Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game).Competition can arise between entities such as organisms, individuals, economic and social groups, etc. The rivalry can be over attainment of any exclusive goal, including recognition: (e.g. awards, goods, mates, status, prestige), leadership, market share, niches and scarce resources, or a territory.
Competition occurs in nature, between living organisms which co-exist in the same environment. Animals compete over water supplies, food, mates, and other biological resources. Humans usually compete for food and mates, though when these needs are met deep rivalries often arise over the pursuit of wealth, power, prestige, and fame when in a static, repetitive, or unchanging environment. Competition is a major tenet of market economies and business, often associated with business competition as companies are in competition with at least one other firm over the same group of customers. Competition inside a company is usually stimulated with the larger purpose of meeting and reaching higher quality of services or improved products that the company may produce or develop.
Competition is often considered to be the opposite of cooperation, however in the real world, mixtures of cooperation and competition are the norm.In economies, as the philosopher R. G. Collingwood argued "the presence of these two opposites together is essential to an economic system. The parties to an economic action co-operate in competing, like two chess players". Optimal strategies to achieve goals are studied in the branch of mathematics known as game theory.
Competition has been studied in several fields, including psychology, sociology and anthropology. Social psychologists, for instance, study the nature of competition. They investigate the natural urge of competition and its circumstances. They also study group dynamics, to detect how competition emerges and what its effects are. Sociologists, meanwhile, study the effects of competition on society as a whole. Additionally, anthropologists study the history and prehistory of competition in various cultures. They also investigate how competition manifested itself in various cultural settings in the past, and how competition has developed over time.
Competition within, between, and among species is one of the most important forces in biology, especially in the field of ecology.
Competition between members of a species ("intraspecific") for resources such as food, water, territory, and sunlight may result in an increase in the frequency of a variant of the species best suited for survival and reproduction until its fixation within a population. However, competition among resources also has a strong tendency for diversification between members of the same species, resulting in coexistence of competitive and non-competitive strategies or cycles between low and high competitiveness. Third parties within a species often favour highly competitive strategies leading to species extinction when environmental conditions are harsh (evolutionary suicide).
Competition is also present between species ("interspecific"). When resources are limited, several species may depend on these resources. Thus, each of the species competes with the others to gain access to the resources. As a result, species less suited to compete for the resources may die out unless they adapt by character dislocation, for instance. According to evolutionary theory, this competition within and between species for resources plays a significant role in natural selection. At shorter time scales, competition is also one of the most important factors controlling diversity in ecological communities, but at larger scales expansion and contraction of ecological space is a much more larger factor than competition.This is illustrated by living plant communities where asymmetric competition and competitive dominance frequently occur. Multiple examples of symmetric and asymmetric competition also exist for animals.
In Australia, New Zealand and the United Kingdom, competitions or lotto are the equivalent of what are commonly known as sweepstakes in the United States. The correct technical name for Australian consumer competitions is a trade promotion lottery or lotto.
Competition or trade promotion lottery entrants enter to win a prize or prizes, hence many entrants are all in competition, or competing for a limited number of prizes.
A trade promotion lottery or competition is a free entry lottery run to promote goods or services supplied by a business. An example is where you purchase goods or services and then given the chance to enter into the lottery and possibly win a prize. A trade promotion lottery can be called a lotto, competition, contest, sweepstake, or giveaway.
Such competitions can be games of luck (randomly drawn) or skill (judged on an entry question or submission), or possibly a combination of both.
People that enjoy entering competitions are known as compers. Many compers attend annual national conventions. In 2012 over 100 members of the online competitions community of lottos.com.au from around Australia met on the Gold Coast, Queensland to discuss competitions.
Many philosophers and psychologists have identified a trait in most living organisms which can drive the particular organism to compete. This trait, called competitiveness, is viewed as an innate biological trait [ citation needed ]which coexists along with the urge for survival. Competitiveness, or the inclination to compete, though, has become synonymous with aggressiveness and ambition in the English language. More advanced civilizations integrate aggressiveness and competitiveness into their interactions, as a way to distribute resources and adapt. Many plants compete with neighboring ones for sunlight.
The term also applies to econometrics. Here, it is a comparative measure of the ability and performance of a firm or sub-sector to sell and produce/supply goods and/or services in a given market. The two academic bodies of thought on the assessment of competitiveness are the Structure Conduct Performance Paradigm and the more contemporary New Empirical Industrial Organisation model. Predicting changes in the competitiveness of business sectors is becoming an integral and explicit step in public policymaking. Within capitalist economic systems, the drive of enterprises is to maintain and improve their own competitiveness.
