This paper studies an economy whose agents perceive their consumption possibilities subjectively, and whose preferences are defined on what they subjectively experience, rather than on those alternatives that are objectively present. The model of agents' perceptions is based on intuitionistic logic. Roughly, this means that agents reason constructively: a solution to a problem exists only if there is a construction by which the problem can be solved. The theorems that can be proved determine how an agent perceives a set of (...) alternatives. A dual model relates perceived alternatives to a shared language, which the agents use in trading. So perceptions relate objective alternatives to an agent's subjective view of them, and reporting dually relates an agent's subjective world to a shared language. It turns out that an appropriately modified notion of competitive equilibrium always exists. However, in contrast with standard results in economic theory, competitive equilibrium need not be efficient. (shrink)

The development of general equilibrium theory represents one of the greatest advances in economic analysis in the latter half of the twentieth century. This book, intended for advanced undergraduates and graduate students, provides a broad introduction to competitive equilibrium analysis with an emphasis on concrete applications. The first three chapters are introductory in nature, paving the way for the more advanced second half of the book. Relative to the competition, it is much more 'user friendly' while offering (...) exceptionally broad coverage of topics. Well-designed and interesting applications help to make potentially abstract material more accessible. The book includes 92 illustrations and nearly 200 exercises. (shrink)

Economic explanations of inequality in liberal economies often appeal to social norms. This article argues that recent economic policies and institutional interventions, in favor of deregulation and away from participatory practices in both the political and economic spheres, have elicited norms that increasingly resemble those of the economic theory that has informed these interventions. This has altered the social ethos in an inegalitarian direction—individuals are more likely to conceive of themselves as acquisitive maximizers in their daily life, and there has (...) been a reduction in the number of institutional settings for people to deliberate on their values, commitments, and other priorities. (shrink)

As our understanding of biological evolution continues to deepen, tension still surrounds the relationship between competition and cooperation in the evolution of the biosphere, with rival viewpoints often associated with the Red Queen and Black Queen hypotheses respectively. This essay seeks to reconcile these viewpoints by integrating observations of some general trends in biosphere evolution with concepts from game theory. It is here argued that biodiversity and ecological cooperation are intimately related, and that both tend to cyclically increase over biological (...) history; this is likely due to the greater relative stability of cooperation over competition as a means of long-term conflict resolution within ecosystems. By integrating this view of the biosphere with existing models such as Niche Game Theory, it may be argued that competition and cooperation in ecosystems coexist at equilibria which shift preferentially towards increasing cooperation over biological history. This potentially points to a state of “cooperative equilibrium” as a limit or endpoint in long-term biosphere evolution, such that Black Queen and Red Queen behavior dominate different phases in an evolutionary movement towards optimal cooperative stability in ecological networks. This concept, if accepted, may also bear implications for developing future mathematical models in evolutionary biology, as well as for resolving the perennial debate regarding the relative roles of conflict and harmony in nature. (shrink)

One of the fundamental themes in economic theory is the study of the role of prices in achieving an optimal allocation of resources in a competitive, decentralized economy. The book begins with a review of the basic results on the rigorous elaboration of the Walras-Pareto theory in the context of a static economy with many agents. It summarizes some subsequent research in which the limits of the price-mechanism as a successful coordination device are recognized. When economic activity is allowed (...) with no pre-assigned terminal period, the two fundamental theorems linking competitive equilibrium allocations to Pareto optimality are challenged and the question of decentralization is carefully re-examined. With incomplete markets, and sequential trading, the concept of a Radner equilibrium is next introduced, and some of the striking properties of this are summarized. In a large economy with random shocks to preferences and/or endowments of individual agents, the implications of the celebrated laws of probability theory are explored. This book provides a clear and comprehensive analysis of the efficiency properties of general equilibrium, with many agents and an expanded list of commodities. It will be of particular interest to postgraduate and doctorate students of economic theory as well as scholars on Walrasian equilibrium, Pareto optimality and uncertainty theories. (shrink)

This article examines some of the main tenets of competition theory in light of the theory of evolution and the concept of an ecological niche. The principle of competitive exclusion and the related assumption that communities exist at competitive equilibrium - fundamental parts of many competition theories and models - may be violated if non-equilibrium conditions exist in natural communities or are incorporated into competition models. Furthermore, these two basic tenets of competition theory are not compatible (...) with the theory of evolution. Variation in ecologically significant environmental factors and non-equilibrium in population numbers should occur in most natural communities, and such changes have important effects on community relations, niche overlap, and the evolution of ecosystems. Ecologists should view competition as a process occurring within a complexdynamic system, and should be wary of theoretical positions built upon simple laboratory experiments or simplistic mathematical models.In considering the relationship between niche overlap and competition, niche overlap should not be taken as a sufficient condition for competition; many factors may prevent or diminish competition between populations with similar resource utilization patterns. The typically opposing forces of intraspecific and interspecific competition need to be simultaneously considered, for it is the balance between them that in large part determines niche boundaries. (shrink)

The paper presents a set of games of competition between two or three players in which reward is jointly determined by a stochastic biased mechanism and players’ choices. More specifically, a resource can be found with unequal probabilities in one of two locations. The first agent is rewarded only if it finds the resource and avoids being found by the next agent in line; the latter is rewarded only if it finds the former. Five benchmarks, based on different psychological and (...) game-theoretic assumptions are derived and their predictions compared to actual behavior of 120, 40, and 48 participants playing repeatedly. Of the five benchmarks—the unique (Nash) equilibrium, reinforcement learning, trust-based efficiency, maximum unpredictability, and regret-based (Impulse Balance) equilibrium—regret for missed opportunities best accounts for the qualitative aspect of participants’ behavior and regret attenuated by randomization best accounts for the quantitative aspect of behavior. (shrink)

