DBpedia – Linked Data Fragments

Matches in DBpedia 2016-04 for { <http://dbpedia.org/resource/Uncertainty,_Evolution,_and_Economic_Theory> ?p ?o }

• Uncertainty,_Evolution,_and_Economic_Theory abstract "“Uncertainty, Evolution, and Economic Theory” is an article written in 1950 by economist Armen Alchian (1914-2013). In this article Alchian delineates an evolutionary approach to describe firms’ behavior. His theory embodies principles of biological evolution and natural selection. This article is among the first in the economics literature to analogize between success and survival in the market with the mechanism of variation and natural selection postulated in evolutionary biology. He reasoned that the survival of a few firms from a large number of firms that entered the market may be due to random entrepreneurial decisions rather than brilliance or cunning. Success and survival rests upon the market’s response to the firm’s products; entrepreneurial decision-making cannot be tied to an explicit maximizing objective because the future is not known, and, at best, it is a mish-mash of probabilistic outcomes. The evolutionary approach to firm survival and behavior means that firms do not have to consciously strive to maximize profits; scarcity and competition ensure that firms that do survive will behave as if they were maximizing profits. Much like the survival of heliophiliac plants only those plants that do get sunshine will survive; no one says that plants intentionally seek sunlight. Still surviving plants will have (on average) acquired more sunlight than plants that did not survive. This explanation contrasts starkly with the mainstream picture of accurate foresight and perfect rationality often ascribed to economic actors.Alchian dismisses profit maximization and utility maximization as meaningful attributes of firms’ survival. He argues that uncertainty and probabilistic outcomes make the maximization of any objective function meaningless. Alchian states that uncertainty arises from two sources: imperfect foresight and human inability to solve complex problems with a host of variables. Uncertainty and a combination of random behavior and foresight lead to probability distributions of outcomes (profits/losses) rather than a unique outcome. Consequently any objective function has to incorporate both returns AND attitudes towards risk, but an objective function cannot incorporate a non-objective function (which is what preferences for risk are) and still be an objective function. Success and viability depend on implementing strategies that yield positive profits; similar to natural selection firms realizing negative profits are more likely to be culled from the population regardless of managerial aspirations. In the long run this leads to a population of firms appearing to share discernible criteria ascribable to successful firms. Competing firms that mimic the behavior of successful/surviving firms will appear to be consciously maximizing profits even though their strategies were developed in the absence of the aforementioned criteria. Alchian notes that the successful firms may not consciously maximize profits but act as if they do because market forces cull firms that fail to yield positive returns. What the goals of the entrepreneurs of successful firms are is not relevant. Market forces affect firm profitability, and in retrospect the historical record will show surviving firms behaving as if the firms had information and foresight. Firms which quickly emulate successful firms (by definition survivors of the market forces) will increase their chances of survival. Whereas firms that fail to adapt, or do so slowly, risk a greater likelihood of failure. Surviving firms evolve in the direction of the more economically profitable firms. Evolution and competition for scarce resources ensure that, in practice, firms do not have to consciously maximize an objective function. Alchian concludes that, despite uncertainty and the lack of knowledge by market participants, economists can still analyze the behavior of firms using the assumptions of profit maximization. The prerequisites for survival in the long run are returns greater than costs, profits in other words. In retrospect economists can compare alternatives and predict which behaviors were more conducive for survival even though such knowledge was unavailable to contemporaneous firms.".
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageExternalLink 1827159.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageID "39252254".
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageLength "7118".
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageOutDegree "16".
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageRevisionID "633142587".
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Armen_Alchian.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Arthur_S._De_Vany.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Category:Articles_created_via_the_Article_Wizard.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Category:Economics_comparisons.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Evolutionary_economics.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Harold_Demsetz.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Marginalism.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Natural_selection.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Neo-Darwinism.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Profit_maximization.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink RAND_Corporation.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Ronald_Fisher.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Sidney_G._Winter.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Stanford_University.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink Utility.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLink W._Allen_Wallis.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageWikiLinkText "Uncertainty, Evolution, and Economic Theory".
• Uncertainty,_Evolution,_and_Economic_Theory date "November 2014".
• Uncertainty,_Evolution,_and_Economic_Theory reason "structure, formatting, copyediting".
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageUsesTemplate Template:Cleanup.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageUsesTemplate Template:Italic_title.
• Uncertainty,_Evolution,_and_Economic_Theory wikiPageUsesTemplate Template:No_footnotes.
• Uncertainty,_Evolution,_and_Economic_Theory subject Category:Articles_created_via_the_Article_Wizard.
• Uncertainty,_Evolution,_and_Economic_Theory subject Category:Economics_comparisons.
• Uncertainty,_Evolution,_and_Economic_Theory hypernym Article.
• Uncertainty,_Evolution,_and_Economic_Theory type Person.
• Uncertainty,_Evolution,_and_Economic_Theory comment "“Uncertainty, Evolution, and Economic Theory” is an article written in 1950 by economist Armen Alchian (1914-2013). In this article Alchian delineates an evolutionary approach to describe firms’ behavior. His theory embodies principles of biological evolution and natural selection. This article is among the first in the economics literature to analogize between success and survival in the market with the mechanism of variation and natural selection postulated in evolutionary biology.".
• Uncertainty,_Evolution,_and_Economic_Theory label "Uncertainty, Evolution, and Economic Theory".
• Uncertainty,_Evolution,_and_Economic_Theory sameAs Q17148774.
• Uncertainty,_Evolution,_and_Economic_Theory sameAs m.0t_c_nr.
• Uncertainty,_Evolution,_and_Economic_Theory sameAs Q17148774.
• Uncertainty,_Evolution,_and_Economic_Theory wasDerivedFrom Uncertainty,_Evolution,_and_Economic_Theory?oldid=633142587.
• Uncertainty,_Evolution,_and_Economic_Theory isPrimaryTopicOf Uncertainty,_Evolution,_and_Economic_Theory.