THE ECONOMICS OF THE MARKET: INFORMATION AND VALUATION
||THE ECONOMICS OF THE MARKET: INFORMATION AND VALUATION
||7th European Real Estate Society Conference (14-16 June 2000) Bordeaux, France
||Economic theory is concerned with the production, distribution and consumption of resources namely factors of production, goods and services most of which are subject to exchange within a market. Much economic theory is concerned with the central debate respecting the conditions necessary for the optimal allocation of resources through market exchange. The paper explains the analysis of individual economic agentís preferences and its translation into measures of individual and social welfare and societyís valuation on the specific use of resources. Economic theory bases valuation upon individual preferences expressed through individual agentís interactive behaviour within a perfect market. Limitations of this theoretical approach and its underlying assumptions are explained. The current radical critique of economic methodology is considered in relation to the valuation of resources (see for example Lawson). In particular the implications of assumptions with respect to perfect versus non-perfect information available to agents acting as decision makers in a market are discussed. in the context of valuation. The paperís critique of the currently available methodology draws upon recent developments in the theoretical economics literature to complement that of property valuation in order to offer a constructive insight into the current debate on economic valuation. In particular, the distributive and allocative implications of current economic thinking concerning information and competitive markets for valuation is discussed. The paper is accordingly of interest to all those concerned with valuation theory in the context of the economic debate as to the efficiency of the market as a mechanism for trade in respect to the property market.
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