We model economic environments in which individual choice sets are fixed and the level of a specific parameter that systematically modifies the preferences of all agents is determined endogenously to achieve equilibrium. The equilibrium concept, Biased Preferences Equilibrium, is reminiscent of competitive equilibrium: agents’ choice sets and their preferences are independent of the behaviour of other agents, the combined choices must satisfy overall feasibility constraints and the endogenous adjustment of the equilibrating preference parameter is analogous (...) to equilibrating price adjustment. The concept is applied in a number of economic examples. (shrink)

Competitive Governments, explores in a systematic way the hypothesis that governments are internally competitive, that they are competitive in their relations with each other and in their relations with other institutions in society which, like them, supply consuming households with goods and services. Breton contends that competition not only serves to bring the political system to an equilibrium, but it also leads to a revelation of the households' true demand functions for publicly provided goods and services (...) and to the molding of a link between the quantities and the qualities demanded and supplied and the tax prices paid for these goods and services. In the real world where information is costly, the links may not be first-best, but they will be efficient if competition is vigorous. (shrink)

Cognitive neuroenhancement involves the use of medical interventions to improve normal cognitive functioning such as memory, focus, concentration, or willpower. In this paper I give a Kantian argument defending the use of CNE in science, scholarly research, and creative fields. Kant’s universal law formulation of the categorical imperative shows why enhancement is morally wrong in the familiar contexts of sports or competitive games. This argument, however, does not apply to the use of CNE in higher education, scholarly or scientific (...) research, or creative endeavors such as visual art, fiction or poetry, or musical composition. This is because performance in these areas is embedded within practices that differ in morally significant ways from competitive practices. This important difference provides good reason to think that there is nothing morally wrong with the use of CNE in these areas. My approach is not simply to assume a full-fledged Kantian ethical theory and apply it straight away to the enhancement issue but to establish a reflective equilibrium between our moral intuitions, moral principles that support those intuitions, and the nature of the practices involved. (shrink)

In the jungle, power and coercion govern the exchange of resources. We study a simple, stylised model of the jungle that mirrors an exchange economy. We define the notion of jungle equilibrium and demonstrate that a number of standard results of competitive markets hold in the jungle.

The theory of competition has held a central place in economic analysis since Adam Smith. This book, written by one of the most distinguished of contemporary economic theorists, reports on a major research program to provide strategic foundations for the theory of perfect competition. Beginning with a concise survey of how the theory of competition has evolved, Gale makes extensive and rigorous use of dynamic matching and bargaining models to provide a more complete description of how a competitive equlibrium (...) is achieved. Whereas economists have made use of a macroscopic description of markets in which certain behavioral characteristics, such as price-taking behavior, are taken for granted, Gale uses game theory to re-evaluate this assumption, beginning with individual agents and modelling their strategic interaction. A strategic foundation for competitive equilibrium shows how such interaction leads to competitive, price-taking behavior. Essential reading for graduate courses in game theory and general equilibrium. (shrink)

Although general equilibrium theory originated in the late nineteenth century, modern elaboration and development of the theory began only in the 1930s and 1940s. This book focuses on the version of the theory developed in the second half of the twentieth century, referred to by Lionel McKenzie as the classical general equilibrium theory. McKenzie offers detailed and rigorous treatment of the classical model, giving step-by-step proofs of the basic theorems. In many cases he elaborates on the individual steps (...) to give a fuller understanding of the underlying principles. His goal is to provide readers with a true mastery of the methodology so that they can derive new results that will further enrich their thinking about general equilibrium theory. Special attention is given to the McKenzie model, in which it is not assumed that the number of firms is given but rather that technologies or activities are available to any agents who can supply the resources they require. The McKenzie model is used to establish the turnpike theorems of optimal and competitive capital accumulation. (shrink)

This article expands Michel Foucault's genealogy of liberalism and neoliberalism by analysing the concept of competition. It addresses four key liberal conceptions of competition in turn: the idea of competition as a destructive but progressive and thus necessary force (roughly 1830–90); economic theories of market equilibrium that theorize competition mathematically (1870 onwards); socio-biological ideas of competition as something natural (1850–1900); and sociological arguments that see competition as adding value to the social (1900–20). From this starting point, the article considers (...) the ways in which three main trajectories of neoliberal thought that emerged from the early 1920s onwards – Austrian, German and American – developed and responded to these conceptualizations of competition. In conclusion, it is argued that this history of the concept of competition leads to a new understanding of the tensions that lie at the heart of neoliberal thought, and which are largely missing from Foucault's account. (shrink)

In this article I argue both that an understanding of sport’s general character as competitive play can help us to read Homer more insightfully and that this reading can boomerang back to us to further illuminate the sport as competitive play thesis. My overall method is that of (Rawlsian) reflective equilibrium. The three sections of Homer that I examine are the Phaiacian games in Book 8 of the ‘Odyssey’, the Patroclos games in Book 23 of the ‘Iliad’, (...) and the Penelope games in Books 21–22 of the ‘Odyssey’. (shrink)

Using the approach known as ‘Economics of Scientific Knowledge’, this paper defends the view of scientific norms as the result of a ‘social contract’, i.e., as an equilibrium in the game of selecting the norms under which to proceed to play the game of scientific research and publication. A categorisation of the relevant types of scientific norms is offered, as well as a discussion about the incentives of the researchers in choosing some or other alternative rules.

