The classical notion of competition revisited
The paper seeks to fill a lacuna within Classical economics concerning the process of market price determination in a short-period equilibrium. To this aim, first we distinguish the Classical notion of free competition from the Walrasian notion of perfect competition and we argue that the latter is beset by some theoretical difficulties alien to the former. Second, we reconstruct in some detail Smith and Marx’s views concerning market price determination and we show that Marx’s extensive use of metaphors and numerical examples foreshadows the modern taxonomy of buyers’ market, sellers’ market and mixed strategy equilibrium in the capacity space of a standard Bertrand duopoly model. Finally, we highlight similarities and differences between the Classical notion of competition and contemporary game-theoretic oligopoly models
|Date of creation:||17 May 2010|
|Date of revision:||17 May 2010|
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9802, Exeter University, Department of Economics.
- Mark Blaug, 1999. "Misunderstanding Classical Economics: The Sraffian Interpretation of the Surplus Approach," History of Political Economy, Duke University Press, vol. 31(2), pages 213-236, Summer.
- repec:cup:cbooks:9780521443258 is not listed on IDEAS
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- Heinz Kurz & Neri Salvadori, 2000. "'Classical' Roots of Input-Output Analysis: A Short Account of its Long Prehistory," Economic Systems Research, Taylor & Francis Journals, vol. 12(2), pages 153-179.
- Clarence Morrison, 1998. "Cournot, bertrand, and modern game theory," Atlantic Economic Journal, International Atlantic Economic Society, vol. 26(2), pages 172-174, June.
- Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-55, December.
- Nicola GIOCOLI, 2005. "Modeling Rational Agents The Consistency View Of Rationality And The Changing Image Of Neoclassical Economics," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 49, pages 177-208.
- Clarence C. Morrison, 2001. "Magnan de Bornier on Cournot-Bertrand," History of Political Economy, Duke University Press, vol. 33(1), pages 161-165, Spring.
- Heinz D. Kurz & Neri Salvadori, 2002. "Mark Blaug on the “Sraffian Interpretation of the Surplus Approach”," History of Political Economy, Duke University Press, vol. 34(1), pages 225-236, Spring.
- Samuelson, Paul A, 1978. "The Canonical Classical Model of Political Economy," Journal of Economic Literature, American Economic Association, vol. 16(4), pages 1415-34, December.
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