ECON 1 Lecture Notes - Lecture 16: Earnings Management, Allocative Efficiency, Switching Barriers
Document Summary
Which addresses what functions various elements of the economic system perform in order to create equilibrium for the entire system: voluntarism is a paradigm. Which emphasises the primacy of the will. Scp/s2. 0cp: atomistic structure vs. oligopolistic structure, structure = heavily concentrated (wwcr8>80 in most markets, functionalist economists look at consumer welfare effects behaviour is fully determined, structuralist economists look at effects on behaviour behaviour is underdetermined. The effects on market prices in the industry ( competitive prices lead to optimal allocation of resources") The effects on internal efficiency of the firm ( least cost production for given quality") The effects on innovative output of the firm ( demand-pull or technology push") Orthodox assumptions and scp: given certain cost relationships, structure will automatically become optimal ( comp. Market clearing": certain structures will automatically generate certain modes of conduct (functionalism: those modes that serve the economy, assumption: cost functions are known, assumption: inefficiency will be punished in the market for corporate control.