Neoclassical and Austrian/evolutionary economic paradigms have different implications for integrating corporate social responsibility (corporate citizenship) and competitive strategy. porter's "Five Forces" model implicitly rests on neoclassical theory of the firm and is not easily reconciled with corporate social responsibility. Resource-based models of competitive strategy do not explicitly embrace a particular economic paradigm, but to the extent their conceptualization rests on neoclassical assumptions such as imperfect factor markets and profits as rents, these models also imply a trade-off between (...) class='Hi'>competitive advantage and corporate social responsibility. Differences in Austrian/evolutionary economic model's assumptions about equilibrium, profits, and other economic concepts allow this paradigm to embrace alternative views of strategy such as the activities or dynamic capabilities views. These alternative views of strategy focus on learning and adaptation; they align more easily with corporate social responsibility. In practice this alignment comes about because social engagement facilitates the learning and adaptation that are a source of competitive advantage. Among the many business arguments for CSR such as improved employee morale/productivity or brand differentiation, this view prioritizes innovation. (shrink)

The basic idea behind the Competitive Exclusion Principle is that species that have similar or identical niches cannot stably coexist in the same place for long periods of time when their common resources are limiting. A more exact definition of the CEP states that, in equilibrium, n number of sympatric species competing for a common set of limiting resources cannot stably coexist indefinitely on fewer than n number of resources. The magnitude or intensity of competition between species is (...) proportional to the degree of overlap in their niches or use of resources. Species that stably coexist do so because there are “important differences” in their niches or use of common limiting resources. (shrink)

There are few models of price competition in a homogeneous-good market which permit general asymmetries of information amongst the sellers. This work studies a price game with discontinuous payoffs in which both costs and market demand are ex ante uncertain. The sellers evaluate uncertain profits with maximin expected utilities exhibiting ambiguity aversion. The buyers in the market are permitted to split between sellers tieing at the minimum price in arbitrary ways which may be deterministic or random. The role of the (...) primitives in determining equilibrium prices in the market is analyzed in detail. (shrink)

No-arbitrage is the fundamental principle of economic rationality which unifies normative decision theory, game theory, and market theory. In economic environments where money is available as a medium of measurement and exchange, no-arbitrage is synonymous with subjective expected utility maximization in personal decisions, competitive equilibria in capital markets and exchange economies, and correlated equilibria in noncooperative games. The arbitrage principle directly characterizes rationality at the market level; the appearance of deliberate optimization by individual agents is a consequence of their (...) adaptation to the market. Concepts of equilibrium behavior in games and markets can thus be reconciled with the ideas that individual rationality is bounded, that agents use evolutionarily-shaped decision rules rather than numerical optimization algorithms, and that personal probabilities and utilities are inseparable and to some extent indeterminate. Risk-neutral probability distributions, interpretable as products of probabilities and marginal utilities, play a central role as observable quantities in economic systems. (shrink)

In his main work, The Science of Legislation , the Neapolitan Gaetano Filangieri proposed a set of extensive political and cultural reforms. These reforms were necessary to free eighteenth-century societies from the remnants of feudal institutions that obstructed international peace and economic growth. Filangieri's ideas were shaped by the international political climate between the seven Years’ War and the eve of the French Revolution. Reinterpreting Montesquieu and Genovesi through the influences of French radical and Enlightenment thought , as well as (...) the economics of Hume, Verri and the Physiocrats, he concluded that European modernity was inherently contradictory.From this perspective Filangieri set out to force a clean break between the technical horizons of mercantilism and enlightened absolutism and a society based on civil rights, a fair distribution of wealth and resources, and free trade. Proper ‘scientific’ knowledge of the rules and principles of legislation would allow governments to balance out the natural and cultural factors that characterise individual states, and to identify the appropriate model for social and economic development. If all states acted on their proper interest, international free trade and peaceful competition between states would emerge and the potential for general economic growth be materialised. Thus, the natural equilibrium and ‘universal consensus’ among nations could be restored. (shrink)

This paper provides an in-depth study and analysis of the quantitative relationship between ASEAN industry transfer and nuclear trade restructuring through the multiregional computable general equilibrium model and categorizes the ten major projects and 57 subprojects covered by the ASEAN Information Port project investment into construction, information technology, and telecommunications, according to the key directions of investment. We design and simulate the changes in production activities, trade activities, and the balance of payments behaviour of the national economy affected by (...) the project’s investment under 10 types of investment amount scenarios and prepare the corresponding social accounting matrix. Increased trade openness increases external risks and instability of the economy and fiscal revenues. At the same time, it creates other potential problems for the country such as environmental pollution and leading to unfair competition. Under free trade conditions, some manufacturers may choose to produce inputs that are not environmentally friendly to reduce costs, thereby harming the environment. For infant industries, if the government does not provide them with short-term protection or supportive policies, these new or developing infant industries may not have strong international competitiveness and may be vulnerable to the attacks of mature industries in the world. Therefore, based on the study of the influence of tax policy on trade openness, this paper examines the impact of changes in trade openness on a country’s economic environment and takes tax revenue as an example to conduct an empirical analysis and improve the factors that need to be considered when adjusting tax policy. (shrink)

This 1987 book looks at competition, attacking the notion that competition always leads to good results and that more competition is better. It also attacks the notion that cooperation is always harmful. An efficient economic equilibrium requires an optimal combination of both cooperation and rivalry. Telser first examines the genesis of certain late nineteenth-century laws that affected competition in the United States. Going on to give theoretical insights into cooperation and rivalry, he shows when unrestricted competition can lead to (...) an efficient equilibrium, as well as when restrictions on competition can provide for the same. The tensions between these two forces are especially pertinent to the study of innovation - the more costly it is to protect the property rights of ideas, the greater is the reliance on secrecy, and hence, the more likely is the wasteful duplication of results. (shrink)

