Humans act upon their interpretations of data

Free Banking: Theory, History and a Laissez-Faire Model (Larry J. Sechrest)
- Highlight Loc. 1857-61  | Added on Friday, November 11, 2011, 11:42 PM

Not only is knowledge widely dispersed, but it is also resistant to aggregation. Objective data, such as changes in specific prices, are not the basis for human action. Humans act upon their interpretations of those data, and each interpretation may be different. “A rise in the price of a given commodity, for example, will have different meanings depending on the ‘elasticity of expectations’ of the receiver. A price rise may signal higher or lower future prices when the subjective context of the data is taken into account” (O’Driscoll and Rizzo 1985, 41).