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The Neoclassical School --The Departure from Pure Competiton

Qi Xin, Zhao Mengyue Wang Fei, Duan Shuhong. The Neoclassical School --The Departure from Pure Competiton.

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The Neoclassical School --The Departure from Pure Competiton

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  1. Qi Xin, Zhao Mengyue Wang Fei, Duan Shuhong The Neoclassical School--The Departure from Pure Competiton

  2. a visiting professor at Stanford University as well as George Gund Professor of Economics and Business Administration (on leave) at Harvard Business School. He plans to take up a permanent position at Stanford at the beginning of 2013 Alvin E. Roth

  3. He studies in the field of game theory, market design and experimental economics, and is known for his emphasis on applying his economic theory to solutions for "real-world" problems. He helped redesign mechanisms for selecting medical residents, New York City high schools and Boston primary schools. Alvin E. Roth

  4. He is a Professor Emeritus at University of California, Los Angeles, affiliated with departments of Mathematics and Economics. Lloyd Shapley

  5. He studies in the field of mathematical economics and especially game theory. Shapley value, stochastic games, the Bondareva-Shapley theorem and so on. His early work with R.N.Snow and Samuel Karlin on matrix games was so complete that little has been added since. Lloyd Shapley

  6. 有三个人在海难后流落到了荒岛，这三人中有一位是物理学家，一位是化学家，另外一位是经济学家。他们三人在研究如何打开一个罐头充饥。物理学家说，我们将罐头抛下山，利用地心吸力的原理，使得罐头加速下坠而打开。化学家说，我们应该把太阳能当成实验室的酒精灯，烧烤罐头让它产生化学变化而打开。最后这位经济学家说我们假设这个罐头是打开的。。。有三个人在海难后流落到了荒岛，这三人中有一位是物理学家，一位是化学家，另外一位是经济学家。他们三人在研究如何打开一个罐头充饥。物理学家说，我们将罐头抛下山，利用地心吸力的原理，使得罐头加速下坠而打开。化学家说，我们应该把太阳能当成实验室的酒精灯，烧烤罐头让它产生化学变化而打开。最后这位经济学家说我们假设这个罐头是打开的。。。 Just For Fun

  7. 1. Infinite buyers and sellers 2. Zero entry and exit barriers 3. Perfect factor mobility 4. Perfect information 5. Zero transaction costs 6. Profit maximization 7. Homogenous products 8. Property rights Perfectly competitive market assumptions

  8. 1. In reality: reasons a.barriers for market entry b. patents c. technology d. regulations … Imperfectly competitive market

  9. 2. Forms a.monopoly b. oligopoly c. monopolistic competition d. monopsony: in which there is only one buyer of a good. e. oligopsony: in which there are few buyers of a good. f. Information asymmetry Imperfectly competitive market

  10. 3. Scholars a.Piero Sraffa: criticize Marshall’s theory b. Edward Hastings Chamberlin: heterogeneous products c. Joan Violet Robinson: monopsony Imperfectly competitive market

  11. British Italian economist Born in Turin, Italy, 1898. His father is Professor in Commercial Law University Foundation in Turin, and registered in the Faculty of Law, 1917，be made to do conscription service Due to Intensifying fascist rule, he emigrated to Britain in 1927, becoming a Cambridge University lecturer. Lecture on “History of value theory" and "German and Italian banking system" He has been Fellow of Trinity College, Cambridge PieroSraffa

  12. 1925, Sraffa published the relationship between cost and production • 1926, The Laws of Returns under Competitive Conditions • opened the door leading to the modern imperfect competition theory. • 1951-1955, editor of Ricardo's works and correspondence • taken as founding the Neo-Ricardian school • 1960, Production of Commodities by Means of Commodities • Revival of the classical school’s thinking Achievements

  13. Marshall's theories contradict with each other • Supply and demand curves to determine the price and quantity • perfect competition Beginning of modern imperfect competition theory