We consider two scenarios of the Hotelling–Downs model of spatial competition. This setting has typically been explored using pure Nash equilibrium, but this paper uses point rationalizability (Bernheim, Econometrica J Economet Soc 52(4):1007–1028, 1984) instead. Pure Nash equilibrium imposes a correct beliefs assumption, which may rule out perfectly reasonable choices in a game. Point rationalizability does not have this correct beliefs assumption, which makes this solution concept more natural and permissive. The first scenario is the original Hotelling–Downs model (...) with an arbitrary number of agents. Eaton and Lipsey (Rev Econ Stud 42(1):27–49, 1975) used pure Nash equilibrium as their solution concept for this setting. They showed that with three agents, there does not exist a pure Nash equilibrium. We characterize the set of point rationalizable choices for any number of agents and show that as the number of agents increases, the set of point rationalizable choices increases as well. In the second scenario, agents have limited attraction intervals (Feldman et al. Variations on the Hotelling–Downs model. In: Thirtieth AAAI Conference on Artificial Intelligence, pp 496–501, 2016). We show that the set of point rationalizable choices does not depend on the number of agents, apart from this number being odd or even. Furthermore, the set of point rationalizable choices shrinks as the attraction interval increases. (shrink)

We study the performance of heuristics relative to the performance of optimal solutions in the rich domain of sequential search, where the decision to stop the search depends only on the applicant’s relative rank. Considering multiple variants of the secretary problem, that vary from one another in their formulation and method of solution, we find that descriptive heuristics perform well only when the optimal solution prescribes a single threshold value. We show that a computational heuristic originally proposed as an approximate (...) solution to a single variant of the secretary problem performs equally well in many other variants where the optimal solution prescribes multiple threshold values that gradually relax the criterion for stopping the search. Finally, we propose a new heuristic with near optimal performance in a competitive or strategic variant of the secretary problem with multiple employers competing with one another to hire job applicants. Both heuristics share a simple computational component: the ratio of the number of interviewed applicants to the number of those remaining to be searched. We present the subgame-perfect Nash equilibrium for this competitive variant and an algorithm for its computation. (shrink)

The paper proposes a notion of fairness which overcomes the conflict arising between efficiency and the absence of envy in economies with uncertainty and asymmetrically informed agents. We do it in general economies which include, as particular cases, the main models of differential information economies, providing in this framework a natural competitive equilibrium notion which satisfies the fair criterion. The analysis is conducted allowing the presence of large traders, which may cause the lack of perfect competition.

This paper studies the dynamic characteristics of triopoly models that are constructed based on a 3-dimensional Cobb–Douglas utility function. The paper presents two parts. The first part introduces a competition among three rational firms on which their prices are isoelastic functions. The competition is described by a 3-dimensional discrete dynamical system. We examine the impact of rationality on the system’s steady state point. Studying the stability/instability of this point, which is Nash equilibrium and is unique in those models, is (...) illustrated. Numerically, we give some global analysis of Nash point and its stability. The second part deals with heterogeneous scenarios. It consists of two different models. In the first model, we assume that one competitor adopts the local monopolistic approximation mechanism while the other opponents are rational. The second model assumes two heterogeneous players with LMA mechanism against one rational firm. Studies show that the stability of NE point of those models is not guaranteed. Furthermore, simulation shows that when firms behave rational with symmetric costs, the stability of NE point is achievable. (shrink)

In earlier work, the author has studied the economic role of planning horizons in making a case for complementarity as the predominant feature of social interdependence. This paper compares the different choice strategies implied by substitution, opposition and conflicts of interest in an economics of fear with those arising from horizon effects, economic complementarity and concerts of interest in an economics based on love. The contrasting implications of a psychological literature on negative vs. positive emotions and their health effects, along (...) with the findings in neurophysiological research about how humans are hard-wired for empathy and compassion leads to some fundamental changes in how we might address and revise social problems through economic analysis. The aim of this paper is to extend a horizonal case for complementarity in the author's previous work into its psychological links to research findings on healthy cognitive function and its emotional basis. An economics of substitution yields quite different conclusions about optimal institutional forms and how we address and frame social relations than are implied by an explicitly horizonal economics of complementary social relations. Recent psychological and neurophysiological studies support a horizonal case for complementarity in social relations, showing that our orthodox substitution assumptions and models of competitive equilibrium should be rejected for a renewed economic analysis based on horizonal models of complementarity and cooperation as a means to achieve greater social well-being in a healthier and more integrative form of social organization. The issues to be explored are not entertained within the currently existing frame of orthodox economics, so we must step beyond our standard habitual assumptions. (shrink)

Economists generally associate the redistribution of resources with the apparatus of taxes and transfer payments. Such redistributions are done by the power of the authorities. However, resources are redistributed by other means as well. People give away income in a variety of ways, deliberate and unintentional. In this paper, agents transfer consumption goods in return for a good which lacks material qualities and affects their preferences because it has “value”. An example of a real life commodity without intrinsic value is (...) diamonds. The standard consumption value of a diamond is low, especially as artificial diamonds look the same as real ones to the naked eye. Many luxury goods such as art pieces have similar characteristics. Owning a house in a “rich” area could have extra benefits in consumption and, yet, one important motivation is simply to live in an expensive neighborhood. By holding such a good an agent refrains from acquiring resources that he could consume and, thus, frees resources for other agents. Our thinking on this issue originates from a naive question. Why are wealthy people striving to be wealthier? It is quite absurd to think that rich people wish to increase the consumption of standard goods as assumed in the classical consumer model. Indeed, by acquiring an expensive diamond or an original piece of art, a consumer demonstrates his avoidance of consumption. We construct and analyse an elementary competitive equilibrium model in which the value of “useless” jewels enter the preferences of consumers. We show that if jewels are scarce, they can trade at a positive price despite having no intrinsic utility. Under fairly natural assumptions, a positive price equilibrium redistributes consumption from the rich to the poor. Thus, the model demonstrates the common wisdom that the existence of luxury goods can have a positive effect on income distribution. This paper is mainly expository. The idea of consumption goods lacking intrinsic value and of prices entering directly the utility functions is not original.. (shrink)

