Abstract
Under competitive conditions, a business firm must maximize profit if it is to survive – or so it is often claimed. This purported analogue of biological natural selection has had substantial influence in economic thinking, and the proposition remains influential today. In general, its role has been to serve as an informal auxiliary defence, or crutch, for standard theoretical approaches based on optimization and equilibrium. It appeared explicitly in this role in a provocative passage in Milton Friedman’s famous essay on methodology (Friedman 1953, chapter 1), and it seems that many economists are familiar with it in this context only.
This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman
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Winter, S.G. (1987). Competition and Selection. In: Durlauf, S., Blume, L. (eds) The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_35-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_35-1
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Competition and Selection- Published:
- 27 February 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_35-2
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Competition and Selection- Published:
- 11 October 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_35-1