The balance between centralized and decentralized decision making is sometimes delicate.
Adaptive efficiency encourages the development of decentralized decision making processes that will allow societies to explore many alternative ways to solve problems.
The institutions therefore must not only provide low-cost measurement of property rights and bankruptcy laws, but also provides incentives to encourage decentralized decision making and effective competitive markets.
Thus the price system is a mechanism that coordinates individual decentralized decisions which in turn control the allocation of resources in a market economy.
