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Early Neoclassical Views on Monopoly: The Cournotian Heritage

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  • Andrés Álvarez

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Abstract

This paper analyses how Cournot‟s views on Monopoly have influenced the marginalists authors. It is argued that there are two different points of view in the cournotian evaluation of the consequence of Monopoly. The first one is a purely theoretical construction adopted in modern economic theory. Even if it is a theoretical one it has normative consequence. From these it is derived a negative appreciation on Monopoly. The second is a more pragmatic point of view. Whereas the former is purely theoretical the latter is derived from multiple examples and it cannot be based on the same theoretical framework as the well known theory of monopoly prices. From this pragmatic point of view, Cournot constructs some "positive" appreciations on the existence of monopolies. These two different appreciations on imperfect markets have influenced in different ways the works of the authors of the Marginal Revolution. Following this distinction we study the different points of view of Walras, Edgeworth and Marshall on Monopoly. We show that even if Walras‟s theory of Monopoly does not have the same theoretical foundations of Cournot‟s, his normative point of view on monopolies is closely related with the "purely theoretical" conclusions. Walras frequently quoted Cournot on these matters. Edgeworth and Marshall have a different point of view on Monopoly, mainly pragmatic and sometimes quite positive from the normative point of view. However Walras‟s as well as Edgeworth‟s and Marshall‟s theories on monopoly are not based on their theories of perfect competition. We conclude that the marginlists views on imperfect competition are not constructed as a "perturbation" or a "friction" of a perfectly competitive market.

Suggested Citation

  • Andrés Álvarez, 2009. "Early Neoclassical Views on Monopoly: The Cournotian Heritage," DOCUMENTOS DE TRABAJO - ESCUELA DE ECONOMÍA 006161, UN - RCE - CID.
  • Handle: RePEc:col:000178:006161
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    References listed on IDEAS

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    1. Rodolphe Dos Santos Ferreira, 2004. "Guerre et paix. Variations sur la notion de concurrence au siècle de Cournot," Revue économique, Presses de Sciences-Po, vol. 55(3), pages 543-556.
    2. Xavier Greffe & Jérome Lallement & Michel De Vroey, 2002. "Dictionnaire des grandes oeuvres économiques," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00272064, HAL.
    3. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    4. Edgeworth, Francis Ysidro, 1881. "Mathematical Psychics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number edgeworth1881.
    5. James W. Friedman, 2000. "The legacy of Augustin Cournot," Cahiers d'Économie Politique, Programme National Persée, vol. 37(1), pages 31-46.
    6. Carlo Benetti, 1997. "El método normativo de la teoría económica positiva (Traducción de José Félix Cataño)," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, June.
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    Keywords

    Monopolio; A. Cournot; L. Walras; F. Y. Edgeworth; W. S. Jevons; Marginalistas.;

    JEL classification:

    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly

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