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Retrospectives: The Origins of the Representative Agent

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  • James E. Hartley

Abstract

This paper examines Alfred Marshall's invention of the representative firm. Marshall first used the representative firm in order to describe an industry supply curve for an industry with heterogeneous firms. Despite Marshall's limited use of the notion, the representative agent was extensively criticized as an ephemeral, useless construct that was unable to account for economic growth and that ignored important heterogeneities. The criticisms succeeded in banishing the representative agent from economics. These initial criticisms are also shown to apply to modern uses of the representative agent as well.

Suggested Citation

  • James E. Hartley, 1996. "Retrospectives: The Origins of the Representative Agent," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 169-177, Spring.
    • Handle: RePEc:aea:jecper:v:10:y:1996:i:2:p:169-77
    Note: DOI: 10.1257/jep.10.2.169
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.2.169
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    References listed on IDEAS

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    3. Marshall, Alfred, 1920. "Industry and Trade," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number marshall1920.
    4. Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
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    Cited by:

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    2. Antonella Stirati, 2013. "Sraffa's 1930 manuscripts on the representative firm and Marshall's theory of value and business profit," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 20(3), pages 439-465, June.
    3. Aoki, Masanao & Hawkins, Raymond J., 2010. "Non-self-averaging and the statistical mechanics of endogenous macroeconomic fluctuations," Economic Modelling, Elsevier, vol. 27(6), pages 1543-1546, November.
    4. Aoki, Masanao & Hawkins, Raymond, 2009. "Macroeconomic Relaxation: Adjustment Processes of Hierarchical Economic Structures," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-21.
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    6. Thomas Holtfort & Andreas Horsch, 2023. "Social science goes quantum: explaining human decision-making, cognitive biases and Darwinian selection from a quantum perspective," Journal of Bioeconomics, Springer, vol. 25(2), pages 99-116, August.
    7. Kobbi Nissim & Rann Smorodinsky & Moshe Tennenholtz, 2018. "Segmentation, Incentives, and Privacy," Mathematics of Operations Research, INFORMS, vol. 43(4), pages 1252-1268, November.
    8. Holtfort, Thomas, 2023. "Quantenökonomie: Einfluss der Quantenphysik auf ökonomische Entscheidungsprozesse," Arbeitspapiere der FOM 88, FOM Hochschule für Oekonomie & Management.
    9. Alberto Jaramillo & Hermilson Velásquez & Javier Santiago Ortiz & Natalia Serna, 2003. "Aspectos teóricos y empíricos de la relación empresas bancos," Documentos de Trabajo de Valor Público 3922, Universidad EAFIT.
    10. Frank Schohl, 1998. "The Paradoxical Fate of the Representative Firm," Working Paper Series B 1998-03, Friedrich Schiller University of Jena, School of of Economics and Business Administration.
    11. Herzberg, Frederik, 2010. "A representative individual from Arrovian aggregation of parametric individual utilities," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1115-1124, November.
    12. Senbeta, Sisay, 2011. "How applicable are the new keynesian DSGE models to a typical low-income economy?," MPRA Paper 30931, University Library of Munich, Germany.
    13. Kazuo Sano, 2022. "Intelligence and Global Bias in the Stock Market," Papers 2210.16113, arXiv.org.
    14. Carlos Alberto Ibarra, 1998. "Exchange Rate Policy Credibility in Mexico, 1991-1994," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(2), pages 229-266, July-Dece.
    15. Oscar Andrés Espinosa Acuna & Paola Andrea Vaca González, 2012. "La educación como motor de desarrollo integral: la importancia del capital humano en el crecimiento económico y social de largo plazo," Econógrafos, Escuela de Economía 9936, Universidad Nacional de Colombia, FCE, CID.
    16. Michael Paetz, 2007. "Robust Control and Persistence in the New Keynesian Economy," Quantitative Macroeconomics Working Papers 20711, Hamburg University, Department of Economics.
    17. Bos Iwan & Vermeulen Dries, 2022. "On the Microfoundation of Linear Oligopoly Demand," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 22(1), pages 1-15, January.
    18. Philipp Koellinger & Matthijs Loos & Patrick Groenen & A. Thurik & Fernando Rivadeneira & Frank Rooij & André Uitterlinden & Albert Hofman, 2010. "Genome-wide association studies in economics and entrepreneurship research: promises and limitations," Small Business Economics, Springer, vol. 35(1), pages 1-18, July.
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    More about this item

    JEL classification:

    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics

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