Konferenzbeitrag

Competition through Technical Progress

The relationship between technical progress and price competition is a controversial issue in economics. This paper highlights the fact that investment in technical progress is an authentic type of competition which benefits the consumers rather than the industry. This type of competition exists when the potential for technical progress, which can be incorporated by firms through investment, is high enough. Competition is, in fact, made up of two components: A static one which is known as price or quantity competition and a dynamic one, the Technical Progress competition which also contribute to reduce prices and increase quantities for consumers. Consequently, the economic factors that increase a firm's margin do not have to be viewed as the consumers' enemy, but rather as an ally, under specific conditions, because they allow higher investments in new technology by which firms increase their capacities and attract higher demand from consumers. This paper also underlines that, for a mature market, the maximum Consumer Surplus as well as Social Welfare are attained by a constant level of combined competition which is only dependent on the size of the market and the number of firms. The level of combined competition can be defined as the product of the static and the dynamic level of competition. As a consequence, the higher the potential of technical progress is, the lower the level of static competition must be in order to reach the maximum level of Consumer Surplus and Social Welfare.

Sprache
Englisch

Erschienen in
Series: 21st European Regional Conference of the International Telecommunications Society (ITS): "Telecommunications at New Crossroads: Changing Value Configurations, User Roles, and Regulation", Copenhagen, Denmark, 13th-15th September 2010 ; No. 18

Klassifikation
Wirtschaft
Firm Behavior: Theory
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Oligopoly and Other Imperfect Markets
Economics of Regulation
Telecommunications
Microeconomic Analyses of Economic Development
Thema
Investment
Competition
Technical Progress
Dynamic Competition

Ereignis
Geistige Schöpfung
(wer)
Jeanjean, François
Ereignis
Veröffentlichung
(wer)
International Telecommunications Society (ITS)
(wo)
Calgary
(wann)
2010

Handle
Letzte Aktualisierung
02.09.0014, 09:46 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Konferenzbeitrag

Beteiligte

  • Jeanjean, François
  • International Telecommunications Society (ITS)

Entstanden

  • 2010

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