  14. perfect competition free to expand production Increasing returns to scale diminishing cost / unnecessary to low its price Expand production damage perfect competition

  15. perfect competition horizontal demand curve companies can sell any number of products at a certain price horizontal marginal cost curve In input market, companies can buy any number of input at a certain price. marginal revenue curve and marginal cost curve does not have an intersection

  16. There are the definition confusion in industrial equilibrium theory of Marshall Different assumptions Different application area

  17. Heterogeneous products Consumers' loyalty producers will have a protected market. In this part of the market, producer may have a monopoly status: they will not lose the whole market even if they raise price.

  18. He highlighted the weaknesses of the perfectly competitive model commonly used in traditional economics. Sraffa cast light on imperfect competition theory

  19. born in Washington, DC • professor at Harvard University • Theory of monopolistic competition Edward Chamberlin(1899～1967)

  20. market is neither competitive, nor monopolistic. • product is different. Chamberlin's thought

  21. assumptions: • product differentiation • Alternative forms of differentiation: quality differences; additional service; location; and packaging. • Results in firm facing a downward-sloping demand curve.Demand curve is highly, but not perfectly, elastic. Theory of monopolistic competition

  22. product group The output of a set of firms constitute a product group if the substitutability in demand among the products is very high relative to the substitutability between those firms’outputs and other goods generally. Theory of monopolistic competition

  23. uniformity all the firm faces the same demand curve and have the same cost function. • many sellers. Many firms competing for the same group of customers(顾客群) or product group(产品组). Theory of monopolistic competition

  24. Monopolistic Competition Elastic Demand Curve similar to that of a monopolist, but demand is flatter

  25. Demand Curve faced by Monopolistic Competition’s Firm D: Proportional Demand Curve（比例需求曲线）（客观需求曲线） d: Subjective Demand Curve (主观需求曲线)

  26. Monopolistic Competitor -Short Run 1. MR=MC and The two demand curves intersect at the same point. 2. P≥SAVC

  27. Firm Demand Shifts In and Gets More Elastic. • Demand Shifts Back Because More Firms Enter the Industry, So There is Less Demand Per Firm. • Demand Gets More Elastic Because More Firms Means More Substitutes and More Substitutes Means More Elastic. Long-Run Operation in Monopolistic Competition

  28. Firms will enter and exit until the firms are making exactly zero economic profits. • Two characteristics of monopolistic competition in the long-run: • Price exceeds marginal cost • Price equals average total cost Long-Run Operation in Monopolistic Competition

  29. Long-Run Operation in Monopolistic Competition

  30. They abandon traditional assumptions of new classical economics with Marshall that perfect competition as a universal and monopoly as individual exceptions, they think perfect competition and monopoly are two extreme situations, proposed monopoly competition between the two extremes. main contribution

  31. British, (1903-1983) • Neo Cambridge School(新剑桥学派）, a long-time professor at Cambridge University • the only woman who can be considered a great economist Joan Robinson

  32. Born in 31 October 1903 • Learn economics at Girton College, Cambridge， • Student of Marshal’s • Married economist Austin Robinson in 1926 • Became a lecturer in economics at the University of Cambridge in 1937 • Full professor and fellow of Girton College in 1965. • First female fellow of King's College in 1979 Joan Robinson

  33. The Economics of Imperfect Competition (1933) • An Essay on Marxian Economics (1942) • Accumulation of Capital (1956) • Exercises in Economic Analysis (1960) • Essays in the Theory of Economic Growth (1962) • Economic Philosophy: An essay on the progress of economic thought (1962) • Freedom and Necessity: An introduction to the study of society (1970) • Economic Heresies: Some Old Fashioned Questions in Economic Theory, (1971) • Contributions to Modern Economics, (1978) Major works

