In any stable dynamic system, in fact, the term can be viewed "as a state of no motion, and as an attractor of arbitrary motions of the underlying dynamic process" Weintraub , In the first sense, the equilibrium is characterized by the satisfaction of a set of static con- ditions: there is no mechanism through which the equilibrium is estab- lished, and the idea is that of every- individual's actions and plans being in harmony with everyone else's Weintraub , —what can be called the consistency view of equilibrium.

In the second sense, instead, the equilibrium is closely associated with the mechanical idea of reach- ing a balance of forces, that is, with the playing out of some kind of economic behavior, like the dampening of the oscillations of a pendu- lum. This requires the existence of an equilibration process by virtue of which the equilibrium is actually reached or asymptotically tended to Weintraub , —thereby justifying the name process view at- tached to this second meaning of equilibrium.

The so-called years of "high theory" contributed in two fundamental directions. First, thanks in particular to the works of Frisch and, later, of Paul Samuelson, the tools of dynamic systems theory were used to make a precise distinction between the two meanings. Second, thanks to Friedrich Hayek, Erik Lindahl, and Hicks, the consistency view of equilibrium replaced the traditional process view as the dominant inter- pretation of equilibrium. As a consequence, the equilibrium state was separated from the adjustment process and the latter was reinterpreted in terms of the agents' expectations and plans.

The characterization of equilibrium as a situation of mutual consistency of plans permitted the association of equilibrium itself with an instant of time, thereby making it possible to describe the dynamic evolution of the system in terms of a sequence of equilibrium positions—the so-called temporary equilibrium method. Moreover, the explicit role assigned to the agents' mental vari- ables allowed the definition not the analysis of disequilibrium in terms of the disappointment of plans, thereby linking the absence of equilib- rium to the behavioral or forecasting mistakes made by the agents.

However, the consistency view demanded a price be paid, namely, the abandonment of the analysis of the equilibration process, that is, of the process through which the system achieved the equilibrium. This deadlock—which clearly transpired from the writings of authors such as Hayek, Lindahl, Oskar Morgenstern, and Hicks—was felt also by the oligopoly theorists.

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Bowley's CV approach had formally brought the mental variables into duopoly analysis. It did not take long for the consistency condition to be envisaged and called forth as the necessary condition to tie down each firm's conjectures about its rival's reaction. No assumption about the duopolists' forecasting ability— short of the limiting case of perfect foresight—could properly justify the achievement of equilibrium as a pair of consistent output choices. These difficulties, which reproduced in the field of oligopoly analysis the same puzzles that were blocking the efforts of both the general equi- librium and the business cycle theorists, led to questions like the ones listed at the beginning of this section.

What matters most, they created the proper conditions for the post-World War II prevalence of an empir- ical, almost atheoretical, approach to imperfect competition—the well- known structure-conduct-performance approach. References Amoroso, L. Lezioni di economia matematica.

Bologna: Zanichelli. Bertrand, J, [] Review of Theorie mathematique de la richesse sociaie, by Leon Walras, and Recherches sur les principes mathematiques de la theorie des richesses, by Augustin Cournot. In Magnan de Bonder , Bowley, A. The Mathematical Groundwork of Economics.

Oxford: Oxford University Press.

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Casarosa, C. II prezzc minimo del modelio di Edgeworth. Economia politico 1. Chamberlin, E. Quarterly Journal of Economics First formulated by Roy Harrod and then fully analyzed by Wassily Leontief , the consistency condition required that in order for the duopoly equilibrium to be deter- minate, each firm's conjectured reaction had to be equal to its actual reaction. For a discussion cf this condition, see the references in the previous footnote. The Theory of Monopolistic Competition. Cambridge: Harvard Uni- versity Press. Coase, R. The Problem of Duopoly Reconsidered. Review of Economic Studies 2.

Cournot, A.

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Researches into the Mathematical Principles of the Theory of Wealth. New York: Kelley. Currie, M. Wrestling with Tune. Ann Arbor: University of Michigan Press. Daughety, A. Daughety, Cambridge: Cambridge University Press. Dimand, M.

## Microeconomic theories of imperfect competition - Persée

A History of Game Theory. London: Routledge. II concetto di equilibria nella teoria economica neoclassica. Rome: NIS. Edgeworth, F. The Mathematical Economics of Professor Amoroso.

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Eco- nomic Journal The Pure Theory of Monopoly. Baumol and S. Goldfeld, Fauveau, P. Consideration mathematiques sur la theorie de la valeur. Jour- nal des economistes, 3d ser. Fellner, W. Competition among the Few. New York: Knopf. Fisher, I. Cournot and Mathematical Economics. Quarterly Journal of Eco- nomics Mathematical Investigations in the Theory of Value and Prices. New Haven, Conn. Friedman, J. Balassa and R. Nelson, Amsterdam: North-Holland. Scottish Journal of Political Economy Frisch, R. Translated by W. International Economic Papers Giocoli, N. Cheltenham, U. Hansson, B.

London: Croom Helm. Harrod, R. Review of Chamberlin Economic Journal Doctrines of Imperfect Competition. In Readings in Price Theory, edited by G. Stigler and K.

Boulding, Ingrao, B. Researches economiques de Louvain Cambridge: MIT Press. The Problem of Duopoly. The Economics of the Short Period. London: Macmillan. Kaldor, N. Review of von Stackelberg Economica Leonard, R. Leontief, W. Stackelberg on Monopolistic Competition. Journal of Political Economy Magnan de Bomier. HOPE Marshall, A. Some Aspects of Competition.

## Economic Theory

In Memorials of Alfred Marshall, edited by A. Pigou, London: Macmillan Mayberry, J. Nash Jr. A Comparison of Treatments of a Duopoly Situation. Econometrica Morgensiern, O. Perfect Foresight and Economic Equilibrium. Schotter, Morrison, C.

Magnan de Bomier on Coumot-Bertrand. Nichcl, A. Professor Chamberlin's Theory of Limited Competition. Quar- terly Journal of Economics Edgeworth's Theory cf Duopoly Price. Pigou, A.