An Entropy Theory of Value : With Reflections on the Arrow-Debreu Model

Value theory is the foundation of economic theory. Marginal utility theory value is the dominant value theory. The Arrow-Debreu model, which is built on the utility theory of value, forms the mathematical foundation of general equilibrium theory. But the Arrow-Debreu model doesn’t describe economic reality well. We present a mathematical formulation of an entropy theory of value. It describes economic activities accurately. The entropy theory of value is a non-equilibrium theory. In particular, it explains the importance of monopoly and oligopoly in economic and social life