, more effective controls on politicians or higher discount factors of politicians make governments more attractive relative to markets. Moreover, when markets cannot engage in self-enforcing risk-sharing arrangements and income effects are limited, greater risk aversion and greater uncertainty make governments more attractive relative to markets. Nevertheless, we also show theoretically and numerically that the effect of risk aversion on the desirability of markets may be non-monotonic. In particular, when markets can support self-enforcing risk-sharing arrangements, a high degree of risk aversion improves the extent of risk sharing in markets and makes governments less necessary. The same pattern may also arise because of ''income effects'' on labor supply. Consequently, the welfare gains of governments relative to markets may have an inverse U-shape as a function of the degree of risk aversion of individuals. r

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The use of knowledge in society

Cited by 2,399 publications

References 0 publications

Implications for GAAP from an analysis of positive research in accounting

Implications for GAAP from an analysis of positive research in accounting

What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature

Markets versus governments

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