IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/26783.html
   My bibliography  Save this paper

Towards an observational economics of business behaviour: the horizontal supply curve, 'fuzzy' demand and other anomalies for conventional theory

Author

Listed:
  • Ross, Bruce W.

Abstract

This paper proposes the development of an 'observational economics' whose domain would be restricted to what is observable in the real world. Observational economics should be regarded as a separate but complementary undertaking to mainstream economics. Adoption of such an approach would enhance the reestablishment and development of interaction between economists and the business community. Phenomena such as price setting, unpredictable and variable demand, and inventories and order backlogs are argued to be anomalous from the viewpoint of conventional microeconomics, but fundamental to an observational perspective on business behaviour. A basic observational model of price and output determination for the price setting manufacturing firm is outlined.

Suggested Citation

  • Ross, Bruce W., 1996. "Towards an observational economics of business behaviour: the horizontal supply curve, 'fuzzy' demand and other anomalies for conventional theory," MPRA Paper 26783, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26783
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/26783/1/MPRA_paper_26783.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richard B. Heflebower, 1955. "Full Costs, Cost Changes, and Prices," NBER Chapters, in: Business Concentration and Price Policy, pages 361-396, National Bureau of Economic Research, Inc.
    2. Cyert, Richard M & Hedrick, Charles L, 1972. "Theory of the Firm: Past, Present, and Future; An Interpretation," Journal of Economic Literature, American Economic Association, vol. 10(2), pages 398-412, June.
    3. Carlton, Dennis W, 1978. "Market Behavior with Demand Uncertainty and Price Inflexibility," American Economic Review, American Economic Association, vol. 68(4), pages 571-587, September.
    4. Machlup, Fritz, 1978. "Methodology of Economics and Other Social Sciences," Elsevier Monographs, Elsevier, edition 1, number 9780124645509 edited by Shell, Karl.
    5. R. L. Hall & C. J. Hitch, 1939. "Price Theory And Business Behaviour," Oxford Economic Papers, Oxford University Press, vol. 0(1), pages 12-45.
    6. Edwin S. Mills, 1959. "Uncertainty and Price Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 73(1), pages 116-130.
    7. Mueller, Dennis C., 1992. "The corporation and the economist," International Journal of Industrial Organization, Elsevier, vol. 10(2), pages 147-170, June.
    8. Victor Zarnowitz, 1962. "Unfilled Orders, Price Changes, and Business Fluctuations," NBER Books, National Bureau of Economic Research, Inc, number zarn62-1.
    9. Eichner, Alfred S & Kregel, J A, 1975. "An Essay on Post-Keynesian Theory: A New Paradigm in Economics," Journal of Economic Literature, American Economic Association, vol. 13(4), pages 1293-1314, December.
    10. Alfred S. Eichner, 1983. "Why Economics Is Not Yet a Science," Journal of Economic Issues, Taylor & Francis Journals, vol. 17(2), pages 507-520, June.
    11. Dennis Mueller, 1994. "Business and Industrial Organization Research: Synergy or Shotgun Marriage?," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(1), pages 27-30.
    12. P. W. S. Andrews, 1949. "A Reconsideration Of The Theory Of The Individual Business," Oxford Economic Papers, Oxford University Press, vol. 1(1), pages 54-89.
    13. Romney Robinson, 1961. "The Economics of Disequilibrium Price," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 75(2), pages 199-233.
    Full references (including those not matched with items on IDEAS)

    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. Gordon, Robert J, 1981. "Output Fluctuations and Gradual Price Adjustment," Journal of Economic Literature, American Economic Association, vol. 19(2), pages 493-530, June.
    2. Nitzan, Jonathan, 1992. "Inflation As Restructuring. A Theoretical and Empirical Account of the U.S. Experience," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 157989, September.
    3. Bils, Mark & Chang, Yongsung, 2000. "Understanding how price responds to costs and production," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 33-77, June.
    4. Olkhov, Victor, 2020. "Volatility Depend on Market Trades and Macro Theory," MPRA Paper 102434, University Library of Munich, Germany.
    5. Pindyck, Robert S., 1980. "Adjustment cost, demand uncertainty, and the behavior of the firm," Working papers 1112-80A., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    6. Nitzan, Jonathan, 1990. "Price Behaviour and Business Behaviour," EconStor Preprints 157851, ZBW - Leibniz Information Centre for Economics.
    7. Kakarot-Handtke, Egmont, 2012. "Why Post Keynesianism is not yet a science," MPRA Paper 43171, University Library of Munich, Germany.
    8. Brendan Markey-Towler, 2016. "Law of the jungle: firm survival and price dynamics in evolutionary markets," Journal of Evolutionary Economics, Springer, vol. 26(3), pages 655-696, July.
    9. Levitt, Steven D., 2016. "Bagels and donuts for sale: A case study in profit maximization," Research in Economics, Elsevier, vol. 70(4), pages 518-535.
    10. Ioana Negru, 2013. "Revisiting the Concept of Schools of Thought in Economics: The Example of the Austrian School," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(4), pages 983-1008, October.
    11. Schulte, Benedikt & Sachs, Anna-Lena, 2020. "The price-setting newsvendor with Poisson demand," European Journal of Operational Research, Elsevier, vol. 283(1), pages 125-137.
    12. David Amirault & Paul Fenton & Thérèse Laflèche, 2013. "Asking About Wages: Results from the Bank of Canada’s Wage Setting Survey of Canadian Companies," Discussion Papers 13-1, Bank of Canada.
    13. Botte, Florian & Dallery, Thomas, 2019. "Analyse systématique du modèle de Bhaduri et Marglin à prix flexibles : « Ça dépend de la valeur des paramètres » [Systematic analysis of the Bhaduri-Marglin Model with flexible prices: « It depend," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 26.
    14. Nalewaik, Jeremy & Pinto, Eugénio, 2015. "The response of capital goods shipments to demand over the business cycle," Journal of Macroeconomics, Elsevier, vol. 43(C), pages 62-80.
    15. Ma, Shouyu & Jemai, Zied & Bai, Qingguo, 2022. "Optimal pricing and ordering decisions for a retailer using multiple discounts," European Journal of Operational Research, Elsevier, vol. 299(3), pages 1177-1192.
    16. Machava, Agostinho, 2017. "The Macroeconomic Determinants of the Pass-Through from the Market Interest Rate to the Bank Lending Rate in Mozambique," Umeå Economic Studies 954, Umeå University, Department of Economics.
    17. Massimo Cingolani, 2015. "Sylos Labini su Marx: implicazioni per la politica economica (Sylos Labini on Marx: economic policy implications)," Moneta e Credito, Economia civile, vol. 68(269), pages 81-147.
    18. Sidney G. Winter, 2017. "Pursuing the evolutionary agenda in economics and management research," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 721-747.
    19. Ernest Liu & Aleh Tsyvinski, 2021. "Dynamical Structure and Spectral Properties of Input-Output Networks," Working Papers 2021-13, Princeton University. Economics Department..
    20. John Finch, 2001. "The role of grounded theory in developing economic theory," Journal of Economic Methodology, Taylor & Francis Journals, vol. 9(2), pages 213-234.

    More about this item

    Keywords

    observational economics; business behaviour; horizontal supply curve; fuzzy demand; inventories; order backlogs;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other

    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:pra:mprapa:26783. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.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.