Re: Markets and Diversity

[enilsson@xxxxxxxxx]

Michael wrote,
> In his presidential address to the American Economic Association,
> Sherwin Rosen claimed that one of the benefits of the market is
> its ability to provide diversity.

Do you suppose Rosen thinks this result (markets provide diversity) is derived
from the neoclassical model or is it just part of the pre-analytic vision? I'm
not sure what in the neoclassical model would lead to the diversity claim
unless it was based on product differentiation. But conclusions about product
differentiation is about the number of different versions of the product and
not about the range of products provided.

That is, if the theoretical products range from 1 to 10, product
differentiation might appear as a models 4.1, 4.2, 4.3, and 4.4. But it might
not lead to any 3s or 5s. Rosen might be thinking that a large number of
different models means that a large range of products exists. But I don't
think that the former implies the latter

ERic
/