The Origin of the Sylos Postulate: Modigliani's and Sylos Labini's Contributions to Oligopoly Theory
Paolo Sylos Labini's Oligopoly Theory and Technical Progress (1957) is considered one of the major contributions to entry-prevention models, especially after Franco Modigliani's famous formalization. Nonetheless, Modigliani neglected Labini's major aim when reviewing his work (JPE, 1958), particularly his demonstration of the dynamic relation between industrial concentration and economic development. Modigliani addressed only Sylos' microeconomic analysis and the determination of the long-run equilibrium price and output, concentrating on the role played by firms' anticipations. By doing so he shifted attention from Sylos' objective analysis to a subjective approach to oligopoly problem. This paper discusses Sylos' and Modigliani's differing approaches, derives the origin of the Sylos postulate and sets Modigliani's interpretation of Sylos' oligopoly theory in the context of his 1950s research into firms' behaviour under uncertainty.
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- Pyatt, F Graham, 1971. "Profit Maximisation and the Threat of New Entry," Economic Journal, Royal Economic Society, vol. 81(322), pages 242-55, June.
- Osborne, D K, 1973. "On the Rationality of Limit Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 22(1), pages 71-80, September.
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- George J. Stigler, 1947. "The Kinky Oligopoly Demand Curve and Rigid Prices," Journal of Political Economy, University of Chicago Press, vol. 55, pages 432.
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- Franco Modigliani, 1959. "New Developments on the Oligopoly Front: Reply," Journal of Political Economy, University of Chicago Press, vol. 67, pages 418.
- Franklin M. Fisher, 1959. "New Developments on the Oligopoly Front: Cournot and the Bain-Sylos Analysis," Journal of Political Economy, University of Chicago Press, vol. 67, pages 410.
- Franco Modigliani, 1958. "New Developments on the Oligopoly Front," Journal of Political Economy, University of Chicago Press, vol. 66, pages 215.
- Donald E. Farrar & Charles F. Phillips & Jr., 1959. "New Developments on the Oligopoly Front: A Comment," Journal of Political Economy, University of Chicago Press, vol. 67, pages 414.
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