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A New Way to Measure Competition

Author

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  • Boone, J.

    (Tilburg University, Center For Economic Research)

Abstract

This article introduces a new way to measure competition based on firms' profits. Within a general model, we derive conditions under which this measure is monotone in competition, where competition can be intensified both through a fall in entry barriers and through more aggressive interaction between players. The measure is shown to be more robust theoretically than the price cost margin. This allows for an empirical test of the problems associated with the price cost margin as a measure of competition. Copyright (C) The Author(s). Journal compilation (C) Royal Economic Society 2008.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Boone, J., 2004. "A New Way to Measure Competition," Discussion Paper 2004-31, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:961dc10b-580e-4d5e-9e9d-b05a1f4172d1
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    References listed on IDEAS

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    More about this item

    Keywords

    competition; measurement; profit; firms;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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