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Productive and unproductive competition: a unified framework

Author

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  • Alice Guerra

    (Copenhagen Business School)

  • Barbara Luppi

    (University of Modena and Reggio Emilia)

  • Francesco Parisi

    (University of Minnesota)

Abstract

Conventional theories of competition classify contests as being either “productive”, when the competitive efforts generate a surplus for society, or “unproductive”, when competition generates no social surplus and merely distributes already existing resources. These two discrete categories of competition create a division of real-world situations into analytical categories that fails to recognize the entire spectrum of competitive activities. Taking the existing models of productive and unproductive competition as benchmark idealizations, this paper revisits the relationship between the privately and socially optimal levels of competition in the full range of intermediate cases, as well as in the extremum cases of destructive and super-productive competition.

Suggested Citation

  • Alice Guerra & Barbara Luppi & Francesco Parisi, 2019. "Productive and unproductive competition: a unified framework," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(3), pages 785-804, October.
    • Handle: RePEc:spr:epolit:v:36:y:2019:i:3:d:10.1007_s40888-017-0077-z
    DOI: 10.1007/s40888-017-0077-z
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    More about this item

    Keywords

    Contests; Rent seeking; Unproductive competition; Productive competition; Patent races;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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