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Alchian (1950) quotes Tintner who advanced the most powerful argument against the neoclassical assumption of highly rational, profit maximizing entrepreneurs. Tintner's proof contained which argument(s):
- Alchian (1950) quotes Tintner who advanced the most powerful argument against the neoclassical assumption of highly rational, profit maximizing entrepreneurs. Tintner's proof contained which argument(s):
- Under uncertainty each action that is chosen can be identified with a distribution of potential outcomes - not with a unique outcome
- Under uncertainty, more than one outcome might materialize for any given action (though only one does and that one outcome cannot be foreseen)
- Implicit in uncertainty is the consequence that the subjective distributions of potential outcomes overlap.
- All of the above combine to prove that "profit maximization" is an meaningless guide to behavior under uncertainty
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