Competition is a major factor in education. On a global scale, national education systems, intending to bring out the best in the next generation, encourage competitiveness among students through scholarships. Countries such as England and Singapore have special education programmes which cater for specialist students, prompting charges of academic elitism. Upon receipt of their academic results, students tend to compare their grades to see who is better. In severe cases, the pressure to perform in some countries is so high that it can result in stigmatization of intellectually deficient students, or even suicide as a consequence of failing the exams; Japan being a prime example (see Education in Japan). This has resulted in critical re-evaluation of examinations as a whole by educationalists [ citation needed ]. Critics of competition as a motivating factor in education systems, such as Alfie Kohn, assert that competition actually has a net negative influence on the achievement levels of students, and that it "turns all of us into losers" (Kohn 1986). Economist Richard Layard has commented on the harmful effects, stating "people feel that they are under a great deal of pressure. They feel that their main objective in life is to do better than other people. That is certainly what young people are being taught in school every day. And it's not a good basis for a society."
However, other studies such as the Torrance Tests of Creative Thinking show that the effect of competition on students depends on each individual's level of agency. Students with a high level of agency thrive on competition, are self-motivated, and are willing to risk failure. Compared to their counterparts who are low in agency, these students are more likely to be flexible, adaptable and creative as adults.
Merriam-Webster gives as one definition of competition (relating to business) as "[...] rivalry: such as [...] the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms". [ need quotation to verify ] Later microeconomic theory distinguished between perfect competition and imperfect competition, concluding that no system of resource allocation is more efficient than perfect competition.[ citation needed ] Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).[ citation needed ]Adam Smith in his 1776 book The Wealth of Nations and later economists described competition in general as allocating productive resources to their most highly valued uses and encouraging efficiency.
However, competition may also lead to wasted (duplicated) effort and to increased costs (and prices) in some circumstances. For example, the intense competition for the small number of top jobs in music and movie-acting leads many aspiring musicians and actors to make substantial investments in training which are not recouped, because only a fraction become successful. Critics[ which? ] have also argued that competition can be destabilizing, particularly competition between certain financial institutions.
Experts have also questioned the constructiveness of competition in profitability. It has been argued that competition-oriented objectives are counterproductive to raising revenues and profitability because they limit the options of strategies for firms as well as their ability to offer innovative responses to changes in the market.In addition, the strong desire to defeat rival firms with competitive prices has the strong possibility of causing price wars.
Another distinction appearing in economics is that between competition as an end-state – as in the case of both perfect and imperfect competition – and competition as a process. That process is typically seen as a process. It is a process of rivalry between firms (or consumers) intensifying selective pressures for improvements. One can restate this as a process of discovery.
Three levels of end-state economic competition have been classified:[ by whom? ]
In addition, companies compete for financing on the capital markets (equity or debt) in order to generate the necessary cash for their operations. Investor typically consider alternative investment opportunities given their risk profile, and not only look at companies just competing on product (direct competitors). Enlarging the investment universe to include indirect competitors leads to a broader peer universe of comparable, indirectly competing companies.
Competition does not necessarily have to be between companies. For example, business writers sometimes refer to internal competition. This is competition within companies. The idea was first introduced by Alfred Sloan at General Motors in the 1920s. Sloan deliberately created areas of overlap between divisions of the company so that each division would compete with the other divisions. For example, the Chevrolet division would compete with the Pontiac division for some market segments. The competing brands by the same company allowed parts to be designed by one division and shared by several divisions, for example parts designed by Chevrolet would also be used by Pontiac. In 1931 Procter & Gamble initiated a deliberate system of internal brand-versus-brand rivalry. The company was organized[ by whom? ] around different brands, with each brand allocated resources, including a dedicated group of employees willing to champion the brand. Each brand manager was given responsibility for the success or failure of the brand, and compensated accordingly.
Most businesses also encourage competition between individual employees. An example of this is a contest between sales representatives. The sales representative with the highest sales (or the best improvement in sales) over a period of time would gain benefits from the employer. This is also known as intra-brand competition.
Shalev and Asbjornsen found that success (i.e. the saving resulted) of reverse auctions correlated most closely with competition. The literature widely supported the importance of competition as the primary driver of reverse auctions success.Their findings appear to support that argument, as competition correlated strongly with the reverse auction success, as well as with the number of bidders.
