Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Wednesday, June 9, 2010

The classical notion of competition revisited

Posted by D. Daniel Sokol

Neri Salvadori and Rodolfo Signorino (University of Pisa and University of Palermo, respectively) have a new piece on The classical notion of competition revisited.

ABSTRACT: We compare and analyse two different conceptions of market competition: the walrasian notion of perfect competition and the Classical notion of free competition: while the former may be described as an equilibrium state in which atomistic agents treat prices parametrically, the latter is a situation in which agents, endowed by market power, fix prices strategically. We show that price undercutting or outbidding are the typical phenomena that, for the Classical authors, may be observed in a market characterized by free competition. We investigate some problematic aspects of the neoclassical notion of perfect competition and we reconstruct the Classical theory of free competition, as developed, in particular, by Adam Smith and Karl Marx, in the light of the modern notion of mixed strategies equilibria.

http://lawprofessors.typepad.com/antitrustprof_blog/2010/06/the-classical-notion-of-competition-revisited-.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0134811d9d7d970c

Listed below are links to weblogs that reference The classical notion of competition revisited :

Comments

Post a comment