This paper addresses the reduction of market failure under imperfect competition. It proposes a taxscheme that provides firms with an incentive to forgo their market power: Firms optimize after-tax profits. Now simply consider a firm ´s gross profit margin the unique tax-rate it is charged on...

The model of perfect competition is one of the most famous, most important, and most misunderstood concepts in economics. Rather than aiming to be a full-blown model of real-world competitive markets, the perfect competition model isolates the decentralized coordination mechanism inherent in all...

The model of perfect competition from the perspective of an active learner. The story told about the competitive process is shown to be problematic when students try to reconstruct it for themselves. In particular it has great potential to generate cognitive dissonance. An alternative approach...

Microeconomic principles courses focus on perfectly competitive markets far more than other market structures. Perhaps this is because perfect competition: (1) describes many important real world markets; or, (2) usefully approximates many markets that are not literally perfectly competitive; or...

This paper studies an exchange economy with a finite number of agents in which each agent is initially endowed with a finite number of (personalized) indivisible commodities. We observe that the core equivalence theorem may not hold for this economy when the coalitional form game is generated in...

Perfectly competitive economies are economic models with many agents, each of whom is relatively insignificant. This chapter studies the relations between the basic economic concept of competitive (or Walrasian ) equilibrium , and the game-theoretic solution concept of value . It includes the...