Optimality

Harold Lydall

Chapter 5 in The Entrepreneurial Factor in Economic Growth, 1992, pp 49-57 from Palgrave Macmillan

Abstract: Abstract Theoretical work on the optimality of perfect competition has been so extensive that, despite the well-known deviations of perfect competition from optimality, there is a strong predisposition among economists to assume that any move away from perfect competition is a move away from an ideal state. Our suggestion that the only kinds of competition that can exist in practice are semi-perfect or fixprice competition will be likely, therefore, to attract the immediate criticism that such models imply a fall from grace. But, before we accept that conclusion, we need to consider two important questions: (1) to what extent can perfect competition be accurately described as an ideal state? (2) what are the positive and negative features, from a welfare point of view, of the alternative forms of competition described above?

Keywords: Technical Progress; Relative Prex; Allocative Efficiency; Perfect Competition; Entrepreneurial Spirit (search for similar items in EconPapers)
Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37446-1_5

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DOI: 10.1057/9780230374461_5

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