The Review of Austrian Economics

, Volume 28, Issue 3, pp 237–245 | Cite as

Discovery processes, science, and ‘knowledge–how:’ Competition as a discovery procedure in the laboratory

  • Vernon L. Smith


These edited remarks explore the relationship of the thought of F.A. Hayek to the development of experimental economics and related programs in economic design. Particularly emphasized are the insights of Hayek with respect to competition and their importance to the theoretical justification for, and empirical results derived from, the experimental study of market behavior. These remarks include some personal commentary on experimental methods, from the early double auctions of the 1960s through more recent work exploring the nature of business cycles. Finally, the intellectual history of the market structures examined in Vernon Smith’s work is discussed, comparing the exploration of the double auction to the horse market of Bohm-Bawerk, as well as the general insight of Adam Smith that causality stems from the propensity to truck, barter, and exchange to the discovery of specialization.


Vernon Smith F. A. Hayek Experimental economics Business cycles History of thought Nobel prize 

JEL Classification

A14 B21 B25 B53 D47 G21 


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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Chapman UniversityOrangeUSA

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