The Economics of Imperfect Competition and Employment: Joan Robinson and Beyond

823 Pages·1989·74.671 MB·English

by  George R. Feiwel (eds.)

THE ECONOMICS OF IMPERFECT COMPETITION
AND EMPLOYMENT: JOAN ROBINSON AND
BEYOND
Also by George R. Feiwel
*JOAN ROBINSON AND MODERN ECONOMIC THEORY (editor)
(companion volume)
*ARROW AND THE ASCENT OF MODERN ECONOMIC THEORY
(edito~)
*ARROW AND THE FOUNDATIONS OF THE THEORY OF ECONOMIC
POLICY (editor)
*ISSUES IN CONTEMPORARY MICROECONOMICS AND WELFARE
(editor)
*ISSUES IN CONTEMPORARY MACROECONOMICS AND
DISTRIBUTION (editor)
SAMUELSON AND NEOCLASSICAL ECONOMICS (editor)
THE INTELLECTUAL CAPITAL OF MICHAL KALECKI
GROWTH AND REFORMS IN CENTRALLY PLANNED ECONOMIES
THE SOVIET QUEST FOR ECONOMIC EFFICIENCY
INDUSTRIALIZATION AND PLANNING UNDER POLISH SOCIALISM
(2 volumes)
NEW ECONOMIC PATTERNS IN CZECHOSLOVAKIA
THE ECONOMICS OF A SOCIALIST ENTERPRISE
*A lso published by Palg rave Macmillan
JOAN ROBINSON
From the Ramsey and Muspratt Collection. © Peter Lofts: Anglia Supercolor Studios.
The Economics of
Imperfect Competition
and Employment
Joan Robinson and Beyond
Edited by
George R. Feiwel
Alumni Distinguished Service Professor and Professor of Economics,
University of Tennessee
M
MACMILLAN
PRESS
© George R. Feiwel 1989
Softcover reprint of the hardcover 1st edition 1989 978-0-333-41304-3
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First published 1989
Published by
THE MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 2XS
and London
Companies and representatives
throughout the world
Typeset by Latimer Trend & Company Ltd, Plymouth
British Library Cataloguing in Publication Data
The Economics of imperfect competition and
employment: Joan Robinson and beyond.
1. Economics
I. Feiwel, George R.
330.1 HB171
ISBN 978-1-349-08632-0 ISBN 978-1-349-08630-6 (eBook)
DOI 10.1007/978-1-349-08630-6
Contents
Notes on the Contributors xii
Preface xxv
Acknowledgments lix
PART I: TWO REVOLUTIONS COMBINED:
IMPERFECT COMPETITION AND
MACROECONOMICS
1 Towards an Integration of Imperfect Competition and
Macrodynamics: Kalecki, Keynes, Joan Robinson 3
John Roberts
1 Introduction 3
2 Kalecki and Cambridge 7
3 Kalecki and Keynes: characters and economists 13
4 The intellectual roots of Kalecki and Keynes 22
5 Microfoundations for macrodistribution 31
6 Distributive shares and effective demand 52
7 General Theory and economic dynamics 69
8 Kalecki's model and the General Theory 90
9 The economics and politics of full employment 100
Appendix 115
2 Involuntary Unemployment and Imperfect Competition:
A Game-theoretic Macromodel 146
John Roberts
1 Overview 148
2 Imperfectly competitive unemployment equilibrium 150
3 Continuous perceived quantities 156
4 Relationship to fix-price equilibria 159
5 Extensions, discussion, and policy implications 161
6 Conclusion 163
PART II: IMPERFECT COMPETITION: RETROSPECTS
AND PROSPECTS
3 The Cambridge Background to Imperfect Competition 169
John K. Whitaker
1 Some background 170
VI Contents
2 Marshall and Pigou on the theory of competitive
supply 172
3 Marshall, Pigou and the theory of monopoly 179
4 Sraffa's challenge 184
5 The economics of Imperfect Competition in relation to
its Cambridge background 186
6 Concluding comments 188
4 Imperfect Competition After Fifty Years 197
Robert L. Bishop
5 Competition and tbe Number of Participants: Lessons of
Edgeworth's Theorem 212
Takashi Negishi
6 Is Imperfect Competition Empirically Empty? 225
John Sutton
I Archibald versus Chicago 225
2 Putting more structure in: an illustration 227
3 Is it empty? 230
4 Problems and perspectives 231
5 Failing the test 234
6 Summary and conclusion 236
PART III: IMPERFECT COMPETITION:
GAME-THEORETIC APPROACH
7 Competitive Equilibrium in a Market with Decentralized
Trade and Strategic Behavior: An Introduction 243
Ariel Rubinstein
1 Introduction 243
2 Two basic stationary models 246
3 Analysis of the two models 249
4 Market entry 251
5 Simultaneous bargaining and matching 253
6 The anonymity assumption 255
7 Towards an alternative market set-up 256
8 Conclusion 257
8 Entry and Exit 260
Robert Wilson
1 Introduction 260
2 Predation 261
3 Exit and attrition 269
Contents
Vll
4 Limit pricing 284
5 Price wars 289
6 Commitment and sunk costs 292
7 Cooperative behavior 299
8 Conclusion 301
9 Bibliography 302
9 Effects of Entry on Profits under Monopolistic
Competition 305
Leonid Hurwicz
1 Introduction 305
2 The model and some results 306
3 Monopoly 315
4 Oligopoly 322
10 An Essay on Price Discrimination 365
Paul Milgrom
1 Introduction 365
2 Discrimination and countervailing buyer power 368
3 Segmenting a market using self-selection 373
4 Conclusion 381
Mathematical appendix 382
11 Competitive Discriminatory Pricing 387
Jean J. Gabszewicz and Jacques-Franfois Thisse
I Introduction 387
2 The equilibrium price schedules 390
3 Quality competition and discriminatory pricing 395
4 Price and product competition under uniform pricing 398
5 Product competition and the Pareto-optimal quality
profile 400
6 Conclusion 402
Appendix 403
PART IV: IMPERFECT COMPETITION: DIFFERENT
APPROACHES
12 Two Applications of Characteristics Theory 409
G. C. Archibald and B. Curtis Eaton
1 Introduction 409
2 The characteristics approach to monopolistic
competition 411
3 The characteristics approach to location theory 427
4 Conclusion 433
Contents
Vlll
13 Price-Quality Competition in Oligopolistic Interdependence 437
Robert E. Kuenne
1 Introduction 437
2 An initial framework for product differentiation
analysis 440
3 The firm's decision in an assumed non-reactive
context 444
4 The firm in a rivalrous context 448
5 The firm in rivalrous consonance 453
6 Conclusion 459
14 Who Benefits from Unemployment? 462
Joaquim Silvestre
1 Introduction 462
2 The model 464
3 Individual consumption and welfare 466
4 Keynesian unemployment 469
5 Classical unemployment 469
Appendix 473
PART V: IMPERFECT COMPETITION: CAPITAL AND
CREDIT MARKETS
15 Monopolistic Competition and the Capital Market 485
Joseph E. Stiglitz
1 Introduction 485
2 The model 489
3 The market solution 492
4 Competitive versus optimal size of risky industry 493
5 Correlated returns: the competitive analysis 495
6 Increasing marginal entrance costs 499
7 Reinterpretation in partial equilibrium terms 499
8 Concluding comments 502
16 Competition, Non-linear Pricing and Rationing in Credit
Markets 508
Mordecai Kurz
1 The model 509
2 Equilibrium 523
3 Public policy 531
PART VI: KEYNES IS 'ALIVE' AND 'WELL'
17 Testimony I: An Interview 537
Robert M. Solow