The classical notion of competition revisited

We compare and analyse two different conceptions of market competition: the walrasian notion of perfect competition and the Classical notion of free competition: while the former may be described as an equilibrium state in which atomistic agents treat prices parametrically, the latter is a situation in which agents, endowed by market power, fix prices strategically. We show that price undercutting or outbidding are the typical phenomena that, for the Classical authors, may be observed in a market characterized by free competition. We investigate some problematic aspects of the neoclassical notion of perfect competition and we reconstruct the Classical theory of free competition, as developed, in particular, by Adam Smith and Karl Marx, in the light of the modern notion of mixed strategies equilibria.Classical Economics, Competition, Adam Smith, Karl Marx, mixed strategies

ASTRONOMICAL CALIBRATION OF THE UPPER LANGHIAN/LOWERSERRAVALLIAN RECORD OF RAS IL PELLEGRIN SECTION (MALTA ISLAND, CENTRAL MEDITERRANEAN)

A high-resolution geochemical and micropaleontological data set has been obtained from the uppermost Langhian/lower Serravallian marly sediments of the Ras il Pellegrin section (Malta Island). A combination of the recorded stratal organization with the results of spectral analyses performed on CaCO3 data and faunal signals shows a dominance of the classic Milankovitch periodicities as modulating forcing of the studied succession. The application of band-pass filters allowed us to select the different Milankovitch frequencies (precession, obliquity and short- and long-eccentricity) from the original faunal and geochemical signals and to compare them with the same components of the astronomical curve. The reliability of the short-term astronomical tuning has been tested by using the larger-order cyclicity (100-400 kyr) as control. The good match of the different records with the selected insolation curve is consistent with the results of the cross-spectral analysis showing high coherency values in all the considered frequency bands. The calibration provided astronomical ages for the sedimentary cycles and consequently for all the bioevents recorded in the section. In particular, an age of 13.59 Ma has been obtained for the last occurrence (LO) of Sphenolitus heteromorphus, at present considered the best bioevent useful for recognizing the Langhian/Serravallian boundary. Moreover, an age of 12.62 Ma has been obtained for the first occurrence (FO) of Paragloborotalia partimlabiata.

The classical notion of competition revisited

The paper seeks to fill a lacuna within Classical economics concerning the process of market price determination in a short-period equilibrium. To this aim, first we distinguish the Classical notion of free competition from the Walrasian notion of perfect competition and we argue that the latter is beset by some theoretical difficulties alien to the former. Second, we reconstruct in some detail Smith and Marx’s views concerning market price determination and we show that Marx’s extensive use of metaphors and numerical examples foreshadows the modern taxonomy of buyers’ market, sellers’ market and mixed strategy equilibrium in the capacity space of a standard Bertrand duopoly model. Finally, we highlight similarities and differences between the Classical notion of competition and contemporary game-theoretic oligopoly model

Competition

This is an entry produced for the Handbook of the History of Economic Analysis, edited by Gilbert Faccarello and Heinz D. Kurz (eds). Volume 3. Cheltenham, UK and Northampton, MA, USA: Edward Elgar, forthcoming. We analyze competition as rivarly in a race, as a specific market structure, and as a discovery procedure. We also explore the relation of competition with class struggle and competition policy

Adam Smith on Monopoly Theory. Making good a lacuna

The paper analyzes Adam Smith’s views on monopoly focusing on Book IV and V of The Wealth of Nations and argues that Smith has left his analysis of monopoly in an embryonic form while the majority of scholars have assessed it starting from premises different from those, actually though implicitly, used by Smith to approach this subject. We show that Smith makes use of the word ‘monopoly’ to refer to a heterogeneous collection of market outcomes, besides that of a single seller market, and that Smith’s account of monopolists’ behavior is richer than that provided by later monopoly theorists

The classical notion of competition revisited

We compare and analyse two different conceptions of market competition: the walrasian notion of perfect competition and the Classical notion of free competition: while the former may be described as an equilibrium state in which atomistic agents treat prices parametrically, the latter is a situation in which agents, endowed by market power, fix prices strategically. We show that price undercutting or outbidding are the typical phenomena that, for the Classical authors, may be observed in a market characterized by free competition. We investigate some problematic aspects of the neoclassical notion of perfect competition and we reconstruct the Classical theory of free competition, as developed, in particular, by Adam Smith and Karl Marx, in the light of the modern notion of mixed strategies equilibria

The Malthus versus Ricardo 1815 Corn Laws Controversy: An appraisal

The paper proposes a rational reconstruction of the arguments developed by Malthus and Ricardo in their 1815 essays, Grounds of an Opinion and An Essay on Profits, to repudiate and endorse a policy of free corn trade, respectively. Malthus envisaged defence and opulence as two mutually alternative options and, if required to make a choice, he had no doubt in choosing the former. By contrast, Ricardo excluded any alternative between defence and opulence: trade does note give a sustainable weapon to potential enemies of Great Britain whereas trade-driven opulence may give Great Britain greater means to wage a war

Adam Smith on Monopoly Theory. Making good a lacuna

The paper analyzes Adam Smith’s views on monopoly focusing on Book IV and V of The Wealth of Nations and argues that Smith has left his analysis of monopoly in an embryonic form while the majority of scholars have assessed it starting from premises different from those, actually though implicitly, used by Smith to approach this subject. We show that Smith makes use of the word ‘monopoly’ to refer to a heterogeneous collection of market outcomes, besides that of a single seller market, and that Smith’s account of monopolists’ behavior is richer than that provided by later monopoly theorists

Competition

This is an entry produced for the Handbook of the History of Economic Analysis, edited by Gilbert Faccarello and Heinz D. Kurz (eds). Volume 3. Cheltenham, UK and Northampton, MA, USA: Edward Elgar, forthcoming. We analyze competition as rivarly in a race, as a specific market structure, and as a discovery procedure. We also explore the relation of competition with class struggle and competition policy

From endogenous growth to stationary state: The world economy in the mathematical formulation of the Ricardian system

We analyze international trade in a Pasinetti-Ricardo growth model in the world economy scenario in which several small trading countries coexist and international commodity prices are determined by the interplay of supply and demand amongst them. We demonstrate that all the trading countries eventually reach the stationary state, though this process is not monotonic and the dynamics of capital and population may actually push some countries toward the stationary state and others away from it. We also use our model to assess an argument which Malthus employed in the second edition (1803) of An Essay on the Principle of Population to support a policy of agricultural protectionism