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Open problems in the foundations of price formation dynamics

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Abstract

The aim of the present paper is to attack some of the conceptual problems that arise when the framework of mathematical learning theory is applied to the description of the behavior of the firm, in setting prices and production quotas, in a competitive market. The goal is to depict the process by which the firm fixes prices and production quotas as a stochastic learning process. A solution to such problems is proposed which is based on statistical-decision concepts. The conceptualization of the behavior of the firm by means of concepts pertaining to mathematical learning theory gives rise to certain mathematical problems, which are formulated here in rather precise terms.

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References

  • Fuchs, G.: 1979, ‘Is Error Learning Behaviour Stabilizing?’, Journal of Economic Theory 20,

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  • Suppes, P.: 1959, ‘Stimulus Sampling Theory for a Continuum of Responses’, in K. J. Arrow, S. Karlin, and P. Suppes (eds.), Mathematical Methods in the Social Sciences, Stanford University Press, Stanford.

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  • Suppes, P. and Atkinson, R. C.: 1960, Markov Learning Models for Multiperson Interactions, Stanford University Press, Stanford.

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  • Suppes, P. and Carlsmith, J. M.: 1962, ‘Experimental Analysis of a Duopoly Situation from the Standpoint of Mathematical Learning Theory’, International Economic Review 3.

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Authors and Affiliations

  1. Instituto de Investigaciones Filosóficas, Universidad Nacional Autónoma de México, 04510, México, DF, México

    Adolfo García de la Sienra

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  1. Adolfo García de la Sienra
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Additional information

I am glad to acknowledge the support given to the research project leading to the present paper by the National University of Mexico, through the DGAPA, as well as by Tilburg's Catholic University (Holland). I appreciate also the fruitful comments and suggestions made to me by Dr Gustavo Valencia (Facultad de Ciencias, University of Mexico) in connection with some of the topics presented in this paper.

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de la Sienra, A.G. Open problems in the foundations of price formation dynamics. Erkenntnis 30, 87–99 (1989). https://doi.org/10.1007/BF00184817

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  • DOI: https://doi.org/10.1007/BF00184817

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