Arbeitspapier
Supply theory sans profit-maximization
We utilize the analytical construct of a stochastic supply function to provide an aggregate representation of a finite collection of standard deterministic supply functions. We introduce a consistency postulate for a stochastic supply function that may be satisfied even if no underlying deterministic supply function is rationalizable in terms of profit maximization. Our consistency postulate is nonetheless equivalent to a stochastic expansion of supply inequality, which summarizes the predictive content of the traditional theory of competitive supply. A number of key results in the deterministic theory follow as special cases from this equivalence. In particular, it yields a probabilistic version of the law of supply, which implies the traditional specification. Our analysis thus provides a necessary and sufficient axiomatic foundation for a de-coupling of the predictive content of the classical theory of competitive firm behavior from its a priori roots in profit maximization, while subsuming the traditional theory as a special case.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 4018
- Classification
-
Wirtschaft
Firm Behavior: Theory
- Subject
-
Supply aggregation
stochastic supply function
stochastic consistency
weak axiom of profit maximization
stochastic supply inequality
law of supply
Angebot
Mikroökonomik
Stochastischer Prozess
Theorie der Unternehmung
Gesamtwirtschaftliches Angebot
Ökonomisches Prinzip
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Dasgupta, Indraneel
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2009
- Handle
- URN
-
urn:nbn:de:101:1-20090304744
- Last update
-
20.09.2024, 8:25 AM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Dasgupta, Indraneel
- Institute for the Study of Labor (IZA)
Time of origin
- 2009