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IN THEIR INTERESTING PAPER, "External Diseconomies in Consumption and Monopoly Pricing" [3], I. Luski and R. Lusky (LL) have presented a result concerning the respective value of the monopoly price and the socially optimal price of a private good, the consumption of which inflicts external diseconomies. But their presentation is incomplete because they consider a model with only one good freely available, forget to take into account the distribution of income, and limit the proof of the main theorem to a special case. These deficiencies make appreciation of the validity of the result difficult. We shall discuss here the same problem in the framework of the simplest consistent model.

The paper examines the adaptation to be made to the theory of perfect competition when the managers differ with respect to capability and to psychology and maximize a utility function depending not only on profit, but also on production levels, on amount of search for information and on levels of effort. After a description of the equilibrium of a firm confronted with a situation in which it cannot influence the prices and an analysis of the reaction of this firm to a change in its selling price, the paper studies perfect competition when the number of firms is given, considers the entry of new firms on the market and reintroduces the shareholders and the staff members. The essential result is that the conditions of the market equilibrium are gready influenced by the attitudes of the managers and of the candidates to management, attitudes which are themselves partly determined by the cultural norms of the society.

The paper examines the behaviour of a profit-maximizing firm which forecasts a recession and which has at its disposal to regulate its level of equipment and its level of employment three control variables (investment, recruitment, firing), the selling price being held constant. It shows that (i) the expectation of a recession by a firm is enough to launch a real recession in the demand for production factors (equipment and recruitment); (ii) by comparison with a situation in which the firm may manipulate the selling price, price rigidities imply the occurrence of excess capacity — in addition, they do not allow the firm to delay firing and induce a stronger irregularity in recruitment and firing, and (iii) depending on the characteristics of the firm and of the environment a unique model is compatible with a whole variety of behavioural patterns.

This paper is a contribution to the analysis of business policies with respect to labour. It considers the case of a firm which only develops through self-financing and combines labour and equipment to obtain a production sold on the market in exchange of random proceeds. The firm may invest in equipment or distribute dividends; it may recruit or dismiss staff, but, in case of firing, it has to pay a compensation proportional to wages. If the cash position of the firm falls to zero, the firm is bankrupt and dies. The firm's optimal strategies are examined for different criteria.

The paper presents a growth model based on three essential assumptions: perfect knowledge of the future, descreasing returns on investment in a stagnant economy, appearance of new investment possibilities with the growth of the economy. Two cases are considered: the self-financing growth and the borrowing situation in the context of two management policies, the maximization of the discounted flow of dividends and the maximization of the growth rate.

The paper studies with the help of a model the investment and employment policy through a business cycle for a firm which maximizes its discounted income and assumes that the forecasts are perfectly correct. In addition to investment and wages costs, the firm has to bear recruitment and firing costs; it has at its disposal four control variables: the selling price, the recruitment rate, the firing rate and the investment rate. The firm's strategy appears to be generally a sequence of elementary policies. This sequence highly depends on the relative values of parameters like the rate of depreciation of equipment, the natural rate of decrease of employment, the ratio of the unit recruitment and firing cost with respect to the wage rate, the rate of decrease of demand during recession. The results obtained are, on the whole, quite consistent with the behaviours which have been observed in the last years, and explain some of the features of recessions.

In spite of the existence of many stimulating publications, the study of market dynamics still lacks rigour and coherence. The paper develops a family of models in which (i) buyers and sellers have initially no information on the conditions prevailing on the market but acquire progressively this information out of their own observations, (ii) buyers look for retailers in order to buy at the lowest possible price, (iii) every seller chooses at the beginning of a period the quantity he will put on sale and at which price. The interest of the paper is to give precise conditions under which the market converges towards a stable state and to show that, depending on some assumptions, these stable states exhibit very different properties, since they may be multiple or unique and characterized by a price dispersion or by a single price, this price being the monopoly price, the perfect competition price or a price in between.

1. The study of growth policies of firms has raised, in the last ten years, an increasing interest among economists (see for instance, among others, [2], [4], [5], [7]), but the analysis has generally been developed in the context of a non-inflationary economy. The purpose of this paper is to explore some aspects of the problem when the firm belongs to an inflationary economy. For the sake of simplicity, it is assumed throughout that the firm knows the future perfectly' and that the inflation rate is certain, constant and everlasting from the origin of time through infinity. Such an extreme hypothesis about inflation is justified by the fact that more realistic models, though implying longer mathematical developments, lead to policies which are " approximately" the same during the inflation period. In our model there are three reasons why inflation makes a difference to growth strategies