Monday, April 27, 2009
The Institutionalists’ Reaction to Chamberlin’s Theory of Monopolistic Competition
Posted by D. Daniel Sokol
Luca Fiorito (University of Palermo - Politics) discusses The Institutionalists’ Reaction to Chamberlin’s Theory of Monopolistic Competition.
ABSTRACT: Edwin Chamberlin's The Theory of Monopolistic Competition is often described as containing omportant traces of institutionalist influence. This is also confirmed by Chamberlin himself who, repeadetly, referred to the work of Veblen, and John Maurice Clark among his inspirational sources. The aim of this paper is to analyse the institutionalist reaction to the publication of the Theory of Monopolistic Competition. What will be argued is that the institutionalist response to Chamberlin was a mixed one, and involved some substantial criticisms of his analysis of market structures both on methodological and theoretical grounds. The paper is organized as follows. The first section presents a sketch of the main theoretical implications contained in The Theory of Monopolistic Competition. The second section analyses the general aspects of the institutionalist reaction to Chamberlin. The third and fourth sections deal with the more theoretical aspects of the institutionalist criticism of Chamberlin. The final section presents a conclusion.