Econ 5502

Econ 5502 Advanced Microeconomic Analysis

Spring 2013

By Professor Frederic S. Lee

[Download the syllabus in pdf]

Lecture: Tuesday, 7.00-9.45, Cockefair Hall 104

Required Texts:

Optional Text:

  • H. R. Varian, Microeconomic Analysis
  • G. A. Jehle and P. J. Reny, Advanced Microeconomic Theory, 2nd                                    edition
  • T. Lawson, Reorienting Economics

Support Material:

Web sites to help students build their mathematical skills:

Assessment: 

[Download Sample Exams]

  • Take-Home Problem 1 due on February 12, 2013—worth 5 % of your grade.
  • In-class technical exam on consumer and demand theory on February 26,                            2013—worth 15% of your final grade
  • In-class Exam I covers parts II – IV, neoclassical microeconomics on March 12, 2013—worth 25% of your final grade
  • Take-Home Problem 2 due on April 2, 2013—worth 5 % of your grade.
  • In-class technical exam on production, costs, and the perfect competition   on April 16, 2013—worth 15% of your final grade
  • Take-Home Problem 3 due on April 30, 2013—worth 5 % of your grade.
  • Final Exam covers parts V – VI , heterodox microeconomics (May 14, 2013 from 8.00p.m. – 10.00p.m.)—worth 30% of your final grade

Problem Sets:

Course Description:   The course provides a critical survey of neoclassical microeconomic theory, including methodology, demand theory, production and costs theory, theory of competitive and non-competitive markets, distribution, welfare, and general equilibrium.

COURSE OUTLINE AND READING LIST

“Well, in our country, “ said Alice, still panting a little, “you’d generally get somewhere else—if you ran very fast for a long time….”  “A slow sort of country!” said the Queen.  “Now here, you see, it takes all the running you can do to keep in the same place.  If you want to get somewhere else, you must run at least twice as fast as that!”  Through the Looking-Glass

I.  Introduction

  1. Lee, Neoclassical Microeconomics Lecture Notes, ch. 1.

II. Defining Economics, Methodology, and Models

“In our country,” she remarked, “there’s only one day at a time.”  The Red Queen said “That’s a poor thin way of doing things.  Now here, we mostly have days and nights two or three at a time….” Through the Looking-Glass

A.  Marshall on Defining Economics and Methodology

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part I, ch. 2.
  2. Marshall, A.  1972.  Principles of Economics.  8th Edition.  London:  The Macmillan Press Ltd., Books I and II.
  3. Raffaelli, T.  2003.  Marshall’s Evolutionary Economics. London:  Routledge.

B. Defining Modern Economics, Methodology, and Models

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part I, ch. 3.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 1.
  3. Silberberg and Suen, The Structure of Economics, chs. 1 – 6.
  4. Gibbard, A. and Varian, H. R.  1978.  “Economic Models.”  The Journal of Philosophy 75.11 (November):  664 – 677.
  5. Robbins, L.  1932.  An Essay on the Nature and Significance of Economic Science.  London:  Macmillan and Co.  Lionel Robbins’s essay can be downloaded from http://www.mises.org/books/robbinsessay2.pdf.
  6. Friedman, M.  1953.  “The Methodology of Positive Economics.”  In Essays in Positive Economics, pp. 3 – 43.  Chicago:  The University of Chicago Press.
  7. Backhouse, R. E. and Medema, S. G.  2009.  “On the Definition of Economics,” Journal of Economic Perspectives 23.1:  221-33.

C. Criticisms

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part II, ch. 6.
  2. Lawson, T.  2003.  Reorienting Economics.  London:  Routledge, ch.1.
  3. Mirowski, P.  2011.  “The Unreasonable Efficacy of Mathematics in Modern Economics.” In Philosophy of Economics, edited by U. Maki, pp. 159-197.  Amsterdam:  Elsevier.
  4. Lawson, T.  1997.  Economics and Reality.  London:  Routledge, part II.
  5. Bigo, V.  2008.  “Explaining Modern Economics (as a microcosm of society),” Cambridge Journal of Economics 32.4:  527-554.
  6. Matthaei, J.  1984.  “Rethinking Scarcity:  Neoclassicism, NeoMalthusianism, and NeoMarxism.”  Review of Radical Political Economics 16.2/3 (Fall):  81 – 94.
  7. Polanyi, K.  1968.  “The Economy as Instituted Process.”  In Primitive, Archaic and Modern Economies:  Essays of Karl Polanyi, pp. 139 – 174.  Edited by G. Dalton.  Garden City:  Doubleday and Co.

