Abstract
Under competitive conditions, a business firm must maximize profit if it is to survive — or so it is often claimed. This purported analogue of biological natural selection has had substantial influence in economic thinking, and the proposition remains influential today. In general, its role has been to serve as an informal auxiliary defence, or crutch, for standard theoretical approaches based on optimization and equilibrium. It appeared explicitly in this role in a provocative passage in Milton Friedman’s famous essay on methodology (Friedman, 1953, ch. 1), and it seems that many economists are familiar with it in this context only.
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
Alchian, A.A. 1950. Uncertainty, evolution and economic theory. Journal of Political Economy 58, June, 211–21.
Dasgupta, P. 1985. The theory of technological competition. In New Developments in the Analysis of Market Structure, ed. J. Stiglitz and G.F. Mathewson, Cambridge, Mass.: MIT Press.
Friedman, M. 1953. Essays in Positive Economics. Chicago: University of Chicago Press.
Kamien, M. and Schwartz, N. 1981. Market Structure and Innovation. Cambridge: Cambridge University Press.
Nelson, R. and Winter, S. 1982. An Evolutionary Theory of Economic Change. Cambridge, Mass.: Belknap Press of The Harvard University Press.
Phillips, A. 1971. Technology and Market Structure: a Study of the Aircraft Industry. Lexington, Mass.: D.C. Heath.
Schumpeter, J.A. 1912. The Theory of Economic Development. Trans. Redvers Opie, Cambridge, Mass.: Harvard University Press, 1934.
Schumpeter, J.A. 1950. Capitalism, Socialism and Democracy. 3rd edn, New York: Harper.
Simon, H. 1955. A behavioral model of rational choice. Quarterly Journal of Economics 69, February, 99–118.
Winter, S.G. 1964. Economic ‘natural selection’ and the theory of the firm. Yale Economic Essays 4(1), Spring, 225–72.
Winter, S.G. 1971. Satisficing, selection and the innovating remnant. Quarterly Journal of Economics 85(2), May, 237–61.
Winter, S.G. 1984. Schumpeterian competition in alternative technological regimes. Journal of Economic Behavior and Organization 5(3–4), September—December, 287–320.
Editor information
Copyright information
© 1991 Palgrave Macmillan, a division of Macmillan Publishers Limited
About this chapter
Cite this chapter
Winter, S.G. (1991). Competition and Selection. In: Eatwell, J., Milgate, M., Newman, P. (eds) The World of Economics. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-21315-3_15
Download citation
DOI: https://doi.org/10.1007/978-1-349-21315-3_15
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-0-333-55177-6
Online ISBN: 978-1-349-21315-3
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)