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 …

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 …