Theory of Value: Chapter 3 (cont'd...Again!)...

Last post on producer theory.  In his end of chapter notes, Debreu makes underlines three things that are not covered by the producer theory that he has described.  I repeat them below as I think they merit attention:

1. External economies and diseconomies: the case where the production set of a producer depends on the production sets of the other producers (and or on the consumptions of consumers).  Both of these cases are, I think, incredibly likely to occur in the real-world.  In fact such interdependencies are well modeled by networks.
2. Increasing returns to scale: one of my new favorite pastimes...these can also be well modeled with networks (although they can be well-modeled via other methods as well).
3. The behavior of producers who do not take prices as given: monopolistic competition...I would go so far as to submit that some form of monopolistic competition is a superior null model of producer behavior than perfect competition.