Abstract
In an economy with very many agents the market environment of any one of these is independent of the market actions he decides upon. More generally one can characterize an economy as perfectly competitive if the removal of any one agent from the economy would leave the remaining agents just as well off as they were before his removal. (The economy is said to satisfy a ‘no surplus’ condition; see Makowski, 1980; and Ostroy, 1980.) When an economy is not perfectly competitive, an agent in making a decision must take note of its effect on his market environment, for example, the price at which he can sell. This effect may not be known (or known with certainty) and will therefore be the subject of conjecture. A conjecture differs from expectations concerning future market environments which may, say, be generated by some stochastic process. It is concerned with responses to the actions of the agent.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Bibliography
Arrow, K.J. 1959. Toward a theory of price adjustment. In M. Abramovitz et al., The Allocation of Economic Resources, Stanford: Stanford University Press, 41–51.
Bresnahan, T.F 1981. Duopoly models with consistent conjectures. American Economic Review 71(5), 934–45.
Drèze, J. 1975. Existence of equilibrium under price rigidity and quantity rationing. International Economic Review 16, 301–20.
Gabszewicz, J.J. and Vial, J.D. 1972. Oligopoly ‘à la Cournot’ in general equilibrium analysis. Journal of Economy Theory 4, 381–400.
Gale, D. 1978. A note on conjectural equilibria. Review of Economic Studies 45(1), 33–8.
Hahn, F.H. 1977. Exercise in conjectural equilibria. Scandinavian Journal of Economics 79, 210–26.
Hahn, F.H. 1978. On non-Walrasian equilibria. Review of Economic Studies 45, 1–17.
Hart, O. 1982. Reasonable conjectures. Suntory Toyota Centre for Economics and Related Disciplines. London School of Economics.
Kreps, D.M. and Wilson, R.B. 1982. Sequential equilibria. Econometrica 50, 863–94.
Makowski, L. 1980. A characterization of perfectly competitive economies with production. Journal of Economic Theory 22(2), 208–21.
Makowski, L. 1983. ‘Rational conjectures’ aren’t rational and ‘reasonable conjectures’ aren’t reasonable. SSRC Project on Risk, Information and Quantity Signals. Cambridge University Discussion Paper 60.
Negishi, T. 1960. Monopolistic competition and general equilibrium. Review of Economic Studies 28, 196–202.
Negishi, T. 1979. Micro-Economic Foundations of Keynesian Macro-Economics. Amsterdam: North-Holland.
Novshek, W. and Sonnenschein, H. 1978. Cournot and Walras equilibrium. Journal of Economic Theory 19, 223–66.
Ostroy, J. 1980. The no-surplus condition as a characterisation of perfectly competitive equilibrium. Journal of Economic Theory 22(2), 183–207.
Silvestre, J. 1977. A model of a general equilibrium with monopolistic behaviour. Journal of Economic Theory 16(2), 425–42.
Triffin, R. 1940. Monopolistic Competition and General Equilibrium Theory. Cambridge: Mass.: Harvard University Press.
Ulph, D. 1983. Rational conjectures in the theory of oligopoly. International Journal of Industrial Organization 1(2), 131–54.
Editor information
Copyright information
© 1989 Palgrave Macmillan, a division of Macmillan Publishers Limited
About this chapter
Cite this chapter
Hahn, F.H. (1989). Conjectural Equilibria. In: Eatwell, J., Milgate, M., Newman, P. (eds) General Equilibrium. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-19802-3_9
Download citation
DOI: https://doi.org/10.1007/978-1-349-19802-3_9
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-0-333-49525-4
Online ISBN: 978-1-349-19802-3
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)