The price cost margin (PCM) is a popular way to measure competition. Although we know that this measure is not without … new competition measure, the profit elasticity, which is more robust than PCM. Our empirical analysis based on Dutch data … shows that when competition changes the probability that PCM points in the wrong direction increases with industry …

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 …

The Profit Elasticity (PE) is a new competition measure introduced in Boone (2008). So far, there was no direct proof … that this measure can identify regimes of competition empirically. This paper focuses on this issue using data of Genesove … and Mullin (1998) in which different regimes of competition are identified. We derive a version of PE suitable for this …

This Paper introduces optimal competition: the best form of competition in an industry that a competition authority can … competition outcome in an industry becomes more competitive as more money is spent in the industry, as the competition authority … puts less weight on producer surplus and more weight on employment. The relation between competition and entry costs is U …

Competition has been modelled in economic literature in a number of ways. What do these different parameterizations 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 parameterizations of competition, considered here, have two …

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. …

We introduce a new measure of competition: the elasticity of a firm's profits with respect to its cost level. A higher … value of this profit elasticity (PE) signals more intense competition. Using firm-level data we compare PE with the most … popular competition measures such as the price cost margin (PCM). We show that PE and PCM are highly correlated on average …