On Definitions and the Problems of Measurement

Since the late 1920s and the raising of microeconomic consciousness by Sraffa’s (1926), Chamberlin’s (1948) and Robinson’s (1948) work,1 it has been recognized that firms compete in many dimensions besides price, and that their decision making is complicated by the interdependence among price and nonprice strategies. Within the body of oligopoly analysis, differentiated oligopoly has come to be accepted as the dominant structure of interest. Yet progress in the formal integration of product properties into decision models and analysis of the social consequences of their presence lags behind that achieved in analyzing strategic pricing decisions by such techniques as game theory. This books attempts to make progress in the analysis of integrated competition through the use of both conventional and unconventional techniques, whose adoption and development are the products of some years of coping with the enigmas of oligopolistic decision making. Because the reader — and especially the younger reader — will find some of the nonconventional methods and the mindset that leads to their adoption unfamiliar and perhaps unworthy in this age of economic “scientism,” some explanation of their genesis and rationalization is incumbent on the author.