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Changing Objectives of Firms and Managerial Preferences: A Review of Models in Microeconomics

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  • Kumar B, Pradeep

Abstract

Theoretically, producer behavior models postulate that firms have had different objectives ranging from profit maximization to setting aspirational levels. The assumption of objective of profit maximization was shaped on the basis of the rationality principles which has lost relevance with the coming of the principle of behavioral economic in recent time. The present paper intends to throw some light on changes that have been made in the objective of firms over years and attempts to review some models emphasizing managerial utility as the core objective of firms.

Suggested Citation

  • Kumar B, Pradeep, 2021. "Changing Objectives of Firms and Managerial Preferences: A Review of Models in Microeconomics," MPRA Paper 106967, University Library of Munich, Germany, revised 13 Mar 2021.
    • Handle: RePEc:pra:mprapa:106967
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    File URL: https://mpra.ub.uni-muenchen.de/106967/1/MPRA_paper_106967.pdf
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    References listed on IDEAS

    as
    1. Robin Marris, 1963. "A Model of the "Managerial" Enterprise," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 77(2), pages 185-209.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Profit Maximization; Sales Maximization; Managerial Utility Function; Managerial Discretionary Powers; Slacks and Salaries; Behavioral Economics;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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