Business and economic competition in most countries is often[ quantify ] limited or restricted. Competition often is subject to legal restrictions. For example, competition may be legally prohibited, as in the cases of a government monopoly or of a government-granted monopoly. Governments may institute tariffs, subsidies or other protectionist measures in order to prevent or reduce competition. Depending on the respective economic policy, pure competition is to a greater or lesser extent regulated by competition policy and competition law. Another component of these activities is the discovery process, with instances of higher government regulations typically leading to less competitive businesses being launched.
Nicholas Gruen has referred to The Competition Delusion in which competition is taken to be unambiguously good even where that competition leaks into the rules of the game. He claims this drives financialisation (the approximate doubling of proportion of economic resources dedicated to finance and to 'rule making and administering' professions such as law, accountancy and auditing.
Competition between countries is quite subtle to detect, but is quite evident in the world economy.[ citation needed ] Countries compete to provide the best possible business environment for multinational corporations. Such competition is evident by the policies undertaken by these countries to educate the future workforce. For example, East Asian economies such as Singapore, Japan and South Korea tend to emphasize education by allocating a large portion of the budget to this[ which? ] sector, and by implementing programmes such as gifted education.
Competition law, known in the United States as antitrust law, has three main functions:
In all three cases, competition law aims to protect the welfare of consumers by ensuring that each business must compete for its share of the market economy.
In recent decades,[ when? ] competition law has also been sold[ by whom? ] as good medicine to provide better public services, traditionally funded by tax-payers and administered by democratically accountable[ clarification needed ] governments. Hence competition law is closely connected with the law on deregulation of access to markets, providing state aids and subsidies, the privatisation of state-owned assets and the use of independent sector regulators, such as the United Kingdom telecommunications watchdog Ofcom. Behind the practice lies the theory, which over the last fifty years[ when? ] has been dominated by neo-classical economics. Markets are seen as the most efficient method of allocating resources, although sometimes they fail, and regulation becomes necessary to protect the ideal market model. Behind the theory lies the history, reaching back further than the Roman Empire. The business practices of market traders, guilds and governments have always been subject to scrutiny and sometimes to severe sanctions. Since the twentieth century, competition law has become global.[ citation needed ] The two largest, most organised and influential systems of competition regulation are United States antitrust law and European Community competition law. The respective national/international authorities, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) in the United States and the European Commission's Competition Directorate General (DGCOMP) have formed international support- and enforcement-networks. Competition law is growing in importance every day,[ citation needed ] which warrants for its careful study.
Game theory is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers."Game theory is mainly used in economics, political science, and psychology, as well as logic, computer science, biology and poker. Originally, it mainly addressed zero-sum games, in which one person's gains result in losses for the other participants.
Game theory is a major method used in mathematical economics and business for modeling competing behaviors of interacting agents.Applications include a wide array of economic phenomena and approaches, such as auctions, bargaining, mergers & acquisitions pricing, fair division, duopolies, oligopolies, social network formation, agent-based computational economics, general equilibrium, mechanism design, and voting systems; and across such broad areas as experimental economics, behavioral economics, information economics, industrial organization, and political economy.
This research usually focuses on particular sets of strategies known as "solution concepts" or "equilibria". A common assumption is that players act rationally. In non-cooperative games, the most famous of these is the Nash equilibrium. A set of strategies is a Nash equilibrium if each represents a best response to the other strategies. If all the players are playing the strategies in a Nash equilibrium, they have no unilateral incentive to deviate, since their strategy is the best they can do given what others are doing.
Literary competitions, such as contests sponsored by literary journals, publishing houses and theaters, have increasingly become a means for aspiring writers to gain recognition. Awards for fiction include those sponsored by the Missouri Review , Boston Review , Indiana Review , North American Review and Southwest Review . The Albee Award, sponsored by the Yale Drama Series, is among the most prestigious playwriting awards.[ citation needed ]
Margaret Heffernan's study, A Bigger Prize,examines the perils and disadvantages of competition in (for example) biology, families, sport, education, commerce and the Soviet Union.
Karl Marx insisted that "the capitalist system fosters competition and egoism in all its members and thoroughly undermines all genuine forms of community".It promotes a "climate of competitive egoism and individualism", with competition for jobs and competition between employees; Marx said competition between workers exceeds that demonstrated by company owners. He also points out that competition separates individuals from one another and while concentration of workers and development of better communication alleviate this, they are not a decision.
