ECO.1:2 - Problem

An optimizer can solve the problem it receives while its numbers conceal the decisive difficulty. An internal transfer price may express a management policy; an old purchase price records a past exchange; a shadow price expresses a marginal trade-off within a particular optimization problem. Substituting one for another can rank alternatives which nobody can actually obtain.

Economic calculation also has a scope. Monetary results describe consequences under particular exchange conditions and rights. They do not add different people’s satisfactions into a common measure or establish physical feasibility.