III.  Theory of Consumer Behavior and Demand

“Living backwards!” Alice repeated in great astonishment.  “I never heard of such a thing!”  “__but there’s one great advantage in it, that one’s memory works both ways.”  “I’m sure mine only works one way,” Alice remarked.  “I can’t remember things before they happen.”  “It’s a poor sort of memory that only works backwards,” the Queen remarked.  “What sort of things do you remember best?” Alice ventured to ask.  “Oh, things that happened the week after next,” the Queen replied in a careless tone.  Through the Looking-Glass

 

A. Marshallian Analysis of Demand

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part II, ch. 5.
  2. Marshall, Principles of Economics, Book III.
  3. Parsons, T.  1931.  “Wants and Activities in Marshall.”  Quarterly Journal of Economics 46 (November):  101 – 140.
  4. Shove, G. F.  1942.  “The Place of Marshall’s Principles in the Development of Economic Theory.”  The Economic Journal 52 (December):  294 – 329.
  5. Martinoia, R.  2003.  “That Which is Desired, Which Pleases, and Which Satisfies:  Utility According to Alfred Marshall.”  Journal of the History of Economic Thought 25.3 (September):  349 – 364.

B. Modern Utility and Preference Theory

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part II, ch. 6.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 3.
  3. Silberberg and Suen, The Structure of Economics, pp. 252 –  272.
  4. Varian, Microeconomic Analysis, pp.  94 – 115.
  5. Deaton, A. Muellbauer, J.  1980.  Economics and Consumer Behaviour.  Cambridge:  Cambridge University Press, pp. 1 – 47.
  6. Hicks, J. R.  1946. Value and Capital.  Oxford:  Clarendon Press, pp. 11 – 25.
  7.  Phlips, L.  1974.  Applied Consumption Analysis.  New York:  American Elsevier Publishing Co., Inc., ch. 1.
  8. Wong, S.  1978.  The Foundations of Paul Samuelson’s Revealed Preference Theory:  A Study by the Method of Rational Reconstruction.  London:  Routledge & Kegan Paul, Ltd., ch. 3.
  9. Jehle and Reny, Advanced Microeconomic Theory, ch. 1.1-1.2

C. Consumer Demand Theory

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part II, ch. 7.
  2. Nicholson and Snyder, Microeconomic Theory, chs. 4-6.
  3. Silberberg and Suen, The Structure of Economics, pp.  272 – 297.
  4. Varian, Microeconomic Analysis, pp.  116 – 143.
  5. Hicks, J. R.  1946. Value and Capital.  Oxford:  Clarendon Press, pp. 26 –41.
  6. Phlips, L.  1974.  Applied Consumption Analysis.  New York:  American Elsevier Publishing Co., Inc., ch. 2.
  7. Stigler, G. J. and Becker, G. S.  1977.  “De Gustibus Non Est Disputandum.”  American Economic Review 67.2 (March):  76 – 90.
  8. Jehle and Reny, Advanced Microeconomic Theory, ch. 1.3-1.5

D. Special Topics in Consumer Demand Theory

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part II, ch. 8.
  2. Silberberg and Suen, The Structure of Economics, pp.  297 – 299, 304 – 306, 314 – 332.
  3. Varian, Microeconomic Analysis, pp.  144 – 159.
  4. Deaton and Muellbauer, Economics and Consumer Behaviour, pp. 37 – 42, 47 – 53, and 119 – 147.
  5. Phlips, L.  1974.  Applied Consumption Analysis.  New York:  American Elsevier Publishing Co., Inc., ch. 3.
  6. Hicks, J. R.  1946. Value and Capital.  Oxford:  Clarendon Press, pp. 42 – 52.
  7. Samuelson, P. A.  1948.  “Consumption Theory in Terms of Revealed Preference.”  Economica 15 (November):  243 – 253.
  8. Jehle and Reny, Advanced Microeconomic Theory, ch. 2.

