NEIL M. KAY
- Published in print:
- 2000
- Published Online:
- October 2011
- ISBN:
- 9780199242115
- eISBN:
- 9780191697005
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199242115.003.0002
- Subject:
- Business and Management, Strategy, Organization Studies
This chapter focuses on neoclassical theory, the mainstream economics approach that has proved a robust and enduring foundation for analysis of prices and markets. It argues that alternative theories ...
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This chapter focuses on neoclassical theory, the mainstream economics approach that has proved a robust and enduring foundation for analysis of prices and markets. It argues that alternative theories of the firm have typically been characterized by a hub-and-spoke relationship to the traditional or neoclassical theory of the firm. The agenda of neoclassical theory is concerned with questions relating to optimal product-market price. Spoke theories tend to deal with selected modifications to the neoclassical agenda, and this can lead to other elements of the neoclassical agenda appearing as default features on spokes. The chapter also reviews some of the important contributions of the four spoke theories (bounded rationality, resources, hierarchy, and technological change) and their possible relevance to the analysis of the boundaries of the firm.Less
This chapter focuses on neoclassical theory, the mainstream economics approach that has proved a robust and enduring foundation for analysis of prices and markets. It argues that alternative theories of the firm have typically been characterized by a hub-and-spoke relationship to the traditional or neoclassical theory of the firm. The agenda of neoclassical theory is concerned with questions relating to optimal product-market price. Spoke theories tend to deal with selected modifications to the neoclassical agenda, and this can lead to other elements of the neoclassical agenda appearing as default features on spokes. The chapter also reviews some of the important contributions of the four spoke theories (bounded rationality, resources, hierarchy, and technological change) and their possible relevance to the analysis of the boundaries of the firm.
