Conclusions

Abstract

In responding to the challenge of justifying the existence of equilibria after abandoning individual market participants’ rationality, this book has presented a series of analytical models applying the Darwinian evolutionary idea of natural selection to the markets to examine the occurrence of the perfectly competitive equilibrium, monopolistically competitive equilibrium, and informationally efficient equilibrium in various contexts. The model in Chap. 2 concludes that the perfectly competitive equilibrium can be achieved without assuming that firms are purposively maximizing their profits. The model in Chap. 3 proves that the monopolistically competitive equilibrium can emerge as a long run aggregate market outcome even if firms are totally irrational. Both models in Chaps. 2 and 3 assume that firms are totally irrational in the sense that firms enter the industry regardless of the existence of profits; firms’ outputs are randomly determined rather than generated from profit maximization problems; and firms exit the industry if their wealth is negative.