The concepts of "rational conjectures" and "reasonable conjectures" are cr itically reviewed. It is shown that their operation depends crucially on an invisible, nonoptimizing "deus ex machina." Hence, these con cepts are not really suitable for understanding competition among opt imizing firms....

Two perspectives on the price system are examined, as a method of valuation represented by Walrasian equilibrium and as a means of appropriation represented by “perfectly competitive equilibrium.” The stronger requirements of perfectly competitive equilibrium emphasize that valuation is...

From the perspective of the Walrasian general equilibrium model, entrepreneurial and opportunistic behavior seems foreign. Can the model be refashioned so that it can accommodate such behavior? Many would say no, but we argue the contrary. Indeed, we present a reformulation of the model that...