Oxford Studies in the Price Mechanism

Abstract

Published originally in the Economic Journal in 1952, it is a review article, in which Kahn marked himself out from approaches alternative to those based on marginal analysis, not accepting explanations of the price-formation mechanism of the descriptive type or based on a hypothesis of non-“rational” behaviour. In fact, he unfailingly considered profit maximization as the one certain rule upon which to build economic analysis, but interpreted the pursuit of maximum profit by firms as tantamount to a “trial and error” method rather than as a manifestation of an optimizing rationality on the part of entrepreneurs.