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Classical and Neoclassical Elements in Industrial Organization

Author

Listed:
  • Mark Glick

    (University of Utah)

  • Eduardo M. Ochoa

    (California State University, Los Angeles)

Abstract

Industrial organization studies of pricing are examined, focusing on the formative debates of 1950-70. It is argued that most of these studies unknowingly adopted a mixture of classical and neoclassical theory, leading to three types of confusions. First, over what measure of profitability is equalized in competitive equilibrium. Second, over what period of time profitability differentials must be studied. Third, over the correct conclusions to be drawn for industry phenomena from firm studies of profitability. The paper concludes by questioning the practicability of a purely neoclassical theoretical grounding for industrial economists, since they abandon this approach in their empirical work.

Suggested Citation

  • Mark Glick & Eduardo M. Ochoa, 1990. "Classical and Neoclassical Elements in Industrial Organization," Eastern Economic Journal, Eastern Economic Association, vol. 16(3), pages 197-207, Jul-Sep.
    • Handle: RePEc:eej:eeconj:v:16:y:1990:i:3:p:197-207
    as

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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume16/V16N3P197_207.pdf
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    References listed on IDEAS

    as
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    6. Mueller,Dennis C., 2009. "Profits in the Long Run," Cambridge Books, Cambridge University Press, number 9780521101592.
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    8. Stephen H. Sosnick, 1958. "A Critique of Concepts of Workable Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(3), pages 380-423.
    9. MacAvoy, Paul W & McKie, James W & Preston, Lee E, 1971. "High and Stable Concentration Levels, Profitability, and Public Policy: A Response," Journal of Law and Economics, University of Chicago Press, vol. 14(2), pages 493-499, October.
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    1. Theodore P. Lianos & Vassilis Droucopoulos, 1993. "Convergence and Hierarchy of Industrial Profit Rates: The Case of Greek Manufacturing," Review of Radical Political Economics, Union for Radical Political Economics, vol. 25(2), pages 67-80, June.

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