Talk:Steve Keen
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I added some elaboration to the part about MR=MC not maximizing firm's profits. It is somewhat "original research". However, no serious economist would bother with publishing results which debunk Keen's circular claim since it involves fairly elementary logic, hence no citation. Furthermore, all it takes to see it is just working through Keen's math as provided in his paper. And finally I'm pretty sure the relevant result that Keen calls "The Stigler Conjecture" is due to Cournot - but in a different context in which he shows that the equilibrium of his model involves lower aggregate profits than monopoly profit - but I don't have the reference handy. Hence the [citation needed] tag, while I look it up.radek 04:02, 19 November 2006 (UTC)
Ok, here's the issue with the whole Mr=Mc thing. If you work through Keen's "proof" (which is mathematically correct) then you see that what he's showing is that if every firm sets (its own) marginal revenue equal to (its own) marginal cost then INDUSTRY profits are not maximized. Instead if firms choose their quantities according to his rule, industry profits would be maximized, each firm getting a share that would be higher if it followed the mr=mc rule. But this ASSUMES that firms collude and act as a single monopolist, which Neoclassical theory DOES NOT ASSUME, so he's proving something totally different. So, while mathematically correct, the "proof" doesn't show what Keen claims it shows. This isn't subject to debate, it's there plainly to see in his paper for anyone who bothers to work through the math. In fact, this is a major problem with Keen who very often makes a particular claim, then goes on to prove something completely different and then says that he has just proved his original claim. In fact Keen's rule is not an equilibrium since at those quantity any one firm would have an incentive to produce more, and get higher profits at expanse of all the others. I don't know how to write this into the article without POV or OR. What are standard policies in the case where something is untrue (like say, creationism) but continues to be believed by some people? Can we say that it is subject of debate, or is leaving out the details POV itself?radek 03:02, 22 November 2006 (UTC)
The webpage usually is in Top 50 (as it was today => 49th). Keen's website says it hit top 6 in June 2006. So if it goes up again and stabilizes 'around' top 20 or so I'll put it back at Top 20. AlexIvanov2 21:00, 22 November 2006 (UTC)
I don't know, this "Top 20" thing just smacks of promotion and advertising which is not the purpose of an encyclopedia. If you go to, say, Paul Krugman's wikipage (or any other economists wikipage) you don't see anything about the Yahoo, Google, or Amazon ranks of his books. And anyway, if you were to put this in, shouldn't it rather be Google, widely recognized as a much more better search engine?radek 00:50, 23 November 2006 (UTC)
As Krugman is quite famous (coed of New York Times!) he don't need rankings-info on him to be published. But, since Keen and his critique are new it is neccessary to present the reader with the significance Keen (or his page) has. Also, it's TopFIFTY, not Top20 anymore. Radek, you've put forward a bunch of "explanations" why the paper is wrong. I don't see how they can possibly save neoclassical theory. Can you provide an actual disproof instead of just verbal rejoinders? AlexIvanov2 16:41, 23 November 2006 (UTC)
Alex, 1. I don't think the purpose of wikipedia is to serve as a promotion website for a commercial book. I don't see ANY other author's wikipages making reference to their Yahoo ranking. Also, even if it was to be included I don't see why it should be Yahoo rather than Google which is generally used as a standard (you haven't addressed this) and he's barely holding on in that top 50 - when I just checked he was 51. Are we supposed to be updating this as it fluctuates? Or should we just say top 100? This is more trouble than it's worth, and leaving it in there will be misleading.
2. Alright, I'm giving up because this isn't worth a revert war. My "explanations" however were correct and adequate. I never said Keen made a mathematical mistake - so there's nothing to "disprove". He just isn't proving what he claims he is proving. For example in his paper Keen writes that the Neoclassical/Marshallian model claims that "the market demand function has the dual properties that P'(Q)<0 and P'(qi)=0 for large n". He then goes on to prove, correctly, that since Q=sum_q_i this cannot be true. BUT THE MARSHALLIAN MODEL DOESN'T CLAIM THAT P'(qi)=0!!!!!!! It assumes that firms are price takers which is a different thing all together! See Straw_man
3. With respect to the mr=mc I think I explained adequately what's going on, but you feel the need to remove it. This again is another instance of Keen claiming that neoclassical theory says one thing, then proving something completely else (he does this with the DMS theorem as well). It's true that if each firm sets (its own) mr = (its own) mc then INDUSTRY profits are not maximized - if all firms could agree (i.e. collude) to restrict their output they would all make higher profits. INDUSTRY profits get maximized where Industry MR = Industry MC, this is all that Keen shows with his formula, but this has been known since Cournot. But if, as in standard neoclassical theory (actually this isn't even perfect competition but the Cournot model - again, Keen confuses/obfuscates things), you do NOT assume that firms can collude then at Keen's solution each individual firm has an incentive to expand its own input to increase profits. But when all firms do that market price falls and profits decline until you get to the "true" equilibrium where, guess what, each firm sets (its own) mr = (its own) mc.
4. Like I said I don't know about the journal he published it in. Obviously it is not an economic journal. It may be respected in other fields, but the fact that they published this means that they have no idea what economic theory is or what it says. Keen pulled a fast one on them it's as simple as that, whether delibratly or in good, ignorant, faith.
5. I'm thinking that as it is the article does not provide the reader with an honest version of the situation. There should be at least a POV tag.
