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An Austrian Theory of the Firm

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  • Lewin, Peter
  • Phelan, Steven E

Abstract

The modern Theory of the Firm uses the concept of rent and makes implicit assumptions about equilibrium. An Austrian (Market Process) Theory of the Firm should have something to say about each of these. Two strategic perspectives are analyzed, the neoclassical microeconomic perspective (using the Ricardo-Marshall approach to rent) and the Market Process perspective (using the Fetter approach to rent). In a neoclassical world, rents indicate "unsolved" or unexploited "inefficiencies" as every hypothetical outcome is viewed against the standard of perfect competition. By contrast, in the Market Process world there is no single ideal standard by which to measure any particular outcome. All action takes place in an open-ended universe in which the future is continually being created, in which competition is a "discovery process." Copyright 2000 by Kluwer Academic Publishers

Suggested Citation

  • Lewin, Peter & Phelan, Steven E, 2000. "An Austrian Theory of the Firm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 13(1), pages 59-79, February.
  • Handle: RePEc:kap:revaec:v:13:y:2000:i:1:p:59-79
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    Cited by:

    1. Siegfried K. Berninghaus & Werner Güth, 2009. "Buying Versus Hiring-An Indirect Evolutionary Approach," Metroeconomica, Wiley Blackwell, vol. 60(4), pages 619-637, November.
    2. Nicolai J. Foss & Peter G. Klein, 2010. "Austrian Economics and the Theory of the Firm," Chapters,in: The Elgar Companion to Transaction Cost Economics, chapter 27 Edward Elgar Publishing.
    3. Argandoña, Antonio, 2010. "From action theory to the theory of the firm," IESE Research Papers D/855, IESE Business School.
    4. Sierdjan Koster & Nardo de Vries, 2011. "The networks of the solo self-employed and their success," Scales Research Reports H201111, EIM Business and Policy Research.
    5. Hallensleben, Tobias & Jain, Anil K. & Manger, Daniela & Moldaschl, Manfred, 2011. "Innovationskompetenz und Performanz," Papers and Preprints of the Department of Innovation Research and Sustainable Resource Management 3/2011, Chemnitz University of Technology, Faculty of Economics and Business Administration.
    6. Pierre Garrouste, 2008. "The Austrian roots of the economics of institutions," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(4), pages 251-269, December.
    7. Steven E. Phelan, 2016. "Austrian theories of entrepreneurship: Insights from complexity theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(3), pages 277-297, September.
    8. Sierdjan Koster, 2009. "Taking The First Hurdle In New Firm Formation. The Effects Of Industry-Specific Skills And Support On Survival During The Founding Process," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 3(1), pages 36-62, JUNE.
    9. Robert Mulligan, 2006. "Accounting for the business cycle: Nominal rigidities, factor heterogeneity, and Austrian capital theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 19(4), pages 311-336, December.
    10. Nicolai J. Foss, 2002. "The Strategy and Transaction Cost Nexus Past Debates, Central Questions, and Future Research Possibilities," DRUID Working Papers 02-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    11. Sylvia Maxfield, 2008. "Reconciling Corporate Citizenship and Competitive Strategy: Insights from Economic Theory," Journal of Business Ethics, Springer, vol. 80(2), pages 367-377, June.
    12. Moldaschl, Manfred, 2011. "Warum Gazellen nachts nicht leuchten: Evolutorische Theorie der Unternehmung," Papers and Preprints of the Department of Innovation Research and Sustainable Resource Management 1/2011, Chemnitz University of Technology, Faculty of Economics and Business Administration.

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