Neo-classical theory of competition or Adam Smith's hand as mathematized ideology

Joseph L. McCauley

Physica A: Statistical Mechanics and its Applications, 2001, vol. 299, issue 1, 294-298

Abstract: Orthodox economic theory (utility maximization, rational agents, efficient markets in equilibrium) is based on arbitrarily postulated, nonempiric notions. The disagreement between economic reality and a key feature of neo-classical economic theory was criticized empirically by Osborne. I show that the orthodox theory is internally self-inconsistent for the very reason suggested by Osborne: lack of invertibility of demand and supply as functions of price to obtain price as functions of supply and demand. The reason for the noninvertibililty arises from nonintegrable excess demand dynamics, a feature of their theory completely ignored by economists.

Keywords: Econophysics; Nonlinear dynamics; Stochastic processes (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378437101003089
Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

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:eee:phsmap:v:299:y:2001:i:1:p:294-298

DOI: 10.1016/S0378-4371(01)00308-9

Access Statistics for this article

Physica A: Statistical Mechanics and its Applications is currently edited by K. A. Dawson, J. O. Indekeu, H.E. Stanley and C. Tsallis

More articles in Physica A: Statistical Mechanics and its Applications from Elsevier
Bibliographic data for series maintained by Catherine Liu ().