W. Brian Arthur Quote

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.


p. 1: Chapter 1. Positive feedback in economics - Increasing Returns and Path Dependence in the Economy, (1994)

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Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to...

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Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to...

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Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to...

Picture Quote 4

Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to...