A novel thermodynamic perspective on natural selection is presented. In the case that life continuity is optimized in an ideal system, where relatively constant and homogeneous selective pressures favour a given competing species, natural selection leads that system to a stationary state of maximum genotypic uniformity of life and maximum sustainable consumption of available energy by life (competitive equilibrium). Structurally and functionally, this optimizing tendency towards competitive equilibrium looks similar to the optimizing tendency towards thermodynamic (...) class='Hi'>equilibrium of classical thermodynamics (maximum energetic uniformity and maximum degradation of available energy). The principle of competitive exclusion may thus be conceptually viewed as an ecological manifestation of the second law of (classical) thermodynamics. On the other hand, the novel thermodynamic perspective on natural selection is discussed with regard to the open and nonequilibrium system of nature, where selective pressures vary in space and time. In this case, natural selection can induce diversity instead of uniformity, though an optimizing tendendcy towards maximum sustainable consumption of resources (optimization of life continuity) always remains. Overall, it is concluded that the action of natural selection favours the maximization of the sustainable consumption of energy at the level of individual organism. (shrink)

Do markets generate a “just” wage? The answer to this question will depend upon the particular theory of the market that the political economist employs. When comparing actual labor markets with the neoclassical theory of competitive equilibrium as its normative benchmark, Joseph Heath argues that factor pricing is orthogonal to normative issues such as distributive justice. We argue that Heath’s conclusion, though not invalid, follows from a similar normative benchmark of equilibrium, one that evaluates factor pricing without (...) taking into account the institutional conditions within which factor prices emerge. Though indeed classical political economists and early neoclassical economists failed to deliver an explicit theory of distributive justice, what Heath overlooks is that implicit to their understanding of the market process was an institutional theory of distributive justice. (shrink)

Ronald Dworkin's theory of equality of resources draws heavily on conceptual tools developed in economic theory. His criterion for a just distribution of resources is closely connected with two economic ideas: first, the idea that a distribution of resources reflects a concern for equality if it is envy-free; second, the idea that such an envy-free distribution of resources is attainable as a competitive equilibrium from equal split. The objective of this paper is to show that the criterion of (...) equality of resources has been misinterpreted by normative economics, largely due to Dworkin's own lack of precision, and that it needs to be reformulated in order to be intelligible. The dimensions along which the reformulation is needed concern the nature of the preferences used in what Dworkin calls the ‘envy test’ and the nature of the envy test itself. (shrink)

One of the central questions of economics relates to the coordination of individual units within a large organization to achieve the central objectives of that organization. This book examines the problems involved in allocating resources in an economic system where decision-making is decentralized into the hands of individuals and individual enterprises. The decisions made by these economic agents must be coordinated because the input decisions of some must eventually equal the output decisions of others. Coordination arises naturally out of the (...) mathematical theory of optimization but there is still the question of how it can be achieved in practice with dispersed knowledge. The essays here explore the many facets of this problem. Nine papers are grouped under the title 'Economies with a single maximand'. They include papers on static and dynamic optimization, decentralization within firms, and nonconvexities in optimizing problems. Fourteen papers are concerned with 'Economies with multiple objectives'. Among the topics covered here are stability of competitive equilibrium, stability in oligopology, and dynamic shortages. The final part of the book includes three papers on informational efficiency and informationally decentralized systems. Leonid Hurwitcz is the Nobel Prize Winner 2007 for The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, along with colleagues Eric Maskin and Roger Myerson, for his work on the effectiveness of markets. (shrink)

This article focuses on the latest developments in mainstream economic theory as of 1999. Changes in economic theory are particularly significant in a period when the Stalinist version of Marxian theory is also in disarray, and the whole question of markets and economic coordination in socialist economies is in practical and theoretical flux. The most important abstract results in the finite-commodity space general-equilibrium theory are that equilibria are locally unique, that is, prices close to but different from the (...) class='Hi'>equilibrium prices leave an imbalance between supply and demand, and that a logical link exists between competitive equilibrium allocations and an efficient allocation of resources. A stronger theory of the productive unit can now develop to balance the so far one-sided concentration of theory on market interactions. (shrink)

Philosophical action theory seems to be in pretty good shape. The same may not be true for the study of human action in economics. Famous is the rant that the study of human action in economics gives reason to tremble for the reputation of the subject. But how does this come about? Since economic action is about action, the broader study must surely have a strong impact on the more specific field. The paper sets out, from the ground up, how (...) an essential concept in economic theory–the concept of competition–can fundamentally benefit from insights derived exclusively from analytical action theory broadly conceived. In doing so, the paper delivers on an old Austrian promise: it is sometimes claimed that Austrian economists understand competition better than most economists. This may be a bold claim, since Austrian economists have neither traced the understanding of subjectivity to its very origin (the theory of intentionality), nor have they traced their sympathy for methodological individualism in relation to market processes to its very ground (the theory of (human) action). This paper aims to fill this gap. Moreover, by grounding an Austrian view of competition in analytic action theory, it succeeds in avoiding the serious problems of the dominant equilibrium approach. By explaining competition as rivalry, the paper draws on the philosophy and logic of human action to bring the (economic) agent back into play. In this way, a case is made for an integrated view of Austrian theory as an amalgam of Austrian economics and analytic action theory. (shrink)

F. A. Hayek's realistic economic theory has been replaced by the formalistic use of equlibrium models that bear little resemblance to reality. These models are as serviceable to the right as to the left: they allow the economist either to condemn capitalism for failing to measure up to the model of perfect competition, or to praise capitalism as a utopia of perfect knowledge and rational expectations. Hayek, by contrast, used equilibrium to show that while capitalism is not perfect, it (...) contains error‐correcting institutions that bring it closer to perfection than is intuitively apparent. (shrink)

