Journal Article Strategy in Point Voting: Comment Get access Dennis C. Mueller Dennis C. Mueller International Institute of Management, Berlin Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 91, Issue 3, August 1977, Page 509, https://doi.org/10.2307/1885982 Published: 01 August 1977

I. The constitutional stage, 61. — II. The parliamentary stage, 64. — III. The allocation of decisions between the constitutional and parliamentary stages, 70. — IV. Summary of the theory, 77. — V. Implications for democratic reforms, 79.

Journal Article A Theory of Conglomerate Mergers: Reply Get access Dennis C. Mueller Dennis C. Mueller Cornell University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 84, Issue 4, November 1970, Pages 674–679, https://doi.org/10.2307/1880849 Published: 01 November 1970

I. The growth maximization hypothesis, 644. — II. The demand and supply of firms when managers maximize stockholder welfare, 648. — III. The demand and supply of firms when managers and stockholders have different expectations, 653. — IV. Differences in discount rates as a cause of mergers, 654. — V. Growth maximization in light of recent merger history, 657.

I. A general formulation of the model, 59. — II. The choice of dependent variables, 61. — III. The capital investment equation, 64. — IV. The R & D equation, 71. — V. The advertising equation, 74. — VI. The dividends equation, 75. — VII. An appraisal of the model, 77. — VIII. Policy implications of the results, 81. — IX. Conclusion, 84. — Appendix, 84.

FEW WOULD DISAGREE that Adam Smith's invisible-hand theorem is the heart of the economist's Weltanschauung. Ask whether trade barriers should be lowered, the spread of multinational corporations restrained, oil prices deregulated, cartels dissolved, or more fundamentally whether a market-based capitalist system is economically superior to a state-run socialist system, and economists almost certainly will begin to answer the question by trying to apply the theorem. Every student knows that the theorem depends on the assumption of atomistic competition, which in turn assumes that the system is decentralized and that no competitor is large relatively to others. There is another crucial assumption, however, that is often ignored and usually underemphasized, namely that all competition is price competition. In reality one of the most distinctive features of capitalism-one that is most often raised in lay discussions of its merits and demerits-is the prevalence of other forms of competition, such as competition in research, development, and advertising; competition to obtain and hold monopoly; and competition for corporate growth. These various forms of competition, we shall aim to show, are not clearly analogous with the theory of price competition: more non-price competition, rather than less, is not necessarily Pareto optimal. Self-evidently, the production side of a market economy is decentralized only to a limited degree, i.e., to the level of a decision-making unit composed of more than one human. Such a unit-playing Neuron to the Invisible Hand-is typically called a firm. It is in fact a team. Rather than remaining small, firms are in practice composed of any number of individuals from a handful on to half a million. Some

A central question in industrial organization is why profit rates differ so dramatically across firms and industries. One of the many explanations offered for this phenomenon is the failure of conventional accounting methods to adjust for intangible capital stocks, i.e., it is argued that profit rates do not differ dramatically when capital stocks are correctly calculated to include intangible R&D and advertising capital. To test this hypothesis individual advertising capital stocks are calculated for firms in the toys, distilled beverages, cosmetics, and pharmaceuticals industries, and R&D stocks are calculated for the pharmaceuticals firms. The adjustments do not eliminate the wide dispersion in profit rates.