FROM IMPERFECT TO PERFECT COMPETITION: A PARAMETRIC APPROACH THROUGH CONJECTURAL VARIATIONS

This paper features perfect competition under a parametric approach. We consider conjectural variations in a pure exchange economy where strategic interactions hold. We show, through an example, that the conjectural general equilibrium can coincide with the competitive equilibrium, independently of a replication procedure or an asymptotic identification. Additionally, the competitive equilibrium is a locally consistent conjectural general equilibrium. Perfect competition is defined at equilibrium. Copyright © 2010 The Author. The Manchester School © 2010 Blackwell Publishing Ltd and The University of Manchester.