"Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to a predictable equilibrium for prices and market shares. Such feedback tends to stabilize the economy because any major changes will be offset by the very reactions they generate. The high oil prices of the 1970s encouraged energy conservation and increased oil exploration, precipitating a predictable drop in prices by the early 1980s. According to conventional theory, the equilibrium marks the “best” outcome possible under the circumstances: the most efficient use and allocation of resources."
Quote Details
Added by wikiquote-import-bot
Unverified quote
0 likes
People from BelfastSystems scientistsGame theoristsStanford University facultyEconomists from Northern Ireland
Original Language: English
Available Languages (1)
Sources
p. 1: Chapter 1. Positive feedback in economics
https://en.wikiquote.org/wiki/W._Brian_Arthur
Revision History
No revisions have been submitted for this quote.
Categories
W. Brian Arthur
17 quotes on TrueQuotesView all quotes by W. Brian Arthur →
Related Quotes
"Right after we published our first findings, we started getting letters from all over the country saying, "You know, …"
"Our understanding of how markets and businesses operate was passed down to us more than a century ago by a handful of…"
"Complexity theory is really a movement of the sciences. Standard sciences tend to see the world as mechanistic. That …"
"As we begin to understand , we begin to understand that we’re part of an ever-changing, interlocking, non-linear, kal…"
"A technology that by chance gains an early lead in adoption may eventually 'corner the market' of potential adopters,…"
"[Market outcomes] depends on the cumulation of random events."
"Where we observe the predominance of one technology or one economic outcome over its competitors we should thus be ca…"
"This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynam…"
"The type of rationality we assume in economics — perfect, logical, deductive rationality — is extremely useful in gen…"
"The inductive-reasoning system I have described above consists of a multitude of “elements” in the form of belief-mod…"