The New Palgrave Dictionary of Economics

Living Edition
| Editors: Palgrave Macmillan

Competition and Selection

  • Sidney G. Winter
Living reference work entry

Latest version View entry history



The claim that a business firm must maximize profit if it is to survive serves as an informal statement of the common conclusion of a class of theorems characterizing explicit models of economic selection processes. Such models, by making explicit the strong assumptions needed to generate this sort of result, are the basis for a critique of standard economic theory which relies on competitive equilibrium. Models of Schumpeterian competition, emphasizing the centrality of innovation, plainly provide a much better description of the world we live in than do models of static equilibrium.


Adjustment, dynamic vs static Alchian, A. Behavioural change Comparative statics Competition and selection Competitive equilibrium Constant returns to scale Decreasing returns to scale Diminishing returns Entrepreneurial rents Entrepreneurship Evolutionary economics Fixed factors Friedman, M. Increasing returns to scale Innovation Latent productivity Market power Mimicry theorems Natural selection Neoclassical growth theory Patents Present value Profit maximization Research and development Rules of behaviour Satisficing Schumpeter, J. Schumpeterian competition Selection equilibrium Simon, H. Static equilibrium Survival of the fittest Technological opportunity Winter, S. G. 

JEL Classifications

This is a preview of subscription content, log in to check access.


  1. Alchian, A.A. 1950. Uncertainty, evolution and economic theory. Journal of Political Economy 58: 211–221.CrossRefGoogle Scholar
  2. Dasgupta, P. 1985. The theory of technological competition. In New developments in the analysis of market structure, ed. J. Stiglitz and G.F. Mathewson. Cambridge, MA: MIT Press.Google Scholar
  3. Friedman, M. 1953. Essays in positive economics. Chicago: University of Chicago Press.Google Scholar
  4. Kamien, M., and N. Schwartz. 1981. Market structure and innovation. Cambridge: Cambridge University Press.Google Scholar
  5. Nelson, R., and S. Winter. 1982. An evolutionary theory of economic change. Cambridge, MA: The Belknap Press of Harvard University Press.Google Scholar
  6. Phillips, A. 1971. Technology and market structure: A Study of the Aircraft Industry. Lexington: D.C. Heath.Google Scholar
  7. Schumpeter, J.A. 1912. The theory of economic development. Trans. Redvers Opie. Cambridge, MA: Harvard University Press, 1934.Google Scholar
  8. Schumpeter, J.A. 1950. Capitalism, socialism and democracy, 3rd ed. New York: Harper.Google Scholar
  9. Simon, H. 1955. A behavioral model of rational choice. Quarterly Journal of Economics 69: 99–118.CrossRefGoogle Scholar
  10. Winter, S.G. 1964. Economic ‘natural selection’ and the theory of the firm. Yale Economic Essays 4(1): 225–272.Google Scholar
  11. Winter, S.G. 1971. Satisficing, selection and the innovating remnant. Quarterly Journal of Economics 85: 237–261.CrossRefGoogle Scholar
  12. Winter, S.G. 1984. Schumpeterian competition in alternative technological regimes. Journal of Economic Behaviour and Organization 5(3–4): 287–320.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2008

Authors and Affiliations

  • Sidney G. Winter
    • 1
  1. 1.