DYNAMICS OF “INVISIBLE HAND” AND INFORMATION ECONOMICS

The purpose of this article is to explore the invisible hand in the modern economies. In other words this article is to test the applicability of Smith’s famous metaphor and its relevance to the new area of information economics. In the first section the authors discuss the historical context, followed by a dynamic approach to invisible hand., i.e. its shaking, and conclude with the malfunctioning of the invisible hand in the information economics. Later they discuss information economics as a definite market failure, finding irrelevance of invisible hand in modern economies