A General Theory of Competition develops a ground-breaking new theory of competition - `resource-advantage theory'. Recent thinking on competition has assumed the premises, structure and implications of the theory of perfect competition. In his long-awaited book Shelby Hunt draws on economics, management, marketing and sociology to articulate resource-advantage theory. The author proceeds to illustrate how and why his theory may be used to explain and predict economic phenomena with great accuracy. This volume is extremely well-referenced, with detailed source notes.
Chapter 5: Resource-Advantage Theory: Foundational Premises
Resource-Advantage Theory: Foundational Premises
All theories are derived from their foundational postulates. Table 5.1 displays the foundational premises underlying the standard treatment of perfect competition found in microeconomics texts (e.g., Gould & Lazear 1989) and compares them with those that are posited for resource-advantage theory. Foundational, as used here, implies not that the premises are the minimum set of axioms required for deriving theorems but that these premises are centrally important for understanding the two theories. Epistemologically, each premise in R-A theory—contrasted with perfect competition—is considered a candidate for empirical testing. Those found false should be replaced with ones more descriptively accurate.
|TABLE 5.1 Foundational Premises of Perfect Competition and Resource-Advantage Theory|
|Perfect Competition||Resource-Advantage Theory Theory|
|P1. Demand is:||Heterogeneous across industries, homogeneous within industries, and ...|