ABSTRACT
This chapter examines the most renowned sect, the theory of perfect competition, from the viewpoint that whether strategic phenomena can be treated as a legitimate research problem within the theory in taking its problem area and hard core assumptions as given. The problem of the mystery of market order remained as a link between classics and neoclassics. However, in practice, the most important research question in neoclassical paradigm has been the question of what conditions will suffice to ensure that such an equilibrium is possible. The four hard core assumptions form the common ground from which proponents of neoclassical school proceed. Under the conditions of single-exit situations managerial decision making becomes simply a calculation of the best choice, leaving no room for real strategic 'discretion'. In developing the new paradigm, it was Edgeworth who was the first to attempt to examine systematically and define 'perfect competition'.
