Knowledge that Transforms

IN THIS PAPER we investigate the properties of the winning bid in a sealed bid tender auction where each player has private information. We find that it is possible for the winning bid to converge in probability to the true value of the object at auction, even though no bidder knows the true value. Necessary and sufficient conditions for this phenomenon are derived, extending and generalizing certain of Wilson's results [3]. We study an auction in which a seller offers to sell at the highest bid an item of unknown value V. The kth bidder receives a private signal Sk (for k = 1, 2,.. .) and submits a bid without knowledge of the other signals. A finitely additive probability measure P reflects the bidders' unanimous beliefs about V and the signals. Conditional on V, the signals are independent and identically distributed. The signals take their values in some space &'. With n bidders, a bidding strategy for k is a function Pnk: 9' -> R. k's strategy specifies that upon receiving the signal Sk, he shall bid Pnk(Sk).2 Thus the winning

Film is rapidly becoming in the twentieth century what the popular low-priced pamphlet was in the seventeenth century--an important and influential vehicle by which (as Schumpeter called them) bring their case before the public. This article evaluates the economic content of a sample of a large and rapidly growing stock of viewing literature. Each film surveyed here is distributed and maintained in good repair by a highly efficient network of distributors. With the rapid diffusion of easy-to-use playback equipment both at schools and private organizations, I expect film to continue to grow in importance as one instrument by which the public stays informed about social problems and examines a range of possible solutions. In fact, a number of colleges have already included media centers in their libraries, and the day is rapidly approaching when all but the most traditional professors will include assigned viewings on their course reading lists. (1) The films surveyed here are targeted at groups as diverse as elementary school children, church organizations, college students, community groups, and union locals. Many of these films were designed to acquaint the viewer with the facts about a certain issue while promoting a good image of the sponsoring organization. While these special pleaders light our screens with their points of view, it is still our responsibility as professional economists to monitor these developments before the madmen in authority, which Keynes wrote about so perceptively, become the slaves of some defunct filmmaker. With this purpose in mind I have prepared a bibliography of (mostly) 16 mm documentary film that identifies each film by title and then lists the current (American) distributor followed by the producer and the date the film was released. A second listing of the distributors and their addresses permits any interested reader to track down the film for private viewing or classroom teaching. When preparing the bibliography I was disturbed by the lack of any standard of generally accepted citation practice having to do with film. While it is too much to expect at this stage of technological development that scholars indicate a range of frame numbers analogous to a range of page numbers when footnoting film, it would be useful to identify the author-equivalent of a film, especially when it is a documentary and a particular point of view is being expressed. A large number of the films included in this sample announce the name of a Ph.D. consultant, and since this seems to be a prerequisite for films that are marketed among educators for classroom adoption, I have listed the names of consultants, narrators, script writers, and so on. It is not clear, however, what responsibilities are assumed by the outside consultant. Did the consultant write the script? Did the consultant read the script written by others? Did the consultant choose the visuals? To the best of my knowledge there is no established job description for consultants in the documentary film industry. (2) I have organized my discussion according to six general subject areas that seem to be of as much interest to filmmakers as they are to economists. In each one, I shall identify the special pleaders, their overall mission, the audience to whom the film is directed, and the quality of the economic reasoning employed. I The Serf-Interest Axiom As a general rule, Hollywood has portrayed the impact wealth maximization has on human behavior as dehumanizing and corrupting (19, 56, 58, 59, 64, 91, 103, 136, 173). The POW camp entrepreneur King Rat (91) is certainly not credited with improving economic life among the prisoners. Instead his commodity arbitrage operations destroy him and those around him. In Fountainhead (56), however, integrity-maximization turns out to be (unexpectedly?) wealth-maximizing as Ayn Rand's entrepreneur-architect hero eventually triumphs within a malevolent economic environment. …

ECONOMISTS have smiled at the remark attributed to Keynes that practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. We delude ourselves if we do not recognize a similar bondage to the ancient Greeks. Theodor Gomperz wrote: Even those who have no acquaintance with the doctrines and writings of the great masters of antiquity, and who have not even heard the names of Plato and Aristotle, are, nevertheless under the spell of their authority. It not only that their often transmitted to us by their followers, ancient and modern: our whole mode of thinking, the categories in which our ideas move, the forms of language in which we express them, and which therefore govern our ideas,-all these are to no small extent the products of art, in large measure the art of the great thinkers of antiquity. A thorough comprehension of these origins, he warned, is indispensable if we are to escape from the overpowering despotism of their influence [49, Gomperz, 1896, pp. 528-29]. Although it frequently contended that the science of economics began with Adam Smith's Wealth of Nations or, at the earliest, with the writings of the French Physiocrats during the eighteenth century, we should not forget the remarkable fact that the name for the discipline of economics derived from the Greek word oikonomia [108, Kurt Singer, 1958].1 The Greeks used the word for a formal discipline that dealt with an abstract subject matter (estate management and public administration), a usage that maintained some continuity for more than two thousand years before the discipline became known as political economy.2 In Pla-