Abstract
The crux of the problem has been expressed by Margolis as follows:1
The information and calculability necessary for the management of a firm to move to its equilibrium profit-maximising price-output combination are clearly not available. Uncertainty and ignorance are omni-present. No matter how pleasing may be the prospect of an activity with the greatest possible profits, the choice for management is rarely on the agenda.
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Notes and References
R. A. Gordon, American Economic Review (June 1948) p. 287.
See, for example, P. J. Drhymes, International Economic Review (Sep 1964);
S. H. Hyams, International Economic Review (Sep 1966);
E. Zabel, International Economic Review (June 1967);
B. P. Stigum, International Economic Review (Oct 1969);
E. Zabel, International Economic Review (Oct 1969); B. P. Stigum, Quarterly Journal of Economics (Nov 1969);
A. Sandmo, American Economic Review (Mar 1971); J. Lintner, ‘Optimum or Maximum Corporate Growth Under Uncertainty’, in The Corporate Economy, ed. R. Marris and A. Wood; R. N. Batra and A. Ullah, Journal of Political Economy (May–June 1974), and especially E. S. Phelps (ed.), Microeconomic Foundations of Employment and Inflation Theory.
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© 1976 P. J. Curwen
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Curwen, P.J. (1976). Imperfections of Information. In: The Theory of the Firm. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-15645-0_14
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DOI: https://doi.org/10.1007/978-1-349-15645-0_14
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