Starting from the premise that firms are distinct in terms of their capacity to create innovations, this article explores the rationale for R&D cooperation and the choice between alliances that involve information sharing, cost sharing or both. Defining innovative capability as the probability of creating an innovation, it examines firm strategy in a duopoly market, where firms have to decide whether or not to cooperate to acquire a fixed cost R&D infrastructure that would endow each firm with a firm-specific innovative (...) capability. Furthermore, since emerging industries are often characterized by high technological uncertainty and diverse firm focus that makes the exploitation of spillovers difficult, this article focuses on a zero spillover context. It demonstrates that asymmetry has an impact on alliance choice and social welfare, as a function of ex-post market competition and fixed costs of R&D. With significant asymmetry no alliance may be formed, while with similar firms the cost sharing alliance is dominant. Finally, it ascertains the settings under which the equilibrium outcome is distinct from that maximizing social welfare, thereby highlighting some conditions under which public investment in a technology park can be justified. (shrink)

The article examines the challenge of achieving sustainable mediational equilibrium within the Self–Other relationship. It argues that the mere pursuit of mutual understanding among dialogue participants is insufficient to guarantee productive communication, particularly in contexts where interactions are driven by competition for scarce resources and opportunities. Under such conditions, subjects risk becoming dependent on instrumental reason – the logic of control and suppression – which transforms both the Self and the Other from fully-fledged personalities into functions of reified rationality. (...) The analysis introduces a distinction between two roles of the individual: the person as a bearer of unique values and meanings, and the individual as a subject of social relations, an actor immersed in practical interactions. It is demonstrated that the capacity of the former to exert control over the latter is limited, and that interactions are shaped not only by the personal qualities of the participants but also by the impersonal logic of instrumental reason. This logic is conceptualized as a kind of third subjectivity that mediates the dialogue between the Self and the Other. Achieving mediational equilibrium becomes possible through the development of autonomy among the parties, through their transformation, mutual recognition, and the search for a measure of compatibility. This approach is traced through examples from A.S. Akhiezer’s theory of sociocultural mediation, A.P. Davydov’s concept of inter-subjective dialogue, and R. Bush and J. Folger’s theory of transformative mediation. Key concepts in the latter include empowerment (strengthening participants’ ability to clearly recognize their goals and make responsible decisions) and recognition (willingness to hear and understand the Other’s perspective). The essence of transformative mediation lies in the transition from imposing one party’s position to a collaborative search for new possibilities, allowing the realization of both Self and Other’s interests through dialogue. In conclusion, the article asserts the importance of overcoming the logic of mutual accusations by shifting the focus from the opponent’s personality to the impersonal structures limiting the self-determination of all parties. (shrink)

The article’s intellectual core resides in the examination of social phenomena through the lenses of ambivalence and ambitemptiness. Democracy is conceived through the cultivation of the ideal of national solidarity within the framework of the “indivisible and unified nation” and revolution — values which, according to B. Anderson, individuals do not choose of their own volition. Nevertheless, it functions by virtue of structures that are freely chosen by individuals, specifically political parties and civil society organisations, among which trade unions assume (...) a paramount role in ensuring social solidarity. The author posits that a functioning political democracy, viewed as a historically ambi temptuous phenomenon, necessitates the reanimation of sustained equilibrium between the for ces of social hegemony and counter-hegemony. This revival hinges on transformative shifts in the structure of civil society, particularly reinstatement of pivotal social functions to trade unions. The article underscores the phenomenon of unprecedented demonstrative solidarity exhibited by the Democratic Party of the USA towards the strike movement. The author emphasises that a fully-fledged European liberal democracy was established during its golden age, preceding financial globalisation, as a social democracy. Within its framework, competitive and pluralist elections were complemented by the possibility of nationwide strikes facilitated by trade unions capable of social mobilisation. Proposing the term “political society” to denote the phenomenon encompassing political parties and movements, the article argues that their viability depends on their connection with civil society structures. It is asserted that neither right-wing nor left-wing populism possesses the capacity to fully neutralise “democratic fatigue”. (shrink)

The balance of nature concept is an old idea that manifests itself in anumber of forms in population and community ecology. This paper focuseson population ecology, where controversy surrounding the balance ofnature takes the form of perennial debates over the significance ofdensity dependence, population regulation, and species interactions suchas competition. One of the most striking features of these debates, overthe course of the previous century in ecology, is the tendency to arguethe case on largely conceptual grounds. This paper explores twoquestions. (...) Why this tendency to settle on conceptual grounds what is soobviously an empirical issue? Are there any good conceptual arguments tobe had in this area? (shrink)

Models of electoral competition between two opportunistic, office-motivated parties typically predict that both parties become indistinguishable in equilibrium. I show that this strong connection between the office motivation of parties and their equilibrium choice of identical platforms depends on two—possibly false—assumptions: Issue spaces are uni-dimensional and Parties are unitary actors whose preferences can be represented by expected utilities. I provide an example of a two-party model in which parties offer substantially different equilibrium platforms even though no exogenous (...) differences between parties are assumed. In this example, some voters’ preferences over the 2-dimensional issue space exhibit non-convexities and parties evaluate their actions with respect to a set of beliefs on the electorate. (shrink)