  34. 不完全竞争是现实市场中最为普遍的形式 边际收入和边际成本决定价格 厂商具有垄断力量 市场可分的 同一产品在不同市场中的需求弹性不同 会有价格歧视 更关注买方市场而非卖方市场。提出了“买方垄断”（monopsony）这个概念。 The economics of imperfect competition

  35. 要解决单个企业或垄断者的产量和价格决定问题要解决单个企业或垄断者的产量和价格决定问题 漠视平均总成本 注重直接边际成本 均衡条件：MR=MC Equilibrium of the Monopolistic firm

  36. (1)不完全竞争下的均衡： 企业处于个别均衡状态时可获得额外利润条件：MR=MC 企业处于完全均衡状态时,企业没有额外利润 条件：MR=MC AR=AC (2)完全竞争下的均衡：P=MC=MR 竞争均衡

  37. 效用:商品使买主感到值得拥有的那种性质 买方垄断者：单个买主 买主间的完全竞争：1、任何一个买主的采购量变化对该市场总采购量只会产生微不足道的影响 2、卖主对买主一视同仁 In competition, price = MU In monopsony, MC of buyer = MU 边际效用被定义为等于边际成本的某种数量 买方垄断Monopsony

  38. 当处于完全竞争市场条件下时，如果市场价格为4，消费者会购买产品直到价格等于边际效用为止；当处于买方垄断的情形时，买方要得到更多的产品，他就必须要相应地支付更高的价格【因为面临向上倾斜的供给曲线】，此时买方就要考虑边际成本和边际效用之间的大小，他会购买产品直到二者相等为止。当处于完全竞争市场条件下时，如果市场价格为4，消费者会购买产品直到价格等于边际效用为止；当处于买方垄断的情形时，买方要得到更多的产品，他就必须要相应地支付更高的价格【因为面临向上倾斜的供给曲线】，此时买方就要考虑边际成本和边际效用之间的大小，他会购买产品直到二者相等为止。 买方垄断Monopsony

  39. 结论：在买方垄断的情形下，由于面临向上倾斜的产品供给曲线，买方垄断者购买的产品数量比完全竞争条件下要少，支付的价格比完全竞争条件下要低。结论：在买方垄断的情形下，由于面临向上倾斜的产品供给曲线，买方垄断者购买的产品数量比完全竞争条件下要少，支付的价格比完全竞争条件下要低。 其他情况： 1）水平的供给曲线。此时买方垄断情况将与完全竞争情况一致。 2）向下倾斜的供给曲线。此时买方垄断者购买的产品数量会较完全竞争时为多。 买方垄断Monopsony

  40. 例子：如果存在劳动力市场的买方垄断，那么厂商雇佣工人的数量和支付的工资水平将会怎样？例子：如果存在劳动力市场的买方垄断，那么厂商雇佣工人的数量和支付的工资水平将会怎样？ 买方垄断Monopsony

  41. 均衡点在N点，因为此时厂商雇佣工人的边际收益正好等于边际成本。此时对应的雇佣工人数量为A，工资率为L。均衡点在N点，因为此时厂商雇佣工人的边际收益正好等于边际成本。此时对应的雇佣工人数量为A，工资率为L。 结论：1）在买方垄断的劳动力市场中，与完全竞争市场相比，厂商雇佣工人的数量更少、工资更低【完全竞争市场的均衡点为S，对应的雇佣工人数量为B，工资率为K】；2）工人受到剥削，因为其边际收益产品对应的工资率为H，高于其实际工资L。 买方垄断Monopsony

  42. 剥削：一批工人的工资低于他们的按售价计的边际实物产量剥削：一批工人的工资低于他们的按售价计的边际实物产量 产生原因：劳动供给或商品需求缺乏完全弹性 分类: (1)对个别雇主的劳动供给是完全有弹性的时候。这是由于商品的垄断而造成的. (2)当劳动供给是不完全有弹性的时候(商品是在完全竞争的条件下售出） (3)当劳动供给是不完全有弹性的并且雇主在购买劳动时能实行价格歧视 剥削

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