Sigmund Freud explained competition as a primal dilemma in which all infants find themselves. The infant competes with other family members for the attention and affection of the parent of the opposite sex or the primary caregiving parent. During this time, a boy develops a deep fear that the father (the son's prime rival) will punish him for these feelings of desire for the mother, by castrating him. Girls develop penis envy towards all males. The girl's envy is rooted in the biologic fact that, without a penis, she cannot sexually possess mother, as the infantile id demands, resultantly, the girl redirects her desire for sexual union upon father in competitive rivalry with her mother. This constellation of feelings is known as Oedipus Complex (after the Greek Mythology figure who accidentally killed his father and married his mother). This is associated with the phallic stage of childhood development where intense primal emotions of competitive rivalry with (usually) the parent of the same sex are rampant and create a crisis that must be negotiated successfully for healthy psychological development to proceed. Unresolved Oedipus complex competitiveness issues can lead to lifelong neuroses manifesting in various ways related to an overdetermined relationship to competition.
Gandhi speaks of egoistic competition.For him, such qualities glorified and/or left unbridled, can lead to violence, conflict, discord and destructiveness. For Gandhi, competition comes from the ego, and therefore society must be based on mutual love, cooperation and sacrifice for the well-being of humanity. In the society desired by Gandhi, each individual will cooperate and serve for the welfare of others and people will share each other's joys, sorrows and achievements as a norm of a social life. For him, in a non-violent society, competition does not have a place and this should become realized with more people making the personal choice to have fewer tendencies toward egoism and selfishness.
Competition is also found in politics. In democracies, an election is a competition for an elected office. In other words, two or more candidates strive and compete against one another to attain a position of power. The winner gains the seat of the elected office for a predefined period of time, towards the end of which another election is usually held to determine the next holder of the office.
In addition, there is inevitable competition inside a government. Because several offices are appointed, potential candidates compete against the others in order to gain the particular office. Departments may also compete for a limited amount of resources, such as for funding. Finally, where there are party systems, elected leaders of different parties will ultimately compete against the other parties for laws, funding and power.
Finally, competition also exists between governments. Each country or nationality struggles for world dominance, power, or military strength. For example, the United States competed against the Soviet Union in the Cold War for world power, and the two also struggled over the different types of government (in these cases representative democracy and communism). The result of this type of competition often leads to worldwide tensions, and may sometimes erupt into warfare.
While some sports and games (such as fishing or hiking) have been viewed as primarily recreational, most sports are considered competitive. The majority involve competition between two or more persons (sometimes using horses or cars). For example, in a game of basketball, two teams compete against one another to determine who can score the most points. When there is no set reward for the winning team, many players gain a sense of pride. In addition, extrinsic rewards may also be given. Athletes, besides competing against other humans, also compete against nature in sports such as whitewater kayaking or mountaineering, where the goal is to reach a destination, with only natural barriers impeding the process. A regularly scheduled (for instance annual) competition meant to determine the "best" competitor of that cycle is called a championship.
Competitive sports are governed by codified rules agreed upon by the participants. Violating these rules is considered to be unfair competition. Thus, sports provide artificial (not natural) competition; for example, competing for control of a ball, or defending territory on a playing field is not an innate biological factor in humans. Athletes in sports such as gymnastics and competitive diving compete against each other in order to come closest to a conceptual ideal of a perfect performance, which incorporates measurable criteria and standards which are translated into numerical ratings and scores by appointed judges.
Sports competition is generally broken down into three categories: individual sports, such as archery; dual sports, such as doubles tennis, and team sports competition, such as cricket or football. While most sports competitions are recreation, there exist several major and minor professional sports leagues throughout the world. The Olympic Games, held every four years, is usually regarded as the international pinnacle of sports competition.
Competition is also found in trade. For nations, as well as firms it is important to understand trade dynamics in order to market their goods and services effectively in international markets. Balance of trade can be considered a crude, but widely used proxy for international competitiveness across levels: country, industry or even firm. Research data hints that exporting firms have a higher survival rate and achieve greater employment growth compared with non-exporters.