E. Market Demand Curve

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part II, ch. 7.
  2. Deaton and Muellbauer, Economics and Consumer Behaviour, ch. 6.
  3. Varian, Microeconomic Analysis, ch. 9.4.

F. Criticisms

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part II, ch. 9.
  2. Keen, S.  2001.  Debunking Economics, New York City:  St. Martin’s Press, ch. 2.
  3. Rizvi, S.  1998.  “Responses to Arbitrariness in Contemporary Economics.”  In New Economics and Its History, pp. 272 – 288.  Edited by J. B. Davis.  Durham:  Duke University Press.
  4. Rizvi, S.  2001.  “Preference Formation and the Axioms of Choice.”  Review of Political Economy 13.2 (April):  141 – 159.
  5. Sippel, R.  1997.  “An Experiment on the Pure Theory of Consumer’s Behaviour.”  The Economic Journal 107 (September):  1431 – 1444.
  6. Drakopoulos, S. A.  1994.  “Hierarchical Choice in Economics.”  Journal of Economic Surveys 8.2:  133 – 153.
  7. Veblen, T.  1909.  “The Limitations of Marginal Utility.”  Journal of Political Economy 17 (November):  620 – 636.
  8. Drakopoulos, S. A. and Karayiannis, A. D.  2004.  “The Historical Development of Hierarchical Behavior in Economic Thought.”  Journal of the History of Economic Thought 26.3:  363–78.
  9. Berg, N. and Gigerenzer, G.  2010.  “As-If Behavioral Economics:  Neoclassical Economics in Disguise?”  History of Economic Ideas 18.1:  133-165.
  10. Muramatsu, R.  2009.  “The Death and Resurrection of ‘Economics with Psychology’:  remarks from a methodological standpoint.”  Brazilian Journal of Political Economy, 29.1:  62-81.
  11. Fine, B.  “Consumers and Demand”.

IV. Theory of Production and Costs

“There’s no use trying,” she said:  “one ca’nt believe impossible things.”  I daresay you haven’t had much practice,” said the Queen.  “When I was your age, I always did it for half-an-hour a day.  Why, sometimes I’ve believed as many as six impossible things before breakfast.”

Through the Looking-Glass

A. Marshall’s Analysis of Supply

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part III, ch. 10.
  2. Marshall, Principles of Economics, Book IV.
  3. Wicksteed, P. H.  1914.  “The Scope and Method of Political Economy in the light of the `marginal’ theory of value and of distribution.”  The Economic Journal 24 (March):  1 – 23.

B. Theory of Production

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part III, chs. 11.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 9.
  3. Varian, Microeconomic Analysis, pp. 1 – 24.
  4. Ferguson, C. E.  1969.  The Neoclassical Theory of Production and Distribution.  Cambridge:  Cambridge University Press, chs. 1 and 4.
  5. Maxwell, W. D.  1965.  “Short-Run Returns to Scale and the Production of Services.”  Southern Economic Journal (July):  1 – 14.
  6. Jehle and Reny, Advanced Microeconomic Theory, ch. 3.1-3.2.

C. Theory of Costs:  Changes in the Level of Output

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part III, ch. 12.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 10.
  3. Varian, Microeconomic Analysis, pp. 49 – 81.
  4. Ferguson, C. E.  1969.  The Neoclassical Theory of Production and Distribution.  Cambridge:  Cambridge University Press, chs. 6 and 7.
  5. Silberberg and Suen, The Structure of Economics, pp. 175 – 224.
  6. Viner, J.  1952.  “Cost Curves and Supply Curves.  In A.E.A. Readings in Price Theory, pp. 198 – 232.  Edited by G. J. Stigler and K. E. Boulding.  Chicago:  Richard D. Irwin, Inc.
  7. Maxwell, W. D.  1969.  “Production Theory and Cost Curves.”  Applied Economics 1:  211 – 224.
  8. Larson, B.  1991.  “A Dilemma in the Theory of Short-Run Production and Cost.”  Southern Economic Journal 58.2 (October):  465 – 474.
  9. Jehle and Reny, Advanced Microeconomic Theory, ch. 3.3.

