Document Type

Article

Publication Date

5-2020

Abstract

"The 1870s marginal revolution in economics culminated a century later in a failure. The core utility maximization principle of this school of thought was shown to have no interesting implication for aggregate market behavior in general (Sonnenschein, 1972, 1973a, 1973b; Debreu, 1974; Mantel, 1974; Kirman, 1989; Shafer & Sonnenschein, 1993; Rizvi, 2006). We argue that neoclassical price theory was flawed from the beginning, owing to the more basic and more serious logical problem inherent to the axiom of price taking behavior, under which market price formation is left unexplained."

Comments

ESI Working Paper 20-19

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