The evolutionary firm and Cournot's Dilemma

Recently, competence/capability has been introduced as a rivaland as a complement to the idea of transaction-costs as thefoundation for a modern theory of the firm. However, while thecompetence-based approach may be inspired by evolutionary economics,it does not, in its current form, provide an evolutionary theoryof the firm. To transform this competence-based approach intoan evolutionary theory, the connection between the firm andVeblen's concept of social knowledge is more fully developed.Once established, the evolutionary theory of the firm is utilisedto bypass Marshall's reconciliation problem and solve Cournot'sDilemma.