A Rational Theory of Producer’s Equilibrium in Fifteen Principles

Jael, Paul (2020): A Rational Theory of Producer’s Equilibrium in Fifteen Principles.

Abstract

The marginalist theory of producer’s equilibrium has been a cornerstone of mainstream economics for a long time. This theory has been challenged more than once in the twentieth century, without losing its predominance. A lot of critics and many ideas have been ventured. My conclusion is that there is room and there is a need for alternative microeconomics. Approaching heterodox microeconomics may seem entering a labyrinth. For this reason, I propose a presentation of my conception about producer’s equilibrium in a structured and concise way: fifteen principles in a logical and instructive order. The principles are founded on a hypothesis shared by neoclassical economics: rationality of agents. Each behaviour must be compatible with the pursuit of self-interest.

• Item Type: MPRA Paper
• Language: English
• Keywords: market structure; competition; pricing
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General

References

Andrews, P.W.S. 1959. Manufacturing Business. Macmillan London.

Bain, Joe S. 1950. “A Note on Pricing in Monopoly and Oligopoly”. American Economic Review, vol 39: 448-464.

Bhagwati Jagdish N. 1970. “Oligopoly Theory, Entry Prevention, and Growth”. Oxford Economic Papers, Vol. 22 n°3 (nov), 297-310

Baumol, William J. 1958. “On the Theory of Oligopoly”. Economica 24 (99): 187-198.

Baumol, William J. 1982. “Contestable Markets: An Uprising in the Theory of Industry Structure”. American Economic Review. 72 (1): 1-15.

Blinder Alan S. (1994) “On Sticky Prices: Academic Theories Meet the Real World”. Monetary Policy, Gregory Mankiw (éd), The University of Chicago Press: 117-154.

Bertrand, J. 1883. “Théorie des richesses”. Journal des savants (septembre) : 499-508.

Chamberlin, Edward Hastings. 1962. The Theory of Monopolistic Competition. Harvard University Press, Cambridge Massachussetts.

Cournot, A.A. 1980. Œuvres complètes. Tome VIII Recherches sur les principes mathématiques de la Théorie des richesses. Librairie philosophique J.Vrin Paris.

Edgeworth, Francis. 1993. Papers relating to Political Economy. Volume 1, Thoemmes Press Bristol.

Edwards, H. R. 1955. “Price Formation in Manufacturing Industry and Excess Capacity”. Oxford Economic Papers 7 (1) dec : 94-118.

Eiteman, Wilford J. 1947. “Factors Determining the Location of the Least Cost Point”. American Economic Review. 37 (December): 910-918.

Eiteman, Wilford, and Glenn E. Guthrie. 1952. “The Shape of the Average Cost Curve”. Amercican Economic Review. 42 (December): 832-838.

Farm, Ante. 2014. “Competitive Price Leadership”. www2.sofi.su.se/ -afa/docs/Competitive_Price_Leadership.pdf

Godley, W.A.H, and W.D. Nordhaus. 1972. “Pricing in the Trade Cycle”. The Economic Journal, vol 82 September: 853-882.

Hall, R.L., and C.J. Hitch. 1939. “Price Theory and Business Behaviour”. Oxford Economic Papers 2 (May): 12-45.

Harrod, R.F. 1952. Economic Essays. Harcourt, Brace and cie, New York

Heflebower, Richard B. 1955. “Full Costs, Cost Changes, and Prices” in Business Concentration and Price Policy. Princeton University Press.

Hall Robert E. (1986) “Market Structure and Macroeconomic Fluctuations”. Brookings Papers on Economic Activity, n°2: 285-338.

Jael, Paul (2014) “Full Cost, Price and Competition” MPRA. www.mpra.ub.uni-muenchen.de/59630/

Jael, Paul (2015) “Price, Target Rate of Profit and Entry Prevention” MPRA. www.mpra.ub.uni-muenchen.de/65970

Keen Steve. (2011), L’imposture économique. Editions de l’atelier, Ivry sur Seine, 2014

Lanzillotti, Robert F. 1957. “Competitive Price Leadership- A Critique of Price Leadership Models”. The Review of Economics and Statistics”, vol. 34, 55-64

Lanzillotti, Robert F. 1958. “Pricing Objectives in Large Companies”. American Economic Review 18 (5) December: 921-940.

Lee, F.S. 1999. Post Keynesian Price Theory. Cambridge University Press (Virtual Publishing). Cambridge

Lucas Robert E. Jr (1977) “Understanding Business Cycles”. Carnegie-Rochester Conference Series on Public Policy, vol 5:. 7-29.

Machin, Stephen, and John Van Reenen.1993. “Profit Margins and the Business Cycle: Evidence from UK Manufacturing Firms”. The Journal of Industrial Economics 41 (1): 29-50

Modigliani, Franco. 1958. “New Developments on the Oligopoly Front”. Journal of Political Economy, 66(3) June, 215-232

Nubbemeyer, Elmar. 2010, A Reconsideration of Full-Cost Pricing. www.edoc.ub.uni-muenchen.de/12313/2/nubbemeyer_Elmar.pdf.

Ray, Korok, and Jacob Gramlich. 2012. Full-Cost Pricing and Economic Pricing: Reconciling Two Approaches. www.korokray.files.wordpress.com/2012/11/fcpep.pdf

Robinson, Joan. 1946. The Economics of Imperfect Competition. Macmillan and co, London.

Rotemberg, Julio J, and Michael Woodford. 1999. “The Cyclical Behavior of Prices and Costs”. NBER Working Paper Series. Working paper 6909. www.nber.org/papers/w6909

Rotemberg, Julio J. 1982. “Sticky Prices in the United States”. The Journal of Political Economy 90 (6): 1187-1211.

Simon, Herbert A. 1978. “Rational Decision-Making in Business Organizations”. Nobel Prize in Economics Documents 1978-1.

Spiegel, Yossi, and Konrad Stahl. 2014. Industry Structure and Pricing over the Business Cycle. www.tau.ac.il/spiegel/papers/Spiegel-stahl-CRESSE.pdf

Sraffa, Piero. 1925. On the Relations Between Cost and Quantity Produced. Ed Langer & Lee Chicago Illinois.

Stigler, Georges J. 1957. “Perfect Competition, Historically Complated”. Journal of Political Economy. 65 : 1-17

Sylos-Labini. 1962. Oligopoly and Technical Progress. Harvard University Press, Cambridge Massachussets

Sylos-Labini, Paolo. 1971. « La théorie des prix en régime d’oligopole et la théorie du développement ». Revue d’économie politique. 81 (2) : 244-272.

Sylos-Labini, Paolo. 2007. “Oligopoly: Static and Dynamic Analysis”. Revue d’économie Industrielle, 118 (2e trimestre): 91-107.

Viner, Jacob. 1932. “Cost Curves and Supply Curves”. Zeitschrift für Nationalökonomie, bd III Hft 1 Sonderabdruck, 23-46.

Wicksell, Knut. 1934. Lectures on Political Economy. Volume One: General Theory. Routledge & Kegan London