We introduce a new measure of competition: the elasticity of a firm’s profits with respect to its cost level. A higher … popular competition measures such as the price cost margin (PCM). We show that PE and PCM are highly correlated on average …. However, PCM tends to misrepresent the development of competition over time in markets with few firms and high concentration …

This paper 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 … competition. …

and development. It presents a new framework incorporating the selection effect of product market competition, the …

This paper compares the welfare effects of three ways in which health care can be organized: no competition (NC …), competition for the market (CfM) and competition on the market (CoM) where the payer offers the optimal contract to providers in …

Competition has been modelled in the literature in a number of ways.What do these different parametrizations of … competition have in common?For instance, it turns out that it is not always the case that a rise in competition reduces price cost … margins, industry wide profits or concentration.All parametrizations of competition, considered here, have two features in …

This paper introduces optimal competition: the best form of competition in an industry that a competition authority can … achieve under the information constraint that it cannot observe firms' effciency levels.We show that the optimal competition … outcome in an industry becomes more competitive as more money is spent in the industry, as the competition authority puts less …