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Concluding Note

  • Paul R. Ferguson
  • Glenys J. Ferguson

Abstract

After many years with few developments of note, since the mid-1970s industrial economics has evolved — and continues to evolve — in several directions. Neoclassical microeconomics remains well entrenched as the dominant body of theory underpinning industrial economics, but is being continually refined and modified. It is often argued that, in following the neoclassical tradition, industrial economics (along with microeconomics in general) took the ‘wrong road’. For example, Nelson and Winter consider:

What today’s orthodoxy represents is, above all, a particular (and not inevitable) refinement and elaboration of the core ideas from that broader tradition relating to market functioning and self interested behaviour. The price paid for the refinement has been a considerable narrowing of focus and a tendency to segregate from the main corpus of theory the questions and phenomena for which the refined theory is ill-suited (1982, p. 43).

In seeking to replace the traditional approach, the new institutional economics has developed. Some economists have emphasised the role of transaction costs, incorporating an important feature of the real world into theory.

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Copyright information

© Paul R. Ferguson and Glenys J. Ferguson 1994

Authors and Affiliations

  • Paul R. Ferguson
  • Glenys J. Ferguson

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