What Economists Know That Managers Don’t (and Vice Versa)
Harvard Business Review
NOVEMBER 6, 2014
The section on the profit maximization hypothesis at the end of the introductory chapter of his classic 1988 textbook on industrial organization concludes by saying that even if a firm doesn’t maximize profits, it can be treated, for the purposes of many of its interactions with the outside world, as if it does. Even Tirole betrays this bias.
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