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Rubinstein2005-page102 - convenience I don’t think this...

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October 21, 2005 12:18 master Sheet number 100 Page number 84 84 Lecture Seven Figure 7.3 Cost Minimization. are various empirically plausible alternative targets for a producer. For example, it seems that the goal of some producers is to increase production subject to not incurring a loss. Some firms are managed so as to increase the managers’ salaries with less regard for the level of profits. I sometimes wonder why this difference exists between the gen- erality of consumer preferences and the narrowness of the producer objectives. It might be that this is simply the result of mathematical
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Unformatted text preview: convenience. I don’t think this is a result of an ideological con-spiracy. But, by making pro±t maximization the key assumption about producer behavior, do we not run the risk that students will interpret it to be the exclusive normative criterion guiding a ±rm’s actions? Bibliographic Notes Recommended readings : Kreps 1990, Chapter 8; Mas-Colell et al. 1995, Chapter 5, A–D,G. The material in this lecture (apart from the discussion) is standard and can be found in any microeconomics textbook. Debreu (1959) is an excellent source....
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