D. Special Topics in Production and Cost Theory

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part III, ch. 13.
  2. Ferguson, C. E.  1969.  The Neoclassical Theory of Production and Distribution.  Cambridge:  Cambridge University Press, chs. 2, 3, 5, 8, and 9.
  3. Silberberg, The Structure of Economics, pp.  225 – 251.
  4. Varian, Microeconomic Analysis, pp. 82 – 93.
  5. Jehle and Reny, Advanced Microeconomic Theory, ch. 3.4.

E. Criticisms

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part III, ch. 14.
  2. Keen, Debunking Economics, ch. 3.
  3. Aslanbeigui, N. and Naples, M. I.  1996.  “Scissors or Horizon: Neoclassical Debates about Returns to Scale, Costs, and Long-Run Supply, 1926 – 1942.”  Southern Economic Journal 64.2:  517 – 530.
  4. Yordon, W. J.  1970.  “The Short-Run Cost Function in Manufacturing.”  Quarterly Review of Economics and Statistics 10:  55 – 67.
  5. Steedman, I.  1988.  “Sraffian Interdependence and Partial Equilibrium Analysis.”  Cambridge Journal of Economics 12.1 (March):  85 – 95.
  6. Dean, J.  1976.  Statistical Cost Estimation.  Bloomington:  Indiana University Press, pp. 3 – 35.

V. Price Theory, Firm, and Market Stricture:  Perfect Competition

“Mr. Robertson’s remedy is to discard mathematics, and he suggests that my remedy is to discard the facts; perhaps I ought to have explained that, in the circumstances, I think it is Marshall’s theory that should be discarded.” (P. Sraffa, 1930).

A.  Marshall’s Theory of Prices

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part IV, ch. 15.
  2. Marshall, Principles of Economics, Book V and Appendix H.
  3. Hart, N.  1996.  “Marshall’s Theory of Value:  the role of external economies.”  Cambridge Journal of Economics 20 (May):  353 – 370.
  4. Hart, N.  2003.  “Marshall’s Dilemma:  Equilibrium versus Evolution.”  Journal of Economic Issues 37.4 (December):  1139 – 1160.

B. The Years of Turmoil, 1920 – 1933

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part IV, ch. 16.
  2. Sraffa, P.  1925.  “On the Relation Between Cost and Quantity Produced.”
  3. Roncaglia, A.  1991.  “Sraffa’s 1925 Article and Marshall’s Theory.”  Quaderni di Storia dell’Economia Politica 9.1-2:  373 – 397.
  4. Panico, C.  1991.  “Some Notes on Marshallian Supply Functions.”  The Economic Journal 101 (May):  557 – 569.
  5. Maneschi, A.  1986.  “A Comparative Evaluation of Sraffa’s `The Laws of Returns under Competitive Conditions,’ and its Italian Precursor.”  Cambridge Journal of Economics 10 (March):  1 – 12.
  6. Pigou, A. C.  1928.  “Analysis of Supply.”  The Economic Journal 38 (June):  188 – 197.
  7. Robbins, L.  1928.  “The Representative Firm.”  The Economic Journal 38 (September):  387 – 404.
  8. “Increasing Returns and the Representative Firm:  A Symposium.”  1930. The Economic Journal 40 (March):  79 – 116.
  9. Harrod, R.  1972.  Economic Essays. Second Edition.  London:  The Macmillan Press Ltd., chs. 3 – 5.
  10. Mongiovi, G.  1996.  “Sraffa’s Critique of Marshall:  a reassessment.”  Cambridge Journal of Economics 20 (March):  207 – 224.
  11. Marcuzzo, M. C.  1994.  “R. F. Kahn and Imperfect Competition.”  Cambridge Journal of Economics 18 (February):  25 – 40.
  12. O’Shaughnessy, T. J.  1994.  “Kahn on the Economics of the Short Period.”  Cambridge Journal of Economics 18 (February):  41 – 54.
  13. Aslanbeigui, N. and Naples, M. I.  1997.  “Scissors or Horizon: Neoclassical Debates about Returns to Scale, Costs, and Long-Run Supply, 1926 – 1942.”  Southern Economic Journal 64.2:  517 – 530.
  14. Freni, G.  2001.  “Sraffa’s Early Contribution to Competitive Price Theory.”  European Journal of the History of Economic Thought 8.3 (Autumn):  363 – 390.
  15. Robbins, L.  1930.  “On the Elasticity of Demand for Income in Terms of Effort.”  Economica 29 (June):  123 – 129.
  16. Roncaglia, A.  2005.  The Wealth of Ideas:  A History of Economic Thought.  Cambridge:  Cambridge University Press, ch. 16.

