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The announcement of New Industrial Policy in July 1991 marked a paradigm shift in the overall macroeconomic policies followed in India from greater control and regulations to the free rein of market forces. Subsequently, there has been a paradigm shift in the competition regulation in India, with the establishment of the Competition Commission of India. The underlying motive behind the regulatory changes has been to increase competition in all spheres of economic activities. Given this background, the present study intends to assess whether the changes in policy regimes could bring out the desired output in terms of heightened competition in various spheres of the manufacturing sector, specifically across various subsectors in the manufacturing sector. These are important not only from a consumer point of view but also to identify the areas of concern for vigilant policy implementation. Using multiple indicators of concentration, we find that despite the increase in competition across various subsectors, concentration levels remain high for many subsectors. We observed high levels of concentration in seven of the twenty-nine subsectors studied and in another three high-moderate concentration levels noticed. [ABSTRACT FROM AUTHOR]

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This paper mainly studies two topics: linear complementarity problems for modeling electricity market equilibria and optimization under uncertainty. We consider both perfectly competitive and Nash–Cournot models of electricity markets and study their robustifications using strict robustness and the Γ-approach. For three out of the four combinations of economic competition and robustification, we derive algorithmically tractable convex optimization counterparts that have a clear-cut economic interpretation. In the case of perfect competition, this result corresponds to the two classic welfare theorems, which also apply in both considered robust cases that again yield convex robustified problems. Using the mentioned counterparts, we can also prove the existence and, in some cases, uniqueness of robust equilibria. Surprisingly, it turns out that there is no such economic sensible counterpart for the case of Γ-robustifications of Nash–Cournot models. Thus, an analog of the welfare theorems does not hold in this case. Finally, we provide a computational case study that illustrates the different effects of the combination of economic competition and uncertainty modeling.

This paper builds a neoclassical growth model with monopolistic competition and perfect competition. The paper synthesizes the basic economic mechanisms in neoclassical growth theory and monopolistic competition within a compact framework. The economic structure is based on the SolowUzawa growth models. We model monopolistic competition on basis of the Dixit-Stiglitz model. This paper makes a unique contribution to growth theory by making deviations from the traditional approaches in household behavior in monopolistic competition literature and markets in neoclassical growth theory. We develop and then show behavior of the model by simulation. The calibration identifies a stable unique equilibrium point. The motion of the economy is plotted. We also studies comparative dynamic processes due to changes in degree of specialization, unit labor requirement for production of intermediates, output elasticity of intermediate inputs, propensity to save, propensity to consume service, and human capital.

Frictionless consumer choices and price competition are often associated with competitive markets and vanishing equilibrium profits. We discuss vanishing profits in competitive screening markets like insurance. We assume symmetric firms which exhibit constant returns to scale. Consumer heterogeneity creates the possibility of adverse selection. Firms can offer multiple contracts in equilibrium and (importantly) in any deviation. Nash equilibrium profits vanish if each consumer has a unique optimizing bundle at equilibrium prices or, more generally, if there exists a linear ordering of contracts that dictates the preferences of firms whenever consumers are indifferent between multiple optimal contracts. Of particular interest, equilibrium profits vanish if, for each agent, indifference curves are steeper than iso-profit curves. The results extend to Miyazaki-Wilson-Spence equilibria. We provide examples of economies where there exists an equilibrium with strictly positive profit and show that these examples are robust (hold for an open set of economies). [ABSTRACT FROM AUTHOR]

Welfare with the maximum‐revenue tariff is compared to free‐trade welfare under Cournot duopoly with differentiated products; under Bertrand duopoly with differentiated products; and under perfect competition in the case of a large country able to affect its terms of trade. Under Cournot duopoly and Bertrand duopoly, assuming linear demands and constant marginal costs, welfare with the maximum‐revenue tariff is always higher than free‐trade welfare. Under perfect competition, assuming linear demand and supply, welfare with the maximum‐revenue tariff will be higher than free‐trade welfare if the country has sufficient market power. [ABSTRACT FROM AUTHOR]

Modern mainstream macroeconomics is characterised by its reliance on a general equilibrium framework of Walrasian origins, which is crucially associated with perfect competition and statics. To cope with the real economy, macroeconomics has been "forced" to introduce imperfections and frictions of various kinds into the perfectly competitive model. This raises, argues the paper, significant conceptual and analytical difficulties and tensions. There exist, however, other views of competition and markets which could provide more solid and fruitful foundations to the analysis of the macro-economy. After a selective examination of some contributions to the development of the notion of perfect competition, the paper looks at how modern mainstream macroeconomics dealt with general equilibrium and deviations from it. The paper argues that these alleged deviations from the perfectly competitive case should rather be regarded as inherent features of market economies. Dealing with them more satisfactorily requires calling on a different view of the working of the economy instead of trying to correct and amend the imaginary case of perfect competition. [ABSTRACT FROM AUTHOR]

We develop a theoretical model to study how changes in the durability of the goods affect prices of stolen goods, the incentives to steal and the equilibrium crime rate. When studying the production of durable goods, we find that the presence of crime affects consumer and producer surplus and thus their behaviour, market equilibrium, and, in turn, the social optimum. Lower durability of goods reduces the incentive to steal those goods, thus reducing crime. When crime is included in the standard framework of durable goods, the socially optimal durability level is lower. When considering different stealing technologies, perfect competition either over-produces durability or produces zero (minimum) durability. The monopolist under-produces durability. The model has a clear policy implication: the durability of goods, and the market structure for those goods, can be an effective instrument to reduce crime. In particular, making the durability of a good contingent upon that good being stolen is likely to increase welfare. We also study the incentives to develop and use this optimal technology. [ABSTRACT FROM AUTHOR]

We study multiline insurance companies with limited liability and limited capital, creating the possibility of insurer default. Insurance premiums are determined by no-arbitrage option pricing methods. The results are developed under the realistic assumption that the losses created by insurer default are allocated among policyholders following an ex post, pro rata, sharing rule. In general, the ratio of default costs to expected claims, and thus the ratios of premiums to expected claims vary across insurance lines. Moreover, capital and related costs are allocated across lines in proportion to each line’s share of a digital default option on the insurer. Our results differ from those derived elsewhere in the literature.

The paper examines how financing, entry, and exit decisions interact for firms in a perfectly competitive industry. The model developed by the author predicts high credit spreads for competitive industries, with spreads inversely dependant on industry cost of entry. Flexible capital structures imply a lower equilibrium entry threshold and higher initial coupon payments. Recapitalization costs determine how a firm's leverage and price in the output market correlate, with high costs conducive to a negative relationship.

In this paper we examine the effects of different competitive conditions on the determination and evaluation of strategies of corporate social responsibility (CSR). Although the mainstream of current thinking in business ethics recognizes that a firm should invest in social responsibility, the normative theory on how specific competitive conditions affect a firm's social responsibility remains underdeveloped. Intensity of competition, risks to reputation and the regulatory environment determine the competitive conditions of a firm. Our central thesis is that differential strength of competition produces differential moral legitimacy of firm behavior. When competition is fierce or weak, different acts or strategies become morally acceptable, as well as economically rational. A firm has to develop its own strategy of social responsibility, in light of its competitive position, as well as ethical considerations. [ABSTRACT FROM AUTHