Hotelling, Harold (18951973)

Kenneth J. Arrow
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Alternate versions available: 1987 Edition
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Abstract

Harold Hotelling was devoted mainly to mathematical statistics but had a deep influence on economics. His famous 1929 paper on stability in competition introduced the notions of locational equilibrium in duopoly, with implications for political competition. His application of the calculus of variations to the allocation of a fixed stock over time formed the basis of subsequent work on the subject. In his 1938 presidential address to the Econometric Society he argued that marginal-cost pricing was necessary for Pareto optimality even for decreasing-cost industries, and showed that suitable line integrals were a generalization of consumers’ and producers’ surplus for many commodities.
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How to cite this article

Arrow, Kenneth J. "Hotelling, Harold (1895–1973)." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 26 November 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_H000089> doi:10.1057/9780230226203.0747

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