Price-takers VS. Great Numbers: Rethinking the Edgeworth-Walras Convergence on Perfect Competition Perfect Competition à la Debreu–Scarf
This paper is part of a larger research project on the evolution of the Perfect Competition concept in a historical perspective. We try to follow the changes this concept has gone through from the different alternative views during the so-called Marginal Revolution" towards the consolidation of the price-taker hypothesis.Some recent theoretical developments have underlined the importance of giving up the hypothesis of price taking agents.1 These developments plead for a different conception of the theoretical functioning of the market. This implies to model a perfectly competitive market based on strategic behaviour rather than using the traditional Walrasian conception of agents. These works intend avoiding the common trend in economic theory where imperfect competition is ncreasinglytaking the place of perfect competition as the general framework because of, as has been stated by Arrow (1959), if we accept the price-taker hypothesis as the equivalent of perfect competition we have no other alternative than to introduce the Walrasian auctioneer. This ´pessimistic view´ on perfect competition pushes Arrow to postulate that in order to give a more realistic interpretation of economic reality (without the fiction of the centralizing auctioneer) we need to build imperfect competition models. The only difference with the basic Walrasian competitive model being the abandonment of the hypothesis of price-taker agents."
|Date of creation:||13 Jan 2009|
|Date of revision:|
|Contact details of provider:|| |
When requesting a correction, please mention this item's handle: RePEc:col:000178:005216. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vladimir Leonardo Celis Agudelo)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.