IDEAS home Printed from https://ideas.repec.org/a/wea/worler/v2015y2015i5p101.html
   My bibliography  Save this article

Rationality in the Theory of the Firm

Author

Listed:
  • Russell K. Standish

    (University of New South Wales, Australia)

  • Stephen L. Keen

    (Kingston University, London)

Abstract

We have previously presented a critique of the standard Marshallian theory of the firm, and developed an alternative formulation that better agreed with the results of simulation. An incorrect mathematical fact was used in our previous presentation. This paper deals with correcting the derivation of the Keen equilibrium, and generalising the result to the asymmetric case. As well, we discuss the notion of rationality employed, and how this plays out in a two player version of the game.

Suggested Citation

  • Russell K. Standish & Stephen L. Keen, 2015. "Rationality in the Theory of the Firm," World Economic Review, World Economics Association, vol. 2015(5), pages 101-101, July.
    • Handle: RePEc:wea:worler:v:2015:y:2015:i:5:p:101
    as

    Download full text from publisher

    File URL: http://wer.worldeconomicsassociation.org/papers/rationality-in-the-theory-of-the-firm/
    Download Restriction: no
    File URL: http://wer.worldeconomicsassociation.org/files/WEA-WER-5-Standish-Keen.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Keen, Steve & Standish, Russell, 2006. "Profit maximization, industry structure, and competition: A critique of neoclassical theory," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 370(1), pages 81-85.
    2. Anglin, Paul, 2008. "On the proper behavior of atoms: A comment on a critique," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(1), pages 277-280.
    3. Russell K. Standish & Steve Keen, 2004. "Emergent Effective Collusion in an Economy of Perfectly Rational Competitors," Papers nlin/0411006, arXiv.org.
    4. 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.
    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. David Rosnick, 2015. "Technical Appendix: A Better Response to Keen-Standish “hill climbers”," World Economic Review, World Economics Association, vol. 2015(5), pages 124-124, July.

    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. David Rosnick, 2015. "Toward an Understanding of Keen and Standish's Theory of the Firm: A Comment," World Economic Review, World Economics Association, vol. 2015(5), pages 107-107, July.
    2. Gerasimos T. Soldatos, 2021. "A model of market competition as a prize contest or a model of strife for market domination," SN Business & Economics, Springer, vol. 1(1), pages 1-9, January.
    3. Agnar Sandmo, 2003. "Environmental Taxation and Revenue for Development," WIDER Working Paper Series DP2003-86, World Institute for Development Economic Research (UNU-WIDER).
    4. Cocioc, Paul, 2014. "Measuring Competition in Romania - Basic Principles and Extensions," MPRA Paper 83552, University Library of Munich, Germany.
    5. Elżbieta Jędrych & Dariusz Klimek & Agnieszka Rzepka, 2021. "Principles of Sustainable Management of Energy Companies: The Case of Poland," Energies, MDPI, vol. 14(8), pages 1-18, April.
    6. Young Bin Kim & Sang Hyeok Lee & Shin Jin Kang & Myung Jin Choi & Jung Lee & Chang Hun Kim, 2015. "Virtual World Currency Value Fluctuation Prediction System Based on User Sentiment Analysis," PLOS ONE, Public Library of Science, vol. 10(8), pages 1-18, August.
    7. Keen, Steve & Standish, Russell, 2006. "Profit maximization, industry structure, and competition: A critique of neoclassical theory," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 370(1), pages 81-85.
    8. Menudo, Jose M., 2011. "Market Stability in Adam Smith: Competitive Process and Institutions," MPRA Paper 15361, University Library of Munich, Germany.
    9. Cellini, Roberto & Lambertini, Luca & Ottaviano, Gianmarco I.P., 2020. "Strategic inattention, delegation and endogenous market structure," European Economic Review, Elsevier, vol. 121(C).
    10. Biais, Bruno & Bisière, Christophe & Spatt, Chester, 2003. "Imperfect Competition in Financial Markets: ISLAND versus NASDAQ," IDEI Working Papers 220, Institut d'Économie Industrielle (IDEI), Toulouse, revised Dec 2006.
    11. Mabid Ali Mohamed Mahmoud Al-Jarhi, 2019. "Islamic Economics: An Agenda for Intellectual and Institutional Reform الاقتصاد الإسلامي: جدول أعمال للإصلاح الفكري والمؤسسي," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 32(2), pages 99-108, January.
    12. M. S. Addleson, 1984. "General Equilibrium and ‘Competition’: On Competition as Strategy," South African Journal of Economics, Economic Society of South Africa, vol. 52(2), pages 104-113, June.
    13. Doan, Tinh & Stevens, Philip, 2012. "Evolution of competition in Vietnam industries over the recent economic transition," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-24.
    14. Russell K. Standish & Steve Keen, 2004. "Emergent Effective Collusion in an Economy of Perfectly Rational Competitors," Papers nlin/0411006, arXiv.org.
    15. Dariusz Klimek & Elżbieta Jędrych, 2020. "A Model for the Sustainable Management of Enterprise Capital," Sustainability, MDPI, vol. 13(1), pages 1-13, December.
    16. 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.
    17. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    18. Neri Salvadori & Rodolfo Signorino, 2013. "The Classical Notion of Competition Revisited," History of Political Economy, Duke University Press, vol. 45(1), pages 149-175, Spring.
    19. Rodolfo Apreda, 2001. "The Brokerage of Asymmetric Information," CEMA Working Papers: Serie Documentos de Trabajo. 190, Universidad del CEMA.
    20. Erhong Wang & Qun Cao & Yongqiang Ding & Huaping Sun, 2022. "Fiscal Decentralization, Government Environmental Preference and Industrial Green Transformation," Sustainability, MDPI, vol. 14(21), pages 1-20, October.

    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:wea:worler:v:2015:y:2015:i:5:p:101. 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: Jake McMurchie (email available below). General contact details of provider: https://edirc.repec.org/data/worecea.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.