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dc.contributor.authorDasgupta, Indraneelen_US
dc.description.abstractWe utilize the analytical construct of a stochastic supply function to provide an aggregate representation of a finite collection of standard deterministic supply functions. We introduce a consistency postulate for a stochastic supply function that may be satisfied even if no underlying deterministic supply function is rationalizable in terms of profit maximization. Our consistency postulate is nonetheless equivalent to a stochastic expansion of supply inequality, which summarizes the predictive content of the traditional theory of competitive supply. A number of key results in the deterministic theory follow as special cases from this equivalence. In particular, it yields a probabilistic version of the law of supply, which implies the traditional specification. Our analysis thus provides a necessary and sufficient axiomatic foundation for a de-coupling of the predictive content of the classical theory of competitive firm behavior from its a priori roots in profit maximization, while subsuming the traditional theory as a special case.en_US
dc.publisherInstitute for the Study of Labor (IZA) Bonnen_US
dc.relation.ispartofseriesIZA discussion papers 4018en_US
dc.subject.keywordSupply aggregationen_US
dc.subject.keywordstochastic supply functionen_US
dc.subject.keywordstochastic consistencyen_US
dc.subject.keywordweak axiom of profit maximizationen_US
dc.subject.keywordstochastic supply inequalityen_US
dc.subject.keywordlaw of supplyen_US
dc.subject.stwStochastischer Prozessen_US
dc.subject.stwTheorie der Unternehmungen_US
dc.subject.stwGesamtwirtschaftliches Angeboten_US
dc.subject.stwÖkonomisches Prinzipen_US
dc.titleSupply theory sans profit-maximizationen_US
dc.typeWorking Paperen_US
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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