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Austrian and Neoclassical Economics: Any Gains from Trade?

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  • Sherwin Rosen

Abstract

The systems aspects of Austrian economic thought pertaining to the process of competition deserve a prominent place in modern economic thinking. The paper develops the differences between the Austrian view of competition as an evolutionary process, and the neoclassical emphasis on determining market equilibrium under known or given conditions. These bear importantly on the fundamental way we think about decentralization of economic activities among highly specialized agents with incomplete knowledge and information. The role of competition as a selection device that often encourages survival of the fittest and solves some types of agency problems is well worth thinking about.

Suggested Citation

  • Sherwin Rosen, 1997. "Austrian and Neoclassical Economics: Any Gains from Trade?," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 139-152, Fall.
  • Handle: RePEc:aea:jecper:v:11:y:1997:i:4:p:139-52 Note: DOI: 10.1257/jep.11.4.139
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    References listed on IDEAS

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    1. Myerson, Roger B, 1979. "Incentive Compatibility and the Bargaining Problem," Econometrica, Econometric Society, vol. 47(1), pages 61-73, January.
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    3. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, pages 701-715.
    4. Coase, R H, 1974. "The Market for Goods and the Market for Ideas," American Economic Review, American Economic Association, pages 384-391.
    5. Rosen, Sherwin, 1983. "Specialization and Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 43-49, January.
    6. Joseph Persky, 1991. "Retrospectives: Lange and von Mises, Large-Scale Enterprises, and the Economic Case for Socialism," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 229-236, Fall.
    7. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
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    Citations

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    Cited by:

    1. Randall G. Holcombe, 2008. "Pluralism versus Heterodoxy in Economics and the Social Sciences," The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, vol. 1(2), pages 51-72, March.
    2. Richard Seymour, 2006. "Hermeneutic phenomenology and international entrepreneurship research," Journal of International Entrepreneurship, Springer, vol. 4(4), pages 137-155, December.
    3. Sjoerd Beugelsdijk, 2007. "Entrepreneurial culture, regional innovativeness and economic growth," Journal of Evolutionary Economics, Springer, pages 187-210.
    4. Milo Bianchi & Magnus Henrekson, 2005. "Is Neoclassical Economics still Entrepreneurless?," Kyklos, Wiley Blackwell, vol. 58(3), pages 353-377, July.
    5. Takii, Katsuya, 2008. "Fiscal policy and entrepreneurship," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 592-608, March.
    6. Daniel B. Klein, 2005. "The Ph.D. Circle in Academic Economics," Econ Journal Watch, Econ Journal Watch, pages 133-148.
    7. Zafirovski, Milan, 1999. "A socio-economic approach to market transactions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 28(3), pages 309-334.
    8. de Soto Jesus Huerta, 1998. "The Ongoing Methodenstreit of The Austrian School," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 8(1), pages 1-40, March.
    9. Kakarot-Handtke, Egmont, 2011. "The propensity function as formal passkey to economic action," MPRA Paper 34051, University Library of Munich, Germany.
    10. Gunnar Eliasson & Magnus Henrekson, 2004. "William J. Baumol: An Entrepreneurial Economist on the Economics of Entrepreneurship," Small Business Economics, Springer, pages 1-7.
    11. Frydman, R. & Hessel, M. & Rapaczynski, A., 2000. "Why Ownership Matters? Entrepreneurship and the Restructuring of Enterprises in Central Europe," Working Papers 00-03, C.V. Starr Center for Applied Economics, New York University.
    12. Jesús Huerta DE SOTO, 2011. "The Essence Of The Austrian School And The Concept Of Dynamic Efficiency," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 7, pages 15-32, May.
    13. Reynolds, Bruce J., 2000. "Cooperative Principles as Constraints for Public Goods Production," 2000 Annual Meeting, December 12-13 31808, NCERA-194 Research on Cooperatives.
    14. Kakarot-Handtke, Egmont, 2010. "Axiomatic Basics of e-Economics," MPRA Paper 24331, University Library of Munich, Germany.
    15. William J. Rieber, 2016. "Ludwig Von Mises’ Neoclassical Analysis of Dumping," Atlantic Economic Journal, Springer;International Atlantic Economic Society, pages 447-455.
    16. William Stull, 2014. "Taking the Plunge: Teaching the Microeconomics of Entrepreneurship," International Advances in Economic Research, Springer;International Atlantic Economic Society, pages 139-150.
    17. Leland B. Yeager, 1997. "Austrian Economics, Neoclassicism, and the Market Test," Journal of Economic Perspectives, American Economic Association, pages 153-165.
    18. Cheng, Wenli & Yang, Xiaokai, 2004. "Inframarginal analysis of division of labor: A survey," Journal of Economic Behavior & Organization, Elsevier, vol. 55(2), pages 137-174, October.
    19. repec:kap:iaecre:v:20:y:2014:i:2:p:139-150 is not listed on IDEAS

    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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