Using a simple concept to measure heights that firms can climb may help improve execution of strategies. International competitiveness can be measured on several criteria but few are as flexible and versatile to be applied across levels as Trade Competitiveness Index (TCI)
The tendency toward extreme, unhealthy competition has been termed hypercompetitiveness. This concept originated in Karen Horney's theories on neurosis; specifically, the highly aggressive personality type which is characterized as "moving against people". In her view, some people have a need to compete and win at all costs as a means of maintaining their self-worth. These individuals are likely to turn any activity into a competition, and they will feel threatened if they find themselves losing. Researchers have found that men and women who score high on the trait of hypercompetitiveness are more narcissistic and less psychologically healthy than those who score low on the trait.Hypercompetitive individuals generally believe that winning is the only thing that matters.
Competition can have both beneficial and detrimental effects. Many evolutionary biologists view inter-species and intra-species competition as the driving force of adaptation, and ultimately of evolution. However, some biologists disagree, citing competition as a driving force only on a small scale, and citing the larger scale drivers of evolution to be abiotic factors (termed 'Room to Roam').Richard Dawkins prefers to think of evolution in terms of competition between single genes, which have the welfare of the organism 'in mind' only insofar as that welfare furthers their own selfish drives for replication (termed the 'selfish gene').
Some social Darwinists claim that competition also serves as a mechanism for determining the best-suited group; politically, economically and ecologically. Positively, competition may serve as a form of recreation or a challenge provided that it is non-hostile. On the negative side, competition can cause injury and loss to the organisms involved, and drain valuable resources and energy. In the human species competition can be expensive on many levels, not only in lives lost to war, physical injuries, and damaged psychological well-beings, but also in the health effects from everyday civilian life caused by work stress, long work hours, abusive working relationships, and poor working conditions, that detract from the enjoyment of life, even as such competition results in financial gain for the owners.
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Game theory is the study of mathematical models of strategic interaction among rational decision-makers. It has applications in all fields of social science, as well as in logic, systems science and computer science. Originally, it addressed zero-sum games, in which each participant's gains or losses are exactly balanced by those of the other participants. In the 21st century, game theory applies to a wide range of behavioral relations, and is now an umbrella term for the science of logical decision making in humans, animals, and computers.
Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.
Monopolistic competition is a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another and hence are not perfect substitutes. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. If this happens in the presence of coercive government, monopolistic competition will fall into government-granted monopoly. Unlike perfect competition, the firm maintains spare capacity. Models of monopolistic competition are often used to model industries. Textbook examples of industries with market structures similar to monopolistic competition include restaurants, cereal, clothing, shoes, and service industries in large cities. The "founding father" of the theory of monopolistic competition is Edward Hastings Chamberlin, who wrote a pioneering book on the subject, Theory of Monopolistic Competition (1933). Joan Robinson published a book The Economics of Imperfect Competition with a comparable theme of distinguishing perfect from imperfect competition. Further work on monopolistic competition was undertaken by Dixit and Stiglitz who created the Dixit-Stiglitz model which has proved applicable used in the sub fields of international trade theory, macroeconomics and economic geography.
An oligopoly is a market form wherein a market or industry is dominated by a small group of large sellers (oligopolists). For example, it has been found out that electrical and tobacco industry are highly oligopolist in the US.
In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of firms and markets. Industrial organization adds real-world complications to the perfectly competitive model, complications such as transaction costs, limited information, and barriers to entry of new firms that may be associated with imperfect competition. It analyzes determinants of firm and market organization and behavior on a continuum between competition and monopoly, including from government actions.
Collusion is a deceitful agreement or secret cooperation between two or more parties to limit open competition by deceiving, misleading or defrauding others of their legal right. Collusion is not always considered illegal. It can be used to attain objectives forbidden by law; for example, by defrauding or gaining an unfair market advantage. It is an agreement among firms or individuals to divide a market, set prices, limit production or limit opportunities. It can involve "unions, wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties". In legal terms, all acts effected by collusion are considered void.
In economics and marketing, product differentiation is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own products. The concept was proposed by Edward Chamberlin in his 1933 The Theory of Monopolistic Competition.
Porter's Five Forces Framework is a method for analysing competition of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness of an industry in terms of its profitability. An "unattractive" industry is one in which the effect of these five forces reduces overall profitability. The most unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit levels. The five-forces perspective is associated with its originator, Michael E. Porter of Harvard University. This framework was first published in Harvard Business Review in 1979.
