Dispersed knowledge

Dispersed knowledge in economics is the notion that no single agent has information as to all of the factors which influence prices and production throughout the system.

[4] Some economists believe that market transactions provide the basis for a society to benefit from the knowledge that is dispersed among its constituent agents.

For example, in his Principles of Political Economy, John Stuart Mill states that one of the justifications for a laissez faire government policy is his belief that self-interested individuals throughout the economy, acting independently, can make better use of dispersed knowledge than could the best possible government agency.

Richard LeFauve highlights the advantages of organizational structure in companies: "Before if we had a tough decision to make, we would have two or three different perspectives with strong support of all three.

Companies are supposed to think highly of the dispersed knowledge and make adjustments to meet demands.