Personal and local knowledge can be harnessed by either centralized or decentralized decision‐making processes. Centralized decision‐making works insofar as the decision maker has access to the relevant personal and local knowledge. Since such access is limited, such decision‐making must be limited as well. Decentralizing jurisdiction to individuals and associations who have access to the relevant knowledge permits them to act on the basis of their personal and local knowledge. Requiring that transfers of jurisdiction be consensual, it addresses the ability of individuals and associations to...

Personal and local knowledge can be harnessed by either centralized or decentralized decision‐making processes. Centralized decision‐making works insofar as the decision maker has access to the relevant personal and local knowledge. Since such access is limited, such decision‐making must be limited as well. Decentralizing jurisdiction to individuals and associations who have access to the relevant knowledge permits them to act on the basis of their personal and local knowledge. Requiring that transfers of jurisdiction be consensual, it addresses the ability of individuals and associations to incorporate into their decisions, the personal and local knowledge of others by making possible a meaningful system of resource prices.