Abstract
The claim that a business firm must maximize profit if it is to survive serves as an informal statement of the common conclusion of a class of theorems characterizing explicit models of economic selection processes. Such models, by making explicit the strong assumptions needed to generate this sort of result, are the basis for a critique of standard economic theory which relies on competitive equilibrium. Models of Schumpeterian competition, emphasizing the centrality of innovation, plainly provide a much better description of the world we live in than do models of static equilibrium.
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
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Winter, S.G. (2008). Competition and Selection. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_35-2
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DOI: https://doi.org/10.1057/978-1-349-95121-5_35-2
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Publisher Name: Palgrave Macmillan, London
Online ISBN: 978-1-349-95121-5
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Chapter history
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Latest
Competition and Selection- Published:
- 27 February 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_35-2
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Original
Competition and Selection- Published:
- 11 October 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_35-1