Product Equilibrium under Monopolistic Competition

Product Equilibrium under Monopolistic Competition

Product Equilibrium under Monopolistic Competition

Product Equilibrium under Monopolistic Competition

Excerpt

The Swedish economist Johan Åkerman has said that economists know of many correct answers but not so many correct questions. The questions raised in this volume involve product equilibrium of the firm under single-period, single- product planning as well as under multi-period and multi- product planning. They also involve the theory of duopoly, collusive as well as non-collusive. The answers given may turn out to be inadequate or even wrong, but it is still hoped that the questions raised are "correct" ones in the sense of being practically important and realistic.

My indebtedness to Professor E. H. Chamberlin and Dean E. S. Mason of Harvard can hardly be overstressed. At every stage of my work their encouragement and help have been invaluable. The real innovation in the theory of monopolistic competition as seen by Professor Chamberlin is the notion of product and selling effort as variables, and he very early paid much attention to my theoretical experiments. Professor Mason as early as 1946 suggested that my studies in the theory of cartel formation might shed light over the theory of noncollusive duopoly, too. An earlier version of the present volume was accepted in 1949 as a doctoral dissertation at the University of Copenhagen. Professor Zeuthen's and Professor Winding Pedersen's very detailed and constructive criticism, presented under my five-hour public defense of the dissertation, has left its mark everywhere in my manuscript.

To the many who have helped me with particular problems I express my sincere thanks. Mr. Arne Jensen of the University of Copenhagen gave me much good advice on mathematics and statistics. For factual information about a very large and important industrial market I went to the executives of the large automobile manufacturers in Detroit, Michigan, and I have been much impressed by their hospitality, their friendliness, and the long time they spent in discussing my problems with me. Special thanks are due to Mr. G. H. England of the Styling Department of Ford Motor Company, Dearborn . . .

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