The paper covers the 1924-1949 debate on the conjectural variations approach to duopoly theory and focuses on the evolution of economists’ views about the imposition of a consistency condition on the firms’ conjectures. The main point is that, though the consistency condition entailed a notion of interactive equilibrium that resembled the modern correct conjectures equilibrium, most neoclassical economists of the time refused to apply it because of the excessive requirements it imposed upon the firms’ forecasting abilities, as well as of its failure to also encompass an explanation of the process leading to equilibrium.
“The escape from conjectural variations: the consistency condition in duopoly theory from Bowley to Fellner”
GIOCOLI, NICOLA
2005-01-01
Abstract
The paper covers the 1924-1949 debate on the conjectural variations approach to duopoly theory and focuses on the evolution of economists’ views about the imposition of a consistency condition on the firms’ conjectures. The main point is that, though the consistency condition entailed a notion of interactive equilibrium that resembled the modern correct conjectures equilibrium, most neoclassical economists of the time refused to apply it because of the excessive requirements it imposed upon the firms’ forecasting abilities, as well as of its failure to also encompass an explanation of the process leading to equilibrium.File in questo prodotto:
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