Profit Maximization, Industry Structure, and Competition: A critique of neoclassical theory
Steve Keen, Russell K. Standish
Abstract
Neoclassical economics has two theories of competition between profit-maximizing firms (Marshallian and Cournot-Nash) that start from different premises about the degree of strategic interaction between firms, yet reach the same result, that market price falls as the number of firms in an industry increases. The Marshallian argument is strictly false. We integrate the different premises, and establish that the optimal level of strategic interaction between competing firms is zero. Simulations support our analysis and reveal intriguing emergent behaviors.
Create a lesson
Related papers
Low-Dimensional Reduction Theory for Populations of Phase Oscillators with a Gaussian Frequency Distribution
Kai Tokunaga
Asymmetric Coupling Anisotropy for Causal Information Filtering in Physical Reservoirs
Takashi Hikihara, Yuma Aoki
Mixed-mode bursting oscillations in a three-timescale biophysical neuronal oscillator model
Ngoc Anh Phan, Yangyang Wang
Topology-Biased Resource Constraints Shape Synchronization Pathways in Hindmarsh-Rose Oscillator Networks
Zhouqi Li, Xiaoyan He, Yuanhong Bi et al.
Inertial synchronization of networked oscillators in arbitrary dimensions
Kirill Kovalenko, Bruce X. Dai, Fanshu Fang et al.
Thermodynamic criticality of coupled oscillators
Suvam Pal, Sudipta Mukherji, Jurgen Kurths et al.