Salvadori, Neri and Signorino, Rodolfo (2010): The classical notion of competition revisited.
This is the latest version of this item.
Download (547kB) | Preview
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 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 Bertrand competition models.
|Item Type:||MPRA Paper|
|Original Title:||The classical notion of competition revisited|
|English Title:||The classical notion of competition revisited|
|Keywords:||Classical and Neoclassical notions of competition, Adam Smith, Karl Marx, mixed strategies, Bertrand competition.|
|Subjects:||B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith)
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms
|Depositing User:||Neri Salvadori|
|Date Deposited:||22. Aug 2010 23:42|
|Last Modified:||24. May 2015 17:07|
Arena, R. (1978). Note sulla concezione classica della concorrenza. Economia e Lavoro, No. 2, pp. 323 − 352.
Arrow, K.J. (1959). Toward a theory of price adjustment, in M. Abramovitz (ed.), The Allocation of Economic Resources, Stanford: Stanford University Press, pp. 41 – 51.
Arrow, K.J. and F.H. Hahn (1971). General Competitive Analysis. San Francisco: Holden Day.
Aspromourgos, T. (2009). The Science of Wealth. Adam Smith and the framing of political economy. London: Routledge.
Baye, M.R. and D. Kovenock (2008). Bertrand Competition. The New Palgrave Dictionary of Economics, London: Macmillan.
Bellino, E. (2010). Gravitation of Market Prices towards Natural Prices. In R. Ciccone, C. Gehrke and G. Mongiovi (eds.). Sraffa and Modern Economics, London and New York: Routledge, forthcoming.
Bharadwaj, K. (1978). Classical Political Economy and the Rise to Dominance of Supply and Demand Theories. New Delhi: Orient Longmans.
Blaug, M. (1997). Competition as an end-state and competition as a process. In M. Blaug (1997). Not Only An Economist. Recent Essays by Mark Blaug. Cheltenham: Edward Elgar, chapter 6.
Blaug, M. (1999). Misunderstanding Classical Economics: The Sraffian Interpretation of the Surplus Approach. History of Political Economy, vol. 31, pp. 213 – 236.
Blaug, M. (2002). Ugly Currents in Modern Economics. In U. Mäki (ed) (2002). Fact and Fiction in Economics. Models, Realism and Social Construction. Cambridge: Cambridge University Press, chapter 2.
Blaug, M. (2003). The formalist revolution of the 1950’s. Journal of the History of Economic Thought, vol. 25, pp. 145 – 156.
Blaug, Mark. 2009. The Trade-Off between Rigor and Relevance: Sraffian Economics as a Case in Point. History of Political Economy, vol. 41, pp. 219-247.
Ciccone, R. (1999). Classical and Neoclassical Short-Run Prices. A comparative analysis of their intended empirical content. In G. Mongiovi and F. Petri (eds) (1999). Value, Distribution and Capital. Essays in honour of Pierangelo Garegnani. London: Routledge, pp. 69 − 92.
Dardi, M. (1983). Piero Sraffa (1898-1983). Quaderni di Storia dell’Economia Politica, vol. 3, pp. 3 – 14.
De Francesco, M. A. and N. Salvadori (2010). Bertrand-Edgeworth games under oligopoly with a complete characterization for the triopoly. http://mpra.ub.uni-muenchen.de/18766/
Dimand, R. W. and Mohammed H.I. Dore (1999). Cournot, Bertrand, and Game Theory: A Further Note. Atlantic Economic Journal, vol. 27, pp. 325 − 333.
Donzelli, F. (1990). The Concept of Equilibrium in Neoclassical Economic Theory. An Inquiry into the Evolution of General Competitive Analysis from Walras to the “Neo-Walrasian Research Programme”. Ph.D. Dissertation, University of Cambridge (UK).
Duménil, G. and D. Lévy (1987). The dynamics of competition: a restoration of Classical analysis. Cambridge Journal of Economics, vol. 11, pp. 133 – 164.
Eatwell, J. (1987). Competition, Classical. The New Palgrave Dictionary of Economics. London: Macmillan.
Edgeworth, F.Y. (1897). La Teoria pura del Monopolio, Giornale degli Economisti, vol. 40, pp. 13 – 31.
Edgeworth, F. Y. (1925). The Pure Theory of Monopoly. In Papers Relating to Political Economy, vol. 1, pp. 111 – 142, London: Macmillan.
Garegnani, P. (1983). The Classical Theory of Wages and the Role of Demand Schedules in the Determination of Relative Prices. The American Economic Review, vol. 73, pp. 309 – 313.
Garegnani, P. (1984). Value and Distribution in the Classical Economists and Marx. Oxford Economic Papers, vol. 36, pp. 291 – 325.
Giocoli, N. (2003). Modeling Rational Agents. From Interwar Economics to Early Modern Game Theory. Cheltenham: Edward Elgar.
Giocoli, N. (2005). Modeling rational agents: the consistency view of rationality and the changing image of neoclassical economics. Cahiers d’économie politique, no. 49, pp. 177 – 208.
Green, J. (1974). The Stability of Edgeworth’s Recontracting Process. Econometrica, vol. 42, pp. 21 – 34.
