Patinkin, Perfect Competition, and Unemployment Disequilibria

If formal institutions of contract governance are absent or ineffective, traders try to substitute relational governance based on norms and sanctions. However, these alternatives need good information and communication concerning members’ actions; that works well only in relatively small communities. If there are fixed costs, the market has too few firms for perfect competition. The optimum must be a second best, balancing the effectiveness of contract governance and dead-weight loss of monopoly. This chapter explores this idea using a spatial model with monopolistic competition. It is found that relational governance constrains the size of firms and can cause inefficiently excessive entry, beyond the excess that already occurs in a spatial model without governance problems. Effects of alternative methods of improving governance to ameliorate this inefficiency are explored.

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Consistent Comparisons Between Monopoly and Perfect Competition

The Journal of Economic Education ◽

10.1080/00220485.1992.10844760 ◽

1992 ◽

Vol 23 (3) ◽

pp. 255-261

Author(s):

Susan E. Skeath ◽

Ann D. Velenchik ◽

Len M. Nichols ◽

Karl E. Case

Keyword(s):

Perfect Competition

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Perfect Competition and the Core

The Review of Economic Studies ◽

10.2307/2297137 ◽

1982 ◽

Vol 49 (1) ◽

pp. 15 ◽

Cited By ~ 15

Author(s):

Andreu Mas-Colell

Keyword(s):

Perfect Competition ◽

The Core

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Macroeconomics with Non-Perfect Competition: A Reply

The Economic Journal ◽

10.2307/2232560 ◽

1982 ◽

Vol 92 (367) ◽

pp. 706

Author(s):

Yew-Kwang Ng

Keyword(s):

Perfect Competition

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Analysing the Finnish pulpwood market under alternative hypotheses of competition

Canadian Journal of Forest Research ◽

10.1139/x00-168 ◽

2001 ◽

Vol 31 (2) ◽

pp. 236-245 ◽

Cited By ~ 7

Author(s):

A Maarit I Kallio

Keyword(s):

Dynamic Models ◽

Production Capacity ◽

Perfect Competition ◽

Forest Sector ◽

Investment Behavior ◽

Pulp Industry ◽

Variable Capacity ◽

Short Run ◽

Alternative Hypotheses ◽

Capacity Constrained

Efficient functioning of the wood market is crucial in a country where the forest sector is of strong macroeconomic importance. We investigate the possibility of noncompetitive behavior of the buyers in the Finnish pulpwood market. We simulate the buyers' behavior under alternative competition structures (perfect competition, Cournot oligopsony, and monopsony) and compare the simulated equilibria with the observed behavior in the years 19881997. In the static models the pulp industry firms are assumed to maximize their short-run variable profits either under fixed production capacity or, hypothetically, under variable capacity. The results suggest that, during the boom years, the industry has been capacity constrained, sometimes even for monopsony output. During the recession years, the actual wood prices have often been between simulated Cournot oligopsony and monopsony prices. Hence, noncompetitive behavior of the buyers is possible during the recessions. The capacity investment behavior of the industry is explored with dynamic models. The conclusions from these models depend on the price elasticity of pulpwood supply used.

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Resource-Advantage Theory: A Snake Swallowing Its Tail or a General Theory of Competition?

Journal of Marketing ◽

10.1177/002224299706100406 ◽

1997 ◽

Vol 61 (4) ◽

pp. 74-82 ◽

Cited By ~ 39

Author(s):

Shelby D. Hunt ◽

Robert M. Morgan

Keyword(s):

General Theory ◽

Perfect Competition ◽

New Paradigm ◽

Competition Theory ◽

Resource Advantage Theory ◽

Level Analysis ◽

Resource Advantage

Deligönül and çavuşgil (1997) conduct a paradigm-level analysis of resource-advantage (R-A) theory. They argue that (1) Hunt and Morgan (1995) offer resource-advantage theory as a replacement for perfect competition theory, (2) a successful challenger to any theory must come from a new paradigm, (3) but both perfect competition and R-A theory come from the same paradigm. Therefore, (4) the replacement thesis is dubious. We evaluate their argument.

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