Abstract
The modern interest in selection processes within economic systems originated with([Alchian’s 1950]) intervention in the debate on the applicability of marginal analysis in economics. (The contributions to that debate which are referred to in this section have been rigorously examined by[Vromen,1995].) The critics, such as ([Harrod 1939]) and ([Lester 1946]), had argued that businessmen typically lacked the information necessary to make the calculations on which profit-maximizing actions could be based, and ([Machlup 1946]) had responded by claiming that experienced businessmen had developed the expertise which allowed them to maximize profits, just as experienced drivers developed the expertise which allowed them to overtake optimally. ([Machlup 1946,p.521]) then made the potentially fatal admission that “all the relevant magnitudes involved… are subjective” and may differ from those observed by outside analysts, without recognizing that even the explicit use of marginal analysis by businessmen may not then lead to the outcomes that the analysts would predict ([Vromen,1995,pp. 20-1]).
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Loasby, B. (2001). Selection Processes in Economics. In: Dopfer, K. (eds) Evolutionary Economics: Program and Scope. Recent Economic Thought Series, vol 74. Springer, Dordrecht. https://doi.org/10.1007/978-94-010-0648-4_8
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