Advances in Spatial Science - Editorial Board Manfred M. Fischer Geoffrey J.D. Hewings Phần 10

Phương pháp tiếp cận của ông giới hạn sử dụng những sự kiện cách điệu và hiểu biết lý thuyết để dự đoán, trong giới hạn dự kiến, giá đầu ra cân bằng nên nói dối - và thông qua mô hình chính thức để phân tích và thử nghiệm cho một thực tế như vậy giới hạn phạm vi của kết quả mong đợi.
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Advances in Spatial Science - Editorial Board Manfred M. Fischer Geoffrey J.D. Hewings Phần 1015 European Competition and Industrial Policy 347very important contribution towards marrying formal modelling with reality. His‘bounds’ approach employs stylised facts and theoretical insights to predict where,within expected bounds, price-output equilibrium should lie – and adopts formalmodelling to analyse and test for such a reality-bound range of expected outcomes. In the absence of perfect competition or perfect contestability, there exists scopefor the government to step in to restore perfectly competitive conditions. A problemhere is that in the absence of perfect competition across all industries in theeconomy, intervention in one market is not guaranteed to improve efficiency (theproblem of “second best”) except under rather restrictive assumptions (Gilbert andNewberry 1982). This limits the power of IO to provide useful public policyprescriptions, which is its purported aim. The above is just one of the problems of the microeconomic and IO approach.Other related problems relate to restrictive assumptions (which include perfectinformation/knowledge, optimizing behaviour, inter-firm co-operation being seenmainly as price collusion, and technology/innovations being exogenous, or at bestinfluenced by the type of market structure). In this context perfect competition ineffect implies the absence of any competition at all.4 In addition, the whole focus onefficient allocation of scarce resources ignores the fundamental issue of resource-creation. While changes in resource allocation can lead to changes in resource-creation, it is far from evident that the efficient resource allocation at any given timeis the only way to affect resource-creation. Indeed resource-creation is automati-cally related to inter-temporal issues, which poses another problem for the neo-classical perspective – its focus is on comparative statics, not on inter-temporalefficiency. The last mentioned involves knowledge and innovation which the neo-classical view considers to be exogenously given (Baumol 1991). The difficulties of the IO perspective to deal with knowledge and innovation andtherefore with inter-temporal efficiency (the theme of the founding father ofeconomics Adam Smith and many leading economists since), led IO scholarssuch as Baumol (1991) (the inventor of contestability theory), to lament the sub-optimal properties or “perfect competition” and “perfect contestability”, as regardsinnovation, thus dynamic inter-temporal economic performance. A reason, Baumolobserved, echoing Schumpeter (1942), is that both these types of market structureremove the incentive to innovate, which is of course the above-competitive rates ofreturn (or escaping the ‘zero-profit’ trap (Augier and Teece 2008)). The usefulness of the neo-classical IO perspective has been questioned widely,both from within and from without economics. From within, “managerial theories”drew on Berle and Means’ (1932) classic statement of separation of ownership fromcontrol to claim that controlling professional managers maximize their own utility,not profits. This includes sales, discretionary expenditures, growth and other (seeMarris 1996). Subsequent developments in economics tried to address the resultantproblem of “agency” between different intra-firm groups, such as owners and4 For an account of alternative approaches to competition and competition policy within andwithout IO, see Hunt (2000), Pitelis (2007b).348 I. Glykou and C.N. Pitelismanagers, (for example, Alchian and Demsetz 1972; Jensen and Meckling 1976).The emergent “agency” literature gradually became the foundation of the “share-holder value” approach to corporate governance that stresses the importance ofowner’s pursuit of profits (see Pitelis 2004 and below). In contrast to IO, Schumpeter suggested that competition should be viewed as aprocess of creative destruction through innovation, not a type of market structure.Hayek (1945) pointed to the efficiency of markets, in terms not of allocativeefficiency, attributed to perfectly competitive structures, but instead in terms oftheir ability to address the problem of coordination in the presence of dispersedknowledge. Cyert and March’s (1963) classic book questioned the ability of firms tomaximize profits, in the presence of uncertainty, and intra-firm conflict. Theysuggested “satisficing” as a better objective of firms. Coase (1937) lamented thefailure of mainstream theory to enter the “black box” (the firm), while Penrose(1959) pointed to the failure of mainstream theory to deal with the issue of firmgrowth. Building on Penrose, Richardson (1972) viewed co-operation, not just on aform of price collusion, but like a mode of organising production, simi ...