C.  Perfect Competition and the Supply Curve

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part IV, ch. 17.
  2. Nicholson and Snyder, Microeconomic Theory, chs. 11-12.
  3. Varian, Microeconomic Analysis, pp. 25 – 48, 215 – 235.
  4. Kaldor, N.  1934.  “The Equilibrium of the Firm.”  The Economic Journal 44  (March):  60 – 76.
  5. Jaffe, W.  1967.  “Walras’ Theory of Tatonnement:  A Critique of Recent Interpretations.”  The Journal of Political Economy 75:  1 – 19
  6. Walker, D. A.  1973.  “Edgeworth’s Theory of Recontracts.”  The Economic Journal 83:  138 – 149.
  7. Robinson, J.  1966.  Collected Economic Papers Vol. 1.  Oxford:  Basil Blackwell, pp. 20 – 34.
  8. Jehle and Reny, Advanced Microeconomic Theory, ch. 3.5, 4.1, 4.3.

D.  Criticisms

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part IV, ch. 18.
  2. Keen, Debunking Economics, ch. 3.
  3. Ozanne, A.  1996.  “Do Supply Curves Slope Up?  The Empirical Relevance of the Sraffian Critique of  Neoclassical Production Economics.”  Cambridge Journal of Economics 20.6 (November):  749 – 762.

VI. Price Theory, Firm, and Market Structure:  Monopoly, Imperfect       Competition, and Oligopoly

A. Monopoly

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part V, ch. 19.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 14.
  3. Varian, Microeconomic Analysis, pp. 236 – 259.

B.  Monopolistic/Imperfect Competition

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part V, ch. 20.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 15.
  3. Chamberlin, The Theory of Monopolistic Competition, chs. 4, 5, 6, 7, and 9.
  4. Robinson, J.  1938.  The Economics of Imperfect Competition.  London:  Macmillan and Co., Ltd., chs. 1 – 14.
  5. Harrod, R.  1972.  Economic Essays. Second Edition.  London:  The Macmillan Press Ltd., chs. 7 – 8.
  6. Kaldor, N.  1960.  Essays on Value and Distribution.  Glencoe:  The Free Press, chs. 3 – 5.
  7.  Pigou, A. C.  1933.  “A Note on Imperfect Competition.”  The Economic Journal 43 (March):  108 – 112.
  8. Robinson, J.  1966.  Collected Economic Papers Vol. 1.  Oxford:  Basil Blackwell, pp. 35 – 43.
  9. Sherrard, A.  1951.  “Advertising, Product Variation, and the Limits of Economics.”  Journal of Political Economy 59 (April):  126 – 142.
  10. Keppler, J. H.  1998.  “The Genesis of ‘Positive Economics’ and the Rejection of Monopolistic Competition Theory:  A Methodological Debate.”  Cambridge Journal of Economics 22.3 (May):  261 – 276.
  11. Jehle and Reny, Advanced Microeconomic Theory, ch. 4.2.3.

C. Oligopoly

  1.  Lee, Neoclassical Microeconomics Lecture Notes, Part V, ch. 21.
  2.  Nicholson and Snyder, Microeconomic Theory, ch. 15.
  3. Varian, Microeconomic Analysis, pp. 285 – 313.
  4. Chamberlin, The Theory of Monopolistic Competition, ch. 3.
  5. Hall, R. L. and Hitch, C. J.  1939.  “Price Theory and Business Behaviour.”  Oxford Economic Papers 2 (May):  12 – 45.
  6. Lerner, A. P.  1934.  “The Concept of Monopoly and the Measurement of Monopoly Power.”  The Review of Economic Studies 1 (June):  157 – 175.
  7. Stigler, G. J.  1968.  The Organization of Industry.  Homewood:  Richard D. Irwin, Inc., chs. 5, 9, and 18.
  8. Koutsoyiannis, A.  1979.  Modern Microeconomics. Second edition. London:  Macmillan, chs. 9 – 14.
  9. Jehle and Reny, Advanced Microeconomic Theory, ch. 4.2.

