Program
Subjects
Works
Book Types
Back to issue
Cover of: Competition: Theoretical Parameterizations and Empirical Measures
Jan Boone

Competition: Theoretical Parameterizations and Empirical Measures

Section: Article
Volume 164 (2008) / Issue 4, pp. 587-611 (25)
Published 09.07.2018
DOI 10.1628/093245608786534640
  • article PDF
  • available
  • 10.1628/093245608786534640
Due to a system change, access problems and other issues may occur. We are working with urgency on a solution. We apologise for any inconvenience.
Summary
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.