In theories of competition in economics, a barrier to entry, or an economic barrier to entry, is a fixed cost that must be incurred by a new entrant, regardless of production or sales activities, into a market that incumbents do not have or have not had to incur. Because barriers to entry protect incumbent firms and restrict competition in a market, they can contribute to distortionary prices and are therefore most important when discussing antitrust policy. Barriers to entry often cause or aid the existence of monopolies and oligopolies, or give companies market power.
Experimental economics is the application of experimental methods to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms. Economic experiments usually use cash to motivate subjects, in order to mimic real-world incentives. Experiments are used to help understand how and why markets and other exchange systems function as they do. Experimental economics have also expanded to understand institutions and the law.
Information economics or the economics of information is a branch of microeconomic theory that studies how information and information systems affect an economy and economic decisions. Information has special characteristics: It is easy to create but hard to trust. It is easy to spread but hard to control. It influences many decisions. These special characteristics complicate many standard economic theories.
Personnel economics has been defined as "the application of economic and mathematical approaches and econometric and statistical methods to traditional questions in human resources management". It is an area of applied micro labor economics, but there are a few key distinctions. One distinction, not always clearcut, is that studies in personnel economics deal with the personnel management within firms, and thus internal labor markets, while those in labor economics deal with labor markets as such, whether external or internal. In addition, personnel economics deals with issues related to both managerial-supervisory and non-supervisory workers.
A market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services to buyers in exchange for money. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and resource allocation in a society. Markets allow any trade-able item to be evaluated and priced. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights of services and goods. Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale.
In economics, competition is a scenario where different economic firms are in contention to obtain goods that are limited by varying the elements of the marketing mix: price, product, promotion and place. In classical economic thought, competition causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater the selection of a good is in the market, prices are typically lower for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly). This is because there is now no rivalry between firms to obtain the product as there is enough for everyone. The level of competition that exists within the market is dependant on a variety of factors both on the firm/ seller side; the number of firms, barriers to entry, information availability, availability/ accessibility of resources. The number of buyers within the market also factors into competition with each buyer having a willingness to pay, influencing overall demand for the product in the market.
Martin Shubik was an American economist, who was Professor Emeritus of Mathematical Institutional Economics at Yale University.
Business economics is a field in applied economics which uses economic theory and quantitative methods to analyze business enterprises and the factors contributing to the diversity of organizational structures and the relationships of firms with labour, capital and product markets. A professional focus of the journal Business Economics has been expressed as providing "practical information for people who apply economics in their jobs."
The diamond model, also known as Porter's Diamond or the Porter Diamond Theory of National Advantage, describes a nation's competitive advantage in the international market. In this model, four attributes are taken into consideration: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. According to Michael Porter, the model's creator, "These determinants create the national environment in which companies are born and learn how to compete."
Mathematical economics is the application of mathematical methods to represent theories and analyze problems in economics. By convention, these applied methods are beyond simple geometry, such as differential and integral calculus, difference and differential equations, matrix algebra, mathematical programming, and other computational methods. Proponents of this approach claim that it allows the formulation of theoretical relationships with rigor, generality, and simplicity.
In microeconomics, the Bertrand–Edgeworth model of price-setting oligopoly looks at what happens when there is a homogeneous product where there is a limit to the output of firms which they are willing and able to sell at a particular price. This differs from the Bertrand competition model where it is assumed that firms are willing and able to meet all demand. The limit to output can be considered as a physical capacity constraint which is the same at all prices, or to vary with price under other assumptions.
A rivalry is the state of two people or groups engaging in a lasting competitive relationship. Rivalry is the "against each other" spirit between two competing sides. The relationship itself may also be called "a rivalry", and each participant or side a rival to the other. Someone's main rival may be called an archrival. A rivalry can be defined as "a perceptual categorizing process in which actors identify which states are sufficiently threatening competitors". In order for the rivalry to persist, rather than resulting in perpetual dominance by one side, it must be "a competitive relationship among equals". Political scientist John A. Vasquez has asserted that equality of power is a necessary component for a true rivalry to exist, but others have disputed that element.
A 1996 review of the evidence, summarized in this paper, found that competitor-oriented objectives reduced profitability. We describe new evidence from 12 studies, one of which is introduced in this paper. The new evidence supports the conclusion that competitor-oriented objectives are harmful, especially when managers receive information about competitors' market shares.
Margaret Heffernan's brave study shows how the competitive instinct can be bad for us in all walks of life, from sport to finance
This problem is greatly exacerbated by Marx's insistence that the capitalist system fosters competition and egoism in all its members and thoroughly undermines all genuine forms of community.