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Price versus quality competition: in search for Schumpeterian evolution mechanisms

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  • Agnieszka Lipieta

    (Cracow University of Economics)

  • Andrzej Malawski

    (Cracow University of Economics)

Abstract

The paper extends the research program of modeling the Schumpeterian vision of innovative development in the Arrow-Debreu theory of general equilibrium. The core of this set-up is based on modeling the two fundamental forms of economic life distinguished by Schumpeter, namely the circular flow and economic development by specific extensions of the production system being part of the Debreu private ownership economy, so that the analysis includes static as well as dynamic forms. In this context the paper aims at studying the mechanisms of Schumpeterian evolution in the conceptual apparatus of the Hurwicz’s theory of economic mechanisms. To this purpose two kinds of mechanisms of Schumpeterian innovative evolution are studied. First, price mechanisms which include prices as an element of the message space, and second, qualitative mechanisms which, in addition, guarantee that the position of a group of agents will get better off with respect to the given criterion.

Suggested Citation

  • Agnieszka Lipieta & Andrzej Malawski, 2016. "Price versus quality competition: in search for Schumpeterian evolution mechanisms," Journal of Evolutionary Economics, Springer, vol. 26(5), pages 1137-1171, December.
    • Handle: RePEc:spr:joevec:v:26:y:2016:i:5:d:10.1007_s00191-016-0470-8
    DOI: 10.1007/s00191-016-0470-8
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    Cited by:

    1. Agnieszka Lipieta, 2018. "Adjustment processes resulting in equilibrium in the private ownership economy," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 10(4), pages 305-332, December.
    2. Lipieta Agnieszka, 2018. "The role of imitative mechanisms within the economic evolution," Economics and Business Review, Sciendo, vol. 4(4), pages 64-82, November.
    3. Agnieszka Lipieta & Ilona Ćwięczek, 2022. "Mechanisms leading to equilibrium in economy with financial market," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4166-4182, October.
    4. Marta Kornafel, 2022. "Can Producers’ Price War End Up in an Optimal Allocation?," Mathematics, MDPI, vol. 10(2), pages 1-6, January.
    5. Beata Ciałowicz & Andrzej Malawski, 2017. "Innovativeness of Banks as a Driver of Social Welfare," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 9(2), pages 97-113, June.

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    More about this item

    Keywords

    Schumpeterian evolution; Mechanism; Designing mechanism; Debreu economy;
    All these keywords.

    JEL classification:

    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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