Economics Dictionary of ArgumentsHome
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| Competition: Competition is a rivalry or contest between individuals or groups striving for a common goal, often involving effort, skill, or resources._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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William J. Baumol on Competition - Dictionary of Arguments
Sobel I 17 Competition/Baumol/Sobel/Clemens: Since the days of Adam Smith, the key concern in thinking about the differences among market types is the level of competition among firms, which is thought to be a force that disciplines the behaviour of businesses. Put simply, when firms are in greater competition With other firms they tend to provide better prices, quality, and customer service, and be more innovative and effcient. As is best summarized by noted economist William Baumol in his presidential address to the American Economic Association, „standard analysis leaves us With the impression that there is a rough continuum, in terms of desirability of industry performance, ranging from unregulated pure monopoly as the [worst] arrangement to perfect competition as the ideal, with [desirability] increasing as the number of firms expands. „(Baumol, 1982: 2)(1) Sobel/Clemens: At one extreme on this continuum of competition are markets or industries described as having "perfect competition" (lots of firms competing with identical products), while at the other are markets that are a monopoly (dominated by one firm). >Perfect competition. Generally, economists also consider two additional markets in the middle of the continuum often called "monopolistic competition" (lots offirms competing but with products or services that are differentiated from one another) and "oligopoly" (a few large rival firms). >Monopolistic competition. Each market has specific properties that identify and differentiate it. But, for simplicity's sake, as Baumol states, we can generally conclude simply that markets with more small firms are better (or more effcient) than those with fewer large firms. SchumpeterVsBaumol/SchumpeterVsTradition: Joseph Schumpeter was one of the first economists to question this standard description and indeed viewed this traditional framework as being somewhat misleading. >Competition/Schumpeter. 1. Baumol, William J. (1982). Contestable Markets: An Uprising in the Theory of Industry Structure. American Economic Review 72, 1: 1–15. |
EconBaum I William J. Baumol John C. Panzar Robert D. Willig, Contestable markets and the theory of industry structure New York 1982 EconBaum II William J. Baumol David F. Bradford Optimal departures from marginal cost pricing 1970 Sobel I Russell S. Sobel Jason Clemens The Essential Joseph Schumpeter Vancouver 2020 |
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