Boone, Jan; Wiel, Henry van der; Ours, J. van - Centraal Planbureau (CPB), Government of the Netherlands - 2007
We discuss and apply 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...