Substitution and output effects in the neoclassical theory of the firm under imperfect competition

Since 1938, it has been established that the effect produced by a variation in an input price on the use of another input can be decomposed into a substitution effect and an output effect (or scale effect). Nevertheless, this distinction is still denied today by many authors. Here, one tries to establish in which manner imperfect competition in the product market alters the respective importance of substitution and output effects. Some implications are then derived about alternative manners of defining substitutability and complementarity between inputs.