The classical notion of competition revisited
AbstractThe paper seeks to fill a lacuna within Classical economics concerning the process of market price determination in a short-period equilibrium. To this aim, first we distinguish the Classical notion of free competition from the Walrasian notion of perfect competition and we argue that the latter is beset by some theoretical difficulties alien to the former. Second, we reconstruct in some detail Smith and Marx’s views concerning market price determination and we show that Marx’s extensive use of metaphors and numerical examples foreshadows the modern taxonomy of buyers’ market, sellers’ market and mixed strategy equilibrium in the capacity space of a standard Bertrand duopoly model. Finally, we highlight similarities and differences between the Classical notion of competition and contemporary game-theoretic oligopoly models
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 22760.
Date of creation: 17 May 2010
Date of revision: 17 May 2010
Classical and neoclassical notions of competition; Adam Smith; Karl Marx; mixed strategies.;
Other versions of this item:
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-29 (All new papers)
- NEP-COM-2010-05-29 (Industrial Competition)
- NEP-HIS-2010-05-29 (Business, Economic & Financial History)
- NEP-HPE-2010-05-29 (History & Philosophy of Economics)
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