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Competition or conflict? Beyond traditional ordo-liberalism

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  • Dold, Malte
  • Krieger, Tim

Abstract

According to the traditional ordo-liberal view of the Freiburg School, the central role of the state in economic affairs is to set up rules that create a competitive order within which private actors have sufficient incentives to coordinate their economic affairs efficiently. Underlying this view is the implicit assumption that, given the right institutional framework, competition within markets is mainly characterized by peaceful and conflict-free rivalry between actors that leads to an optimal allocation of resources. In such a setting, competition may be described as a "record-type" game. This view, however, ignores the possibility that competition itself may very well trigger conflict rather than having an appeasing effect. In this case, competition appears to be a "struggle-type" game in which competitors invest in conflict activities that are not efficiency enhancing but rather resource wasting. Against this background, ordo-liberalism has yet to provide a clear-cut distinction between competition and conflict. In addition, it fails to identify - in a normative way - which institutional and regulatory framework could hamper conflict sensitivity of economic competition, given the harmful effect of conflict on the security of property rights. Our contribution investigates how the ordo-liberal research program needs to be extended when introducing conflict.

Suggested Citation

  • Dold, Malte & Krieger, Tim, 2017. "Competition or conflict? Beyond traditional ordo-liberalism," Discussion Paper Series 2017-02, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
  • Handle: RePEc:zbw:wgspdp:201702
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    Cited by:

    1. Dold, Malte & Krieger, Tim, 2017. "Competition or conflict? Beyond traditional ordo-liberalism," Discussion Paper Series 2017-02, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.

    More about this item

    Keywords

    ordo-liberalism; Freiburg School; conflict economics; competition;

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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