Concepts of Competition

by John Vickers

Published 7 April 1994
In this lecture, the author addresses the question: in what ways can competition promote economic efficiency? Following some introductory remarks, he begins by distinguishing different concepts of economic competition and relating them to the broad notion of competition as rivalry between individuals for something that cannot be obtained by all. Next, he discusses the historical development of concepts of competition, especially that of "perfect competition", which focuses on Smith, Cournot and Edgeworth. The main part of the lecture discusses ways in which competition affects efficiency via incentives, selection and innovation. The lecture concludes with some remarks on implications for the analysis of competition policy.