A quantitative interpretation is given of the (in)coherence that moral agents experience as a tension between their ordered moral judgments over n physically incompatible actions, and the competitive ordering of motivating intensities (or, desires). Then a model describing one’s tendency to reduce the experienced in-coherence is constructed. In this model, moral sensitivity (S) and desire attachment (e) function as primitives that motivate from opposing perspectives the reduction of incoherence. Two distinct sub-processes of this reduction are therefore initiated by (S) (...) and (e) co-ordinated (more or less efficiently) by the agent’s degree of rationality (R) characteristic of her capacity to handle such internal tensions. This process ends when a new equilibrium between what motivates and what resists (further) reduction has been reached. A macro-equilibrium is described involving (R) constrained by weakness-of-will (W w ). A reinterpretation of the Aristotelian characters (enkratês, akratês, etc.) and an exegesis of Hume’s ‘Calm Passions’ follow as applications. (shrink)

Continuing tensions exist between mainstream bioethics and advocates of the disability rights movement. This paper explores some of the grounds for those tensions as exemplified in From Chance to Choice: Genetics and Justice by Allen Buchanan and coauthors, a book by four prominent bioethicists that is critical of the disability rights movement. One set of factors involves the nature of disability and impairment. A second set involves presumptions regarding social values, including the importance of intelligence in relation to other human (...) characteristics, competition as the basis of social organization, and the nature of the parent–child relationship. The authors’ disapproval of certain aspects of the disability rights movement can be seen to be associated with particular positions regarding these factors. Although the authors intend to use a method of ‘broad reflective equilibrium,’ we argue that their idiosyncratic commitment to particular concepts of disability and particular social values produces a narrowing of the moral significance of their conclusions regarding disability rights. (shrink)

Quantum frameworks for modeling competitive ecological systems and self-organizing structures have been investigated under multiple perspectives yielded by quantum mechanics. These comprise the description of the phase-space prey–predator competition dynamics in the framework of the Weyl–Wigner quantum mechanics. In this case, from the classical dynamics described by the Lotka–Volterra (LV) Hamiltonian, quantum states convoluted by statistical gaussian ensembles can be analytically evaluated. Quantum modifications on the patterns of equilibrium and stability of the prey–predator dynamics can then be identified. (...) These include quantum distortions over the equilibrium point drivers of the LV dynamics which are quantified through the Wigner current fluxes obtained from an onset Hamiltonian background. In addition, for gaussian ensembles highly localized around the equilibrium point, stability properties are shown to be affected by emergent topological quantum domains which, in some cases, could lead either to extinction and revival scenarios or to the perpetual coexistence of both prey and predator agents identified as quantum observables in microscopic systems. Conclusively, quantum and gaussian statistical driving parameters are shown to affect the stability criteria and the time evolution pattern for such microbiological-like communities. (shrink)

We trace the difference between the ways in which apes and humans co–operate to differences in communicative abilities, claiming that the pressure for future–directed co–operation was a major force behind the evolution of language. Competitive co–operation concerns goals that are present in the environment and have stable values. It relies on either signalling or joint attention. Future–directed co–operation concerns new goals that lack fixed values. It requires symbolic communication and context–independent representations of means and goals. We analyse these ways (...) of co–operating in game–theoretic terms and submit that the co–operative strategy of games that involve shared representations of future goals may provide new equilibrium solutions. (shrink)

Even the simplest cell exhibits a high degree of functional differentiation (FD) realized through several mechanisms and devices contributing differently to its maintenance. Searching for the origin of FD, we briefly argue that the emergence of the respective organizational complexity cannot be the result of either natural selection (NS) or solely of the dynamics of simple self-maintaining (SM) systems. Accordingly, a highly gradual and cumulative process should have been necessary for the transition from either simple self-assembled or self-maintaining systems of (...) functionless structural components to systems with FD. We follow results of recent in vitro experiments with respect to competition among protocells, where a primitive type of selection begins to operate among them accompanied by a parallel evolution of their functional domain. We argue that minimal forms of FD should be established within the evolution of SM processes in protocells as they undergo a simpler selection process for stability and persistence in a prebiotic environment. We then suggest the concept of closure of constraints (CoC) as a way to identify and describe minimal FD in a far-from-equilibrium SM organization. We show in detail how the concept of CoC together with the conditions for its fulfillment can be applied in the case of a simple protocellular system that begins to couple internal chemical reactions with the formation of its membrane components. Finally, we discuss how such SM systems can evolve towards significantly higher levels of FD, suggesting this is mainly the result of functional recombination (formation of mechanisms) in the context of a modular SM organization. (shrink)

With increasing market competition and rapid development of service economy, more and more enterprises are shifting from providing products or services to providing product-service systems that integrate products and services, in order to improve competitiveness and profitability. Meanwhile, consumers have strategic delayed purchasing behavior when purchasing the PSS and high requirements for service quality. This paper investigates the two-period pricing and service quality decisions of product-service supply chain considering consumers’ strategic behavior under decentralized and centralized scenarios. The equilibrium results (...) are compared in two scenarios. In order to eliminate performance loss under the decentralized scenario, we design two-period dynamic contracts to coordinate the PSSC. Furthermore, numerical simulation is provided to verify the feasibility of the contracts. The following conclusions can be drawn: the higher the service input-efficiency, the more beneficial for alleviating consumers’ strategic purchase behavior under two scenarios, but this mitigation effect is more obvious under the centralized scenario. Compared with the centralized scenario, the service quality is lower, the two-period PSS sales prices are higher, and the two-period profit is lower under the decentralized scenario. The proportion of service valuation will promote the widening of the service quality gap under two scenarios, but in some cases, the service input-efficiency will weaken the promotion effect of the proportion of service valuation. The design of the two-period combined contracts depends on the proportion of service valuation. When the proportion of service valuation is high, the “two-period revenue sharing + service-cost sharing” combined dynamic contract can achieve PSSC perfect coordination. However, when the proportion of service valuation is low, it is necessary to design complexity combined dynamic contract which can achieve PSSC perfect coordination. (shrink)

