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COMPETITION AND PRICES IN A PERFECTLY COMPETITIVE ECONOMY

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Date Issued:
1982
Summary:
In classical economic theory, competition consisted of buyers outbidding one another and sellers underbidding one another; and it was argued that, for sufficiently large markets, competition would yield uniform prices in equilibrium. Neoclassical economists subsequently investigated the role of preferences in trading, concluding that, in equilibrium, each trader would obtain the most desirable commodity bundle affordable at prevailing prices, given his initial resources. In the process, however, neoclassical economists ultimately made price uniformity an assumption, assumed individuals incapable of influencing prices under any circumstances, and redefined competition to mean price-taking behavior. By thus denying individuals any active role in price determination, an inconsistency was introduced into the theory. This thesis eliminates the inconsistency by combining classical competitive behavior and the neoclassical insights into the role of preferences, to produce an axiomatic theory of competition within which the characteristics of equilibrium (uniform prices and utility maximization) are rigorously derived.
Title: COMPETITION AND PRICES IN A PERFECTLY COMPETITIVE ECONOMY.
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Name(s): HORNER, GEORGE FRENCH, JR.
Florida Atlantic University, Degree grantor
Scheidell, John M., Thesis advisor
College of Business
Department of Economics
Type of Resource: text
Genre: Electronic Thesis Or Dissertation
Issuance: monographic
Date Issued: 1982
Publisher: Florida Atlantic University
Place of Publication: Boca Raton, Fla.
Physical Form: application/pdf
Extent: 95 p.
Language(s): English
Summary: In classical economic theory, competition consisted of buyers outbidding one another and sellers underbidding one another; and it was argued that, for sufficiently large markets, competition would yield uniform prices in equilibrium. Neoclassical economists subsequently investigated the role of preferences in trading, concluding that, in equilibrium, each trader would obtain the most desirable commodity bundle affordable at prevailing prices, given his initial resources. In the process, however, neoclassical economists ultimately made price uniformity an assumption, assumed individuals incapable of influencing prices under any circumstances, and redefined competition to mean price-taking behavior. By thus denying individuals any active role in price determination, an inconsistency was introduced into the theory. This thesis eliminates the inconsistency by combining classical competitive behavior and the neoclassical insights into the role of preferences, to produce an axiomatic theory of competition within which the characteristics of equilibrium (uniform prices and utility maximization) are rigorously derived.
Identifier: 14128 (digitool), FADT14128 (IID), fau:10942 (fedora)
Collection: FAU Electronic Theses and Dissertations Collection
Note(s): College of Business
Thesis (M.A.)--Florida Atlantic University, 1982.
Subject(s): Competition
Prices
Held by: Florida Atlantic University Libraries
Persistent Link to This Record: http://purl.flvc.org/fcla/dt/14128
Sublocation: Digital Library
Use and Reproduction: Copyright © is held by the author, with permission granted to Florida Atlantic University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Use and Reproduction: http://rightsstatements.org/vocab/InC/1.0/
Host Institution: FAU
Is Part of Series: Florida Atlantic University Digital Library Collections.