Firms, Strategies and Economic Change Austrian economics meets comparative institutional analysis by way of Frank Knightyu's

Like its predecessor – Firms, Governments and Economic Change ( Yu, 2001 ) – this new book originates from Yu's dissatisfaction with the axiomatic optimization-and-equilibrium framework, which he sees as dominating the theory of industrial and economic organization as well as the theory and practice of business strategy. The most succinct statement of the framework that I think Yu takes issue with probably remains that of Vilfredo Pareto: “[A] full representation of the individual's preferences … is sufficient to determine economic equilibrium. The individual can disappear as long as he leaves us a photograph of his preferences” ( Pareto, 1927, p. 170 , my translation). But whereas in the previous book Yu mostly studied the role of governments vis-à-vis firms and innovation, in this new book Yu mostly studies the role of long run business planning vis-à-vis firms and innovation.