Analysis Of The Price Hearing System

There is an old saying in China that listen to both sides and you will be enlightened; heed only one side you will be benighted. The price hearing system is an important means of government regulation to micro-economy, the efficiency of which is now arousing people's close attention. The public hearing system has a long history which was introduced into China in the late 20^th century, however. As many cities hold price hearing conferences in China, the public hearing system is now widely applied in many fields. It provides a flat roof for the public to participate in the administrative decision-making procedure and helps to get rid of "pricing paradox" to make the government decision-making more scientific and rational to some extent. This essay argues that the price hearing system is an efficient institutional design; meanwhile, there are some efficiency loss to a certainty concerning such circumstances that we fail to solve asymmetric information and monopoly problems. In this essay we design a function to describe the efficiency of price hearing system. We try to explain the causes to the efficiency loss of the price hearing system from three perspectives: hearing price of monopoly products, degree of hearers' participation and that of manufactures' information exposure.