Perfect competition, methodologically contemplated

John F.M. McDermott

Journal of Post Keynesian Economics, 2015, vol. 37, issue 4, 687-703

Abstract: The concept of perfect competition embodies a formal contradiction, precisely as would that of “the largest integer.” The ascription of legitimate meaning to the concept, as in George J. Stigler’s well-known 1957 essay, “Perfect Competition, Historically Contemplated,” is demonstrably circular, hence methodologically unacceptable. Mathematical problems arising from the concept are explored and it is these that give rise to the contradiction, as is demonstrated. Paradoxically, the elimination of perfect competition and its supporting canon comes at no cost to a scientific, that is, empirically oriented economics.

Date: 2015
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DOI: 10.1080/01603477.2015.1050335

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