…is from F.A. Hayek’s 1946 Princeton University Lecture “The Meaning of Competition,” reprinted as Chapter 5 in Individualism and Economic Order. The following appears on page 97:
In actual life the fact that our inadequate knowledge of the available commodities or services is made up for by our experience with the persons or firms supplying them-that competition is in a large measure competition for reputation or good will-is one of the most important facts which enables us to solve our daily problems. The function of competition is here precisely to teach us who will serve us well: which grocer or travel agency, which department store or hotel, which doctor or solicitor, we can expect to provide the most satisfactory solution for whatever particular personal problem we may have to face.