On the proper behavior of atoms: A comment on a critique
Physica A: Statistical Mechanics and its Applications, 2008, vol. 387, issue 1, 277-280
A recent article [S. Keen, R. Standish, Profit maximization, industry structure, and competition: a critique of neoclassical theory, Physica A 370 (2006) 81–85] suggests that the Cournot model, which is widely used in Economics, is inappropriate and the article proposes an alternative. I argue that the supporting arguments compute derivatives incorrectly which, amongst other things, have the effect of confusing the relationship between an individual actor in a market and the total mass of firms. I also indicate that the proposed alternative was considered about 20 years ago and found to be unsatisfactory. Thus, it should not be surprising when the authors fail to use their own proposal in the second half of the paper.
Keywords: Equilibrium; Oligopoly; Cournot; Nash; First order condition; Maximization; Simulation (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:387:y:2008:i:1:p:277-280
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