Chamberlain's classic work, now in its eighth edition, continues to influence the fundamental thinking of economists and businessmen, and for the best of reasons: It is a basic treatise in theory which, unlike traditional theories of “perfect competition,” deals with the economic world we live in, including both price and nonprice competition, oligopoly, various degrees of monopoly, “differentiated” products, advertising, etc. Its influence has spread extensively as well as intensively—to new theoretical problems, such as economic dynamics and development, and to the analysis of an increasingly wide range of the so-called “applied” fields.
In this eighth edition of The Theory of Monopolistic Competition Professor Chamberlain has added three new appendices: The Definition of Selling Costs; Numbers and Elasticities; and The Origin and Early Development of Monopolistic Competition Theory. The index has been extensively revised and expanded. In successive earlier editions the author compiled a bibliography of 1497 items. He also added a new treatment of the cost curve of the firm, discussing in particular some current misconceptions as to the role of the laws of proportions and of the divisibility of factors in relation to economics and diseconomies of scale, and advancing a broader theory which assigns to both proportions and scale their proper roles.
Professor Chamberlain’s theory of monopolistic competition is both a new theory of prices, the resultant of monopolistic and competitive forces, and a general reassessment of the theory of the firm, the author introducing new variables alongside the traditional price variable. These characteristics show the work’s originality and explain why, in his preface to the French edition, Professor Perroux speaks of Professor Chamberlain’s ‘General Theory’… His book begins where the traditional theory of value leaves off.
The establishment of a multiple, rather than a double classification of markets was the most far-reaching contribution of the new theory. It meant, although it wasn’t wholly foreseen at the time, the end of the faith in competition in the old sense. Now there were alternatives to the implausible assumption of competition without going to the implausible case of monopoly. The competition of many sellers, like the control of a market by one, soon came to be regarded as an extreme or limiting case.
[Its success]…was as much due to the force and brilliance of the exposition as it was to the maturity of the scientific situation. The work claimed to reconstruct the whole of value theory by blending or fusing the hitherto separate theories of monopoly and competition. Nor was this all. It also claimed to teach a new economic Weltanschauung from the standpoint of which practically all economic problems appear in a new light… A whole literature that amplified and applied these contributions followed in its wake.
- 410 pages
- Harvard University Press
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