Over the past two decades, academic economics has undergone a mild revolution in methodology. The language, concepts and techniques of noncooperative game theory have become central to the discipline. This book provides the reader with some basic concepts from noncooperative theory, and then goes on to explore the strengths, weaknesses, and future of the theory as a tool of economic modelling and analysis. The central theses are that noncooperative game theory has been a remarkably popular tool in economics over the (...) past decade because it allows analysts to capture essential features of dynamic competition and competition where some parties have proprietary information. The theory is weakest in providing a sense of when it - and equilibrium analysis in particular - can be applied and what to do when equilibrium analysis is inappropriate. Many of these weaknesses can be addressed by the consideration of individuals who are boundedly rational and learn imperfectly from the past. Written in a non-technical style and working by analogy, the book, first given as part of the Clarendon Lectures in Economics, is readily accessible to a broad audience and will be of interest to economists and students alike. Knowledge of game theory is not required as the concepts are developed as the book progresses. (shrink)

This book is the first systematic treatment of the philosophy of science underlying evolutionary economics. It does not advocate an evolutionary approach towards economics, but rather assesses the epistemic value of appealing to evolutionary biology in economics more generally. The author divides work in evolutionary economics into three distinct, albeit related, forms: a structural form, an evidential form, and a heuristic form. He then analyzes five examples of work in evolutionary economics falling under these three forms. For the structural form, (...) he examines the parallelism between natural selection and economic decision making, and the parallelism between natural selection and market competition. For the evidential form, he looks at the relationship between animal and human economic decision making, and the evolutionary explanation of diversity in human economic decision making. Finally, for the heuristic form, he focuses on the plausibility of equilibrium modeling in evolutionary ecology and economics. In this way, he shows that linking evolutionary biology and economics can make for a powerful methodological tool that can enable progress in our understanding of various economics questions. Structure, Evidence, and Heuristic will be of interest to scholars and advanced students working in philosophy of science, philosophy of social science, evolutionary biology, and economics. (shrink)

Darwin's theory of evolution brought to an end the static view of nature. It was no longer possible to think of species as immortal, with secure places in nature. Fluctuation of population could no longer be thought of as occurring within definite limits which had been set at the time of creation. Nor was it any longer possible to generalize from the differential reproductive potentials, or from a few cases of mutualism between species, that everything in nature was “fitted to (...) produce general ends, and reciprocal uses.” 134 The appeal to “design” could no longer be substituted for answers to questions concerning animal demography. Instead, the dynamics of a population had to be viewed as the outcome of species' struggle against animate and inanimate factors in the environment. Both the members of a species and the environmental factors tend to vary randomly, and therefore neither evolution nor population dynamics could be fully understood alone. For this reason Darwin's linking of the two subjects was inevitable and not merely an historical accident. Since Darwin had shown that no automatic equilibrium existed, he demonstrated the importance of closer study of the causes of population dynamics and extinction. He also indicated that an understanding of population depends upon the development of a broad knowledge in ecology.Viewed from another direction, Darwin's work ended the early modern era of population studies by clarifying three interrelated problems which were important for understanding population: extinction, distribution, and the nature of species. The components of his answer had been discussed in the eighteenth century, but there had not existed enough evidence for the completion of the revolution in thought which had then begun. At the beginning of the nineteenth century, Playfair found the evidence for extinction conclusive, and, in spite of Lamarck, Curvier convinced the scientific world that there could no longer be any doubt about it. This was a step the importance of which, with his limited knowledge of biogeography and population, Cuvier could not have fully realized. Lamarck attempted, with his evolutionary theory, to circumvent the necessity for admitting extinction, but he overestimated the adaptability of organisms and in doing so he underestimated the importance of competition and the whole field of ecology. On the other hand, he was not willing to let questions such as the origin of species remain taboo to science. The origin of species was a biogeographical as well as a paleontological question. Humboldt correlated environment with the distribution of species and conveyed the impression that plant communities are subject to change. De Candolle, following the lead of Linnaeus and Humboldt, emphasized the ecological aspects of biogeography, not only the importance of habitat and range, clearly showing the ecological effects of competition. The entomologists Kirby and Spence took a faltering step toward understanding the relationship between population and ecological role, but they fell short of any significant new conclusions. Neither they nor Swainson could fully comprehend the new perspective of De Candolle.Lyell was able to bring together the evidence from these three lines of investigation and weave them into an important synthesis that almost accomplished that Darwin later did. Although opposing Lamarck's theory of evolution, Lyell had a dynamic view of ecology. He realized that population dynamics offered an important key to the understanding of biogeography. Since he knew that species become extinct, he investigated closely the factors which could either preserve or extinguish species. While explaining these factors, he described the interrelationships of species in greater detail than had ever been done before. Forbes continued to develop Lyell's ecological concepts, and his first-hand field experience enabled him to describe biotic communities more concretely than Lyell had.Having the advantages of Lyell's understanding and his own experience from a global voyage, Darwin could take the final step from the static to the dynamic concept of life. He had seen populations fluctuating and also fossil species in South America, and on the Galapagos Islands he had encountered a biogeographical problem that could not be credibly solved without the idea of evolution. However, the bare idea of evolution did not fully answer his questions. He sought physiological causes of extinction before he read Malthus and realized that De Candolle and Lyell had correctly emphasized the importance of competition. Darwin found that, in order to understand evolution, he needed to improve his understanding of ecology. He wanted to know when populations were most easily decimated, how extensive were competition and cooperation, what effects parasites have upon populations, and what changes occur in biotic communities when a species is either added or subtracted. He contributed to some extent to answering these questions. Though there remained much for others to do, there was now a new and more secure theoretical framework within which later studies could be interpreted. As Ernst Mayr has observed, Darwin's “consistent thinking in terms of population has had an impact on biological theory and practice which is second only to his sponsorship of natural selection as the mechanism of evolution.” 135. (shrink)