High, J. (2001). Introduction. Split Personality: A Brief History of Competition in Economic Theory. In High, J. (ed) (2001). Competition. Critical Ideas in Economics. Cheltenham, UK and Northampton, MA, USA: Edward Elgar.
Hollander, S. (1973). The Economics of Adam Smith. Toronto: University of Toronto Press and London: Heinemann.
Kaldor, N. (1972). The Irrelevance of Equilibrium Economics. The Economic Journal, vol. 82, pp. 1237 – 1255.
Kurz, H.D. and N. Salvadori (1993). Von Neumann’s growth model and the ‘Classical’ tradition. The European Journal of the History of Economic Thought, vol. 1, pp. 129 – 160.
Kurz, H.D. and N. Salvadori (1995). Theory of Production. A Long-period Analysis. Cambridge: Cambridge University Press.
Kurz, H.D. and N. Salvadori (1998). ‘Endogenous’ Growth Models and the ‘Classical’ Tradition. Chapter 4 of Understanding ‘Classical’ Economics. Studies in Long-Period Theory. London and New York: Routledge.
Kurz, H.D. and Neri Salvadori (2000). ‘Classical’ roots of input-output analysis: a short account of its long prehistory. Economic Systems Research, vol. 12, pp. 153 – 179.
Kurz, H.D. and N. Salvadori (2002). Mark Blaug on the “Sraffian Interpretation of the Surplus Approach”. History of Political Economy, vol. 34, pp. 225 – 236.
Kurz, H.D. and N. Salvadori (2010). In Favor of Rigor and Relevance. A Reply to Mark Blaug http://mpra.ub.uni-muenchen.de/20530/.
Lavezzi, A. (2003). Smith, Marshall and Young on division of labour and economic growth. The European Journal of the History of Economic Thought, vol. 10, pp. 81 – 108.
Machovec, F.M. (1995). Perfect Competition and the Transformation of Economics. London and New York: Routledge.
Magnan de Bornier, J. (1992). The “Cournot-Bertrand Debate”: A Historical Perspective. History of Political Economy, vol. 24, pp. 623 – 656.
Magnan de Bornier, J. (2001). Magnan de Bornier on Cournot-Bertrand: A Rejoinder to Clarence Morrison. History of Political Economy, vol. 33, pp. 167 – 174.
Marx, K. ( 1933). Wage-Labour and Capital. New York: International Publishers Co.
Marx, K. (1909). Capital, vol. III, Chicago: Charles H. Kerr & Co. English translation by Ernest Untermann of Das Kapital, vol. III, edited by F. Engels, Hamburg (1894): Meissner. Also available in http://www.econlib.org/library/YPDBooks/Marx/mrxCpC.html. In the text quoted as part number, chapter number, paragraph number.
Mas-Colell, A., M. Whinston and J. Green (1995). Microeconomic Theory. New York: Oxford University Press.
McNulty, P. (1967). A Note on the History of Perfect Competition. The Journal of Political Economy, vol. 75, pp. 395 – 399.
McNulty, P. (1968). Economic Theory and the Meaning of Competition. The Quarterly Journal of Economics, vol. 82, pp. 639 – 656.
Morrison, C. (1998). Cournot, Bertrand and Modern Game Theory. Atlantic Economic Journal, vol. 26, pp. 172 – 174.
Morrison, C. (2001). Magnan de Bornier on Cournot-Bertrand. History of Political Economy, vol. 33, pp. 161 – 165.
Ricardo, D. (1951). The Works and Correspondence of David Ricardo, edited by Piero Sraffa with the collaboration of Maurice Dobb. Cambridge: Cambridge University Press.
Richardson, G.B. (1975). Adam Smith on Competition and Increasing Returns. In A.S. Skinner and T. Wilson (eds) Essays on Adam Smith. Oxford: Oxford University Press.
Roncaglia, A. (1978). Sraffa and the Theory of Prices. Chichester: John Wiley & Sons.
Samuelson, P.A. (1978). The Canonical Classical Model of Political Economy. Journal of Economic Literature, vol. 16, pp. 1415 − 1434.
Semmler, W. (1984). On the Classical and Marxian theories of competition, value and prices of production. Australian Economic Papers, vol. 23, pp. 130 − 150.
Smith, A. (1976). An Inquiry into the Nature and Causes of the Wealth of Nations, 1st edn 1776, Vol. II of The Glasgow Edition of the Works and Correspondence of Adam Smith, edited by R.H. Campbell and A.S. Skinner. Oxford: Oxford University Press. In the text quoted as WN, book number, chapter number, section number, paragraph number.
Sraffa, P. (1960). Production of Commodities by Means of Commodities. A Prelude to a Critique of Economic Theory. Cambridge: Cambridge University Press.
Steedman, I. (1984). Natural prices, differential profit rates and the Classical competitive process. The Manchester School, vol. 52, pp. 123 – 140.
Stigler, G. (1957). Perfect Competition, Historically Contemplated. The Journal of Political Economy, vol. 65, pp. 1 – 17.
Vickers, J. (1995). Concepts of Competition. Oxford Economic Papers, vol. 47, pp. 1 – 23.
Available Versions of this Item
The classical notion of competition revisited. (deposited 19. May 2010 15:43)
- The classical notion of competition revisited. (deposited 22. Aug 2010 23:42) [Currently Displayed]