D.  Market Structure and Performance

E.  Behavioral and Managerial Theories of the Firm

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part V, ch. 23.
  2. Koutsoyiannis, A.  1979.  Modern Microeconomics.  Second edition.  London:  Macmillian, chs. 15 – 18.
  3. Scitovsky, T.  1943.  “A Note on Profit Maximization and its Implications.”  The Review of Economic Studies 11 (Winter):  57 – 60.
  4. Machlup, F.  1967.  “Theories of the Firm:  Marginalist, Behavioral, Managerial.”  The American Economic Review 57 (March):  1 – 33.
  5. Baumol, W. J.  1958.  “On the Theory of Oligopoly.”  Economica 25 (August):  187 – 198.
  6. Baumol, W. J.  1962.  “On the Theory of the Expansion of the Firm.”  The American Economic Review 52 (December):  1078 – 1087.
  7. Marris, R. L.  1963.  “A Model of the Managerial Enterprise.”  Quarterly Journal of Economics 77 (May):  185 – 209.
  8. Williamson, J.  1966.  “Profit, Growth and Sales Maximization.”  Economica 33 (February):  1 – 16.
  9. Cyert, R. M. and March, J. G.  1963.  A Behavioral Theory of the Firm. Englewood Cliffs:  Prentice-Hall, Inc., chs. 1 – 9.

F.  Game Theory

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part V, ch. 24.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 15.
  3.  Fisher, F. M.  1989.  “Games Economists Play:  A Noncooperative View.”  Rand Journal of Economics 20.1 (Spring):  113 – 124.
  4. Varian, Microeconomic Analysis, ch. 15.
  5. Rizvi, S. A. T.  1994b.  “Game Theory to the Rescue?”  Contributions to Political Economy 13:  1 – 28.
  6. Jehle and Reny, Advanced Microeconomic Theory, ch. 7.
  7. Bunge, M.  1996.  Finding Philosophy in Social Science.  New Haven:  Yale University Press, ch. 14.
  8. Bunge, M.  1999.  The Sociology-Philosophy Connection.  New Brunswick:  Transaction Publishers, ch. 5.

G. Problems with Marginalism

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part V, ch. 25.
  2. Keen, Debunking Economics, ch.4.
  3. Lee, F. S.  1984.  “The Marginalist Controversy and the Demise of Full Cost Pricing.”  Journal of Economic Issues 18 (December):  1107 – 1132.
  4. Lee, F. S. and Irving-Lessmann, J.  1992.  “The Fate of an Errant Hypothesis:  The Doctrine of Normal-Cost Prices.”  History of Political Economy 24.2:  273 – 309.
  5. Hodgson, G. M.  1993.  “Institutional Economics:  Surveying the ‘Old’ and the ‘New’.”  Metroeconomica 44.1:  1 – 28.

VII. Factor Input Markets and Distribution

A.  Marshall and the Marginal Productivity Theory of Distribution

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VI, ch. 26.

B. Demand and Supply of Factor Inputs Under Competitive Conditions

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VI, ch. 27.
  2. Nicholson and Snyder, Microeconomic Theory, chs. 16-17.
  3. Michl, T. R.  1987.  “Is There Evidence for a Marginalist Demand for Labor.”  Cambridge Journal of Economics 11 (December):  361 – 373.

C. Demand and Supply of Factor Inputs Under Non-Competitive Conditions

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VI, ch. 28.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 16-17.

D. Distribution of Income

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VI, ch. 29.

E.  Criticisms

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VI, ch. 30.
  2. Fleetwood, S.  2006.  “Rethinking Labour markets:  a critical-realist-socioeconomic perspective.”  Capital and Class 89 (Summer):  59 – 89.

