Generalising from Hypotheses about Observed Behaviour

P. J. Curwen

Chapter Chapter 8 in The Theory of the Firm, 1976, pp 57-60 from Palgrave Macmillan

Abstract: Abstract Relatively little attention has been paid to this approach to the oligopoly problem, perhaps because it cannot be expected to yield many insights into oligopolistic behaviour until much more empirical information has been gathered together. A useful summary of progress in this direction appears in Lipsey,1 who selects as his central hypothesis that of qualified joint profit maximisation.2 He defines this as follows:3 Firms that recognise that they are in rivalry with one another will be motivated by two opposing forces; one moves them towards policies that maximise the combined profits of the existing group of sellers, the other moves them away from the joint profit-maximising position. Both forces are associated with observable characteristics of firms, markets and products, and thus we can make predictions about market behaviour on the basis of these characteristics.

Keywords: Traditional Theory; Total Profit; Observe Behaviour; Advertising Expenditure; Established Firm (search for similar items in EconPapers)
Date: 1976
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-15645-0_8

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DOI: 10.1007/978-1-349-15645-0_8

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