Foundations of a Pure Cost Theory

Heinrich von Stackelberg's book, "Grundlagen einer reinen Kostentheorie", published in 1932 was at the forefront of a growing conceptual revolution in the theory of the firm, a theory which appears more relevant than ever in today’s economic climate. In this work, Stackelberg masterfully built a theoretical framework which he later developed in Market Structure and Equilibrium.

Foundations of a Pure Cost Theory represents the first translation of the original German version into English. This substantial book offers readers a critical and technical understanding of the firm, how firms function and the environments in which they operate. Fundamental notions of cost production, market economy, optimum position and velocities of production are given prominence. Ultimately, this work, which remains largely unknown, can be seen as a milestone text in our understanding of the strategies adopted by firms as a whole.

The book has been meticulously translated from the German into English, retaining the author’s examples in their historical context and capturing the spirit of the time with all its subtlety and significance.

• Cost Production
• Market Economy
• Optimal Position
• Velocities of Production

The bulk of the literature of the history of economic ideas has given too little attention to Heinrich von Stackelberg’s work. The present volume may help us to address this latter shortcoming. Clearly a labor of love, it offers the members of our discipline a new opportunity to gain a better understanding of developments in economics near the time this book was written. – Prof. William J. Baumol, academic director of Berkley Center for Entrepreneurship and Innovation, New York University and Professor emeritus, Princeton University, USA

On reading the book I was truly impressed by Stackelberg’s analysis of costs of production. The economics profession, and especially students of the history of economic thought, owe the translators much gratitude for their work in making this book available in English and drawing renewed attention to it.  – Prof. Avinash K.  Dixit, Professor emeritus, Princeton University, USA

 Originally published in 1934, Heinrich Freiherr von Stackelberg’s “Foundation of a Pure Cost Theory” was written at a time when what Leonid Hurwicz euphemistically called ‘literary economics’ prevailed. This classic book illustrates how, by using mathematics as a language to clarify and sharpen, Stackelberg was one of a small number of economists along with Hicks and Samuelson who in the 1930s transformed economics into a rigorous quantitative subject that can legitimately call itself a science. – Prof. Thomas J. Sargent, New York University, USA and Nobel Prize Winner in Economic Sciences in 2011

• Bonn, Germany

  Heinrich von Stackelberg

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