DOES THE COMPARATIVE ADVANTAGE THEORY OF COMPETITION REALLY REPLACE THE NEOCLASSICAL THEORY OF PERFECT COMPETITION

The Comparative Advantage Theory of Competition (CATC) is proposed by Hunt and Morgan (1995) to replace the Neoclassical Theory of Perfect C ompetition (NTPC). The new theory claims to offer a better explanation for key macro and micro phenomena. The authors' purpose in this artic le is to evaluate the CATC's potential as a replacement for the neocla ssical theory. They argue that (1) both the NTPC and CATC are offshoot s of the exchange paradigm; furthermore, (2) the efficient theories in the exchange paradigm family cannot claim superiority over one anothe r since a supracriterion for their contest is lacking; and (3) the CAT C - even when considered efficient - cannot challenge the NTPC, let al one replace it. In addition to meeting a host of conditions, a success ful contender must come from a new paradigm, which the CATC does not. Therefore, the replacement assertion remains unjustified.