IDEAS home Printed from https://ideas.repec.org/a/eej/eeconj/v16y1990i3p197-207.html
   My bibliography  Save this article

Classical and Neoclassical Elements in Industrial Organization

Author

Listed:
  • Mark Glick

    (University of Utah)

  • Eduardo M. Ochoa

    (California State University, Los Angeles)

Abstract

Industrial organization studies of pricing are examined, focusing on the formative debates of 1950-70. It is argued that most of these studies unknowingly adopted a mixture of classical and neoclassical theory, leading to three types of confusions. First, over what measure of profitability is equalized in competitive equilibrium. Second, over what period of time profitability differentials must be studied. Third, over the correct conclusions to be drawn for industry phenomena from firm studies of profitability. The paper concludes by questioning the practicability of a purely neoclassical theoretical grounding for industrial economists, since they abandon this approach in their empirical work.

Suggested Citation

  • Mark Glick & Eduardo M. Ochoa, 1990. "Classical and Neoclassical Elements in Industrial Organization," Eastern Economic Journal, Eastern Economic Association, vol. 16(3), pages 197-207, Jul-Sep.
    • Handle: RePEc:eej:eeconj:v:16:y:1990:i:3:p:197-207
    as

    Download full text from publisher

    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume16/V16N3P197_207.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Qualls, David, 1972. "Concentration, Barriers to Entry, and Long Run Economic Profit Margins," Journal of Industrial Economics, Wiley Blackwell, vol. 20(2), pages 146-158, April.
    2. Shaikh, Anwar, 1978. "Political Economy and Capitalism: Notes on Dobb's Theory of Crisis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 2(2), pages 233-251, June.
    3. Novshek, William & Sonnenschein, Hugo, 1987. "General Equilibrium with Free Entry: A Synthetic Approach to the Theory of Perfect Competition," Journal of Economic Literature, American Economic Association, vol. 25(3), pages 1281-1306, September.
    4. Clifton, James A, 1977. "Competition and the Evolution of the Capitalist Mode of Production," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 1(2), pages 137-151, June.
    5. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(1), pages 11-32.
    6. Mueller,Dennis C., 2009. "Profits in the Long Run," Cambridge Books, Cambridge University Press, number 9780521101592, September.
    7. Hahn, Frank, 1982. "The Neo-Ricardians," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 6(4), pages 353-374, December.
    8. Stephen H. Sosnick, 1958. "A Critique of Concepts of Workable Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(3), pages 380-423.
    9. MacAvoy, Paul W & McKie, James W & Preston, Lee E, 1971. "High and Stable Concentration Levels, Profitability, and Public Policy: A Response," Journal of Law and Economics, University of Chicago Press, vol. 14(2), pages 493-499, October.
    10. G. J. Stigler, 1972. "Perfect Competition, Historically Contemplated," Palgrave Macmillan Books, in: Charles K. Rowley (ed.), Readings in Industrial Economics, chapter 7, pages 105-130, Palgrave Macmillan.
    11. Kirman, Alan P., 2000. "Measure theory with applications to economics," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 1, chapter 5, pages 159-209, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Theodore P. Lianos & Vassilis Droucopoulos, 1993. "Convergence and Hierarchy of Industrial Profit Rates: The Case of Greek Manufacturing," Review of Radical Political Economics, Union for Radical Political Economics, vol. 25(2), pages 67-80, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lefteris Tsoulfidis & Persefoni Tsaliki, 2011. "Classical Competition and Regulating Capital: Theory and Empirical Evidence," Discussion Paper Series 2011_02, Department of Economics, University of Macedonia, revised Feb 2011.
    2. Lefteris Tsoulfidis, 2015. "Contending Conceptions of Competition and the Role of Regulating Capital," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(1), pages 15-31, March.
    3. Ruyun (Ivy) Feng & Michael D. Kimbrough & Sijing Wei, 2022. "The role of information transparency in the product market: an examination of the sustainability of profitability differences," Review of Accounting Studies, Springer, vol. 27(2), pages 668-705, June.
    4. Lefteris Tsoulfidis, 2011. "Classical vs. Neoclassical Conceptions of Competition," Discussion Paper Series 2011_11, Department of Economics, University of Macedonia, revised Nov 2011.
    5. Trofimov, Ivan D., 2018. "Industry rates of return in Korea and alternative theories of competition: equalising convergence versus tendential equalisation," MPRA Paper 88390, University Library of Munich, Germany.
    6. Stefan Hirsch & Adelina Gschwandtner, 2013. "Profit persistence in the food industry: evidence from five European countries," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(5), pages 741-759, December.
    7. Emmanuel Petrakis & Panagiotis Skartados, 2022. "Vertical Opportunism, Bargaining, and Share-Based Agreements," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(4), pages 549-565, June.
    8. André de Waal, 2011. "Strategy Only Matters A Bit: The role of Strategy in the High Performance Organization," Working Papers 2011/02, Maastricht School of Management.
    9. Jonathan M. Lee, 2015. "The Impact of Heterogeneous NOx Regulations on Distributed Electricity Generation in U.S. Manufacturing," Working Papers 15-12, Center for Economic Studies, U.S. Census Bureau.
    10. Jael, Paul, 2019. "Does Marginal Productivity Mean Anything in Real Economic Life ?," MPRA Paper 97968, University Library of Munich, Germany, revised Jan 2020.
    11. Chang, Sungyong & Kim, Hyunseob & Song, Jaeyong & Lee, Keun, 2024. "Dynamics of imitation versus innovation in technological leadership change: Latecomers’ catch-up strategies in diverse technological regimes," Research Policy, Elsevier, vol. 53(9).
    12. Eckhard Hein, 2006. "Money, interest and capital accumulationin Karl Marx's economics: a monetary interpretation and some similaritiesto post-Keynesian approaches," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 13(1), pages 113-140.
    13. Sergio Turner, 2004. "Pareto Improving Taxation in Incomplete Markets," Econometric Society 2004 Latin American Meetings 310, Econometric Society.
    14. Bhardwaj, Chandan & Axsen, Jonn & Kern, Florian & McCollum, David, 2020. "Why have multiple climate policies for light-duty vehicles? Policy mix rationales, interactions and research gaps," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 309-326.
    15. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    16. Kala Krishna & Abhiroop Mukhopadhyay & Cemile Yavas, 2005. "Trade with Labor Market Distortions and Heterogeneous Labor: Why Trade Can Hurt," Contributions to Economics, in: Günter S. Heiduk & Kar-yiu Wong (ed.), WTO and World Trade, pages 65-83, Springer.
    17. Richter, Wolfram F., 2009. "Taxing education in Ramsey's tradition," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1254-1260, December.
    18. Villalonga, Belen, 2004. "Intangible resources, Tobin's q, and sustainability of performance differences," Journal of Economic Behavior & Organization, Elsevier, vol. 54(2), pages 205-230, June.
    19. Dennis Mueller, 1996. "Antimerger policy in the United States: History and lessons," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 23(3), pages 229-253, October.
    20. Hakim Hammadou & Claire Papaix, 2015. "Policy packages for modal shift and CO2 reduction in Lille, France," Working Papers 1501, Chaire Economie du climat.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:16:y:1990:i:3:p:197-207. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Victor Matheson, College of the Holy Cross (email available below). General contact details of provider: https://edirc.repec.org/data/eeaa1ea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.