The Sylos Postulate reconsidered

Abstract

This chapter makes a textual comparison between the 1957 2nd Italian edition and the 1962 1st American edition of Oligopoly and Technical Progress, showing that Sylos Labini added to the later edition some fresh sections concerning new firms’ entry and incumbents’ reaction which partially contradict Modigliani’s 1958 presentation of the Sylos Postulate. The theoretical differences between Sylos Labini and Modigliani with regard to the assumption of constant output are traced back to their different modelling strategies on how to tackle the issue of external firms’ conjectures in determining the long-run oligopoly equilibrium price.