Competition (economics)

About: Competition (economics) is a research topic. Over the lifetime, 65248 publications have been published within this topic receiving 1415041 citations. The topic is also known as: economic competition & market competition.

Endogenous Technological Change

Abstract: Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

Structural Holes: The Social Structure of Competition.

Abstract: The study analyzes the social structure of competition. It addresses the consequences of voids in relational and resource networks. Competitive behavior can be understood in terms of player access to \"holes\" in the social structure of the competitive arena. Those \"structural holes\" are network gaps between players which create entrepreneurial opportunities for information access, timing, referrals, and for control. A player brings capital to the competitive arena and walks away with profit determined by the rate of return where the capital was invested. The rate of return is keyed to the social structure of the competitive arena. Each player brings three kinds of capital to the competitive arena: financial capital, such as money and investments; human capital, such as his or her natural qualities and skills; and social capital, i.e. networks of other players. Social capital is the final determinant of competitive success. Something about the structure of a player's network (his or her relations with other players, such as colleagues, friends, and clients), and the location of the player's network in the structure of the arena defines the player's chances of getting higher rates of return. These chances are enhanced by two kinds of network benefits for those who can exploit structural holes: information and control. Opportunities for success are many, but it is information that plays a central role in seizing them; structural holes determine who knows about opportunities, what they know, and who gets to participate. Structural holes also generate control benefits, giving certain players an advantage in negotiating their relationships. Following sociological theory, a player who derives benefit from structural holes by brokering relationships between other conflicted players is called tertius gaudens. The essential tension in tertius strategies is not hostility of participants, but rather uncertainty; no one has absolute authority in the relationship under negotiation. The findings of empirical research indicate that structural holes are advantageous to suppliers and customers, but not to producers in their negotiated transactions, because suppliers and customers benefit from competition among producers. The information and control benefits of structural holes are advantageous to managers, and the managers who develop those benefits are an asset to the firm employing them. Managers with networks rich in structural holes often reach promotion faster. Hole effects are most evident for managers operating on a social frontier, i.e. in places where two social worlds meet. Social frontiers involve continual negotiations of the expectations of the manager and those of the people across the frontier, and thus more entrepreneurial skill is required. The most serious frontier is the political boundary between top leadership and the rest of the firm. To move up the corporate ladder, a manager has to transform his or her frame of reference from that of an employee protected by the firm, to that of a leader responsible for the firm. The findings also indicate that women and entry-rank men tend to be promoted earlier because they build hierarchical networks around a strategic partner who helps them break into higher ranks. Although the reported differences between the manager networks have clear implications for promotions, there are no differences among managers in their tendencies to have one network rather than another, which is especially striking with respect to the sex and rank differences that are observed to be important in distinguishing network effects. Structural holes provide a theoretical connection between micro and macro levels of sociological analysis. The structural hole argument extends other theories, such as personality theory, interface theory of markets and population ecology, and resource dependence and transaction cost theory

The cornerstones of competitive advantage: A resource‐based view

Abstract: This paper elucidates the underlying economics of the resource-based view of competitive advantage and integrates existing perspectives into a parsimonious model of resources and firm performance. The essence of this model is that four conditions underlie sustained competitive advantage, all of which must be met. These include superior resources (heterogeneity within an industry), ex post limits to competition, imperfect resource mobility, and ex ante limits to competition. In the concluding section, applications of the model for both single business strategy and corporate strategy are discussed.

The Theory of Industrial Organization

Abstract: The Theory of Industrial Organization is the first primary text to treat the new industrial organization at the advanced-undergraduate and graduate level Rigorously analytical and filled with exercises coded to indicate level of difficulty, it provides a unified and modern treatment of the field with accessible models that are simplified to highlight robust economic ideas while working at an intuitive level To aid students at different levels, each chapter is divided into a main text and supplementary section containing more advanced material Each chapter opens with elementary models and builds on this base to incorporate current research in a coherent synthesis Tirole begins with a background discussion of the theory of the firm In part I he develops the modern theory of monopoly, addressing single product and multi product pricing, static and intertemporal price discrimination, quality choice, reputation, and vertical restraints In part II, Tirole takes up strategic interaction between firms, starting with a novel treatment of the Bertrand-Cournot interdependent pricing problem He studies how capacity constraints, repeated interaction, product positioning, advertising, and asymmetric information affect competition or tacit collusion He then develops topics having to do with long term competition, including barriers to entry, contestability, exit, and research and development He concludes with a "game theory user's manual" and a section of review exercises

Clusters and the new economics of competition.

Abstract: Economic geography in an era of global competition poses a paradox. In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transportation, and high-speed communications should allow any company to source any thing from any place at any time. But in practice, Michael Porter demonstrates, location remains central to competition. Today's economic map of the world is characterized by what Porter calls clusters: critical masses in one place of linked industries and institutions--from suppliers to universities to government agencies--that enjoy unusual competitive success in a particular field. The most famous example are found in Silicon Valley and Hollywood, but clusters dot the world's landscape. Porter explains how clusters affect competition in three broad ways: first, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation; and third, by stimulating the formation of new businesses within the cluster. Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. The more complex, knowledge-based, and dynamic the world economy becomes, the more this is true. Competitive advantage lies increasingly in local things--knowledge, relationships, and motivation--that distant rivals cannot replicate. Porter challenges the conventional wisdom about how companies should be configured, how institutions such as universities can contribute to competitive success, and how governments can promote economic development and prosperity.