Competition: theoretical parameterizations and empirical measures
| Authors | |
|---|---|
| Publication date | 2008 |
| Journal | Journal of Institutional and Theoretical Economics |
| Volume | Issue number | 164 | 4 |
| Pages (from-to) | 587-611 |
| Number of pages | 25 |
| Organisations |
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| Abstract |
This paper proposes relative profits (RP) as a robust measure of competition. I consider nine different parameterizations of competition and show that more intense competition increases the profits of a firm relative to a less efficient firm. Further, popular competition measures like the price-cost margin (PCM) and Herfindahl index (H) can either increase or decrease in response to more intense competition. In this sense, RP is a more robust competition measure than PCM and H. |
| Document type | Article |
| Published at |
https://doi.org/10.1628/093245608786534640
(Final published version)
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