VIII.  General Equilibrium and Welfare Economics

A.  General Equilibrium

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VII, chs. 31-34.
  2. Nicholson and Snyder, Microeconomic Theory, ch. 13.
  3.  Walsh and Gram, Classical and Neoclassical Theories of General Equilibrium, chs. 6 – 10, 14.
  4. Ingrao, B. and Israel, G.  1990.  The Invisible Hand:  Economic Equilibrium in the History of Science.  Cambridge:  The MIT Press, chs. 1, 4, 7, 10 – 12.
  5. Punzo, L. F.  1989.  “Von Neumann and Karl Menger’s Mathematical Colloquium.”  In John von Neumann and Modern Economics, pp. 29 – 65.  Edited by M. Dore, S. Chakravarty, and R. Goodwin.  Oxford:  Clarendon Press.
  6. Koopmans, T. C.  1957.  Three Essays on the State of Economic Science.  New York City:  McGraw-Hill Book Company, Inc., ch. 1.
  7. Weintraub, E. R.  2002.  How Economics Became a Mathematical Science.  Durham:  Duke University Press, chs. 1 – 4.
  8. Weintraub, E. R. and Mirowski, P.  1994.  “The Pure and the Applied:  Bourbakism Comes to Mathematical Economics.”  Science in Context 7.2 Summer):  245 – 272.
  9. Punzo, L. F.  1991.  “The School of Mathematical Formalism and the Viennese Circle of Mathematical Economists.”  Journal of the History of Economic Thought13.1 (Spring):  1 – 18.
  10. Giocoli, N.  2003.  “Fixing the Point:  The Contribution of Early Game Theory to the Tool-Box of Modern Economics.”  The Journal of Economic Methodology 10.1 (March):  1 – 39.
  11. Silberberg and Suen, The Structure of Economics, chs. 17 – 18.
  12. Varian, Microeconomic Analysis, chs. 17 and 21.
  13. Jehle and Reny, Advanced Microeconomic Theory, ch. 5.

B. Welfare Economics

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VII, ch. 35.
  2. Varian, Microeconomic Analysis, chs. 17 and 22.
  3. Silberberg and Suen, The Structure of Economics, ch. 19.
  4. Jehle and Reny, Advanced Microeconomic Theory, ch. 6.

C. Criticisms

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VII, ch. 36.
  2. Ackerman, F.  2002.  “Still Dead After all these Years:  Interpreting the Failure of General Equilibrium Theory.”  Journal of Economic Methodology 9.2:  119 – 139.
  3. Montes, L.  2003.  “Smith and Newton:  Some Methodological Issues Concerning General Economic Equilibrium Theory.”  Cambridge Journal of Economics 27.5 (September):  623 – 646.
  4. Clower, R. W.  1995.  “Axiomatics in Economics.”  Southern Economic Journal 62.2 (October):  307 – 319.
  5. Rizvi, S. A. T.  1991.  “Specialisation and the Existence Problem in General Equilibrium Theory.”  Contributions to Political Economy 10:  1 – 20.
  6. Rizvi, S. A. T.  1994.  “The Microfoundations Project in General Equilibrium Theory.”  Cambridge Journal of Economics 18.4 (August):  357 – 377.

IX. Neoclassical Microeconomics Theory, Mainstream Economics, and Economic Science

What we cannot speak about we must pass over in silence.

Tractatus Logico-Philosophicus

  1. Lee, Neoclassical Microeconomics Lecture Notes, Part VIII, ch. 37.
  2. Mahner, M.  2007.  “Demarcating Science from Non-Science.”  In T. Kuipers (ed.)  Handbook of the Philosophy of Science:  General Philosophy of Science – Focal Issues, 515-75.  Amsterdam:  Elsevier.
  3. Bunge, M.  1998.  Social Science under Debate:  a philosophical debate.  Toronto:  University of Toronto Press, ch. 3.
  4. Bunge, M.  1983.  Epistemology and Methodology II:  Understanding the World.  Dordrecht:  D. Reidel Publishing Company, chs. 13-15.
  5. Carter, S.  2011.  “C.E. Ferguson and the Neoclassical Theory of Capital:  A Matter of Faith.”  Review of Political Economy 23.3:  339-56.
  6. Ferraro, F., Pfeffer, J., and Sutton, R. I.  2005.  “Economics Language and Assumptions:  How theories can become self-fulfilling.”  Academy of Management Review, 30.1: 8-24