Beyond the reach of the invisible hand: Impediments to economic activity, market failures, and profitability

Dennis A. Yao

Strategic Management Journal, 1988, vol. 9, issue S1, 59-70

Abstract: In this paper it is argued that failures of the competitive market are necessary conditions for supranormal profitability. Three fundamental causes of these market failures—production economies and sunk costs, transactions costs, and imperfect information—are developed from the theory of competitive markets and discussed in terms of their impact on profitability. The identification of these ‘impediments to economic activity’ is useful for determining successful strategies to exploit market failures.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://doi.org/10.1002/smj.4250090707

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:9:y:1988:i:s1:p:59-70

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().