Andrews, Philip Walter Sawford (1914–1971)
Andrews was born in Southampton and died in Lancaster. Most of his career was spent in Oxford and from 1946 until 1967, when he moved to his last post as Foundation Professor of Economics at the University of Lancaster, he was an Official Fellow of Nuffield College. He was founding editor of the Journal of Industrial Economics. In 1949, after conducting detailed case study investigations of business behaviour, Andrews published a potentially revolutionary analysis of firms in competitive oligopolistic markets. It included a non-marginalist, non-equilibrium theory of pricing and capacity choices. Firms were predicted to set prices by adding a mark-up to their ‘normal’ costs at their target levels of capacity utilization. The size of the mark-up would be limited by the difference between their own costs and their estimates of the opportunity costs of other firms with the knowledge to supply duplicates of their products and steal their markets. Only when their assessments of these cost conditions changed would they change their prices. Firms would also be expected to hold spare capacity in order to satisfy new customers without forcing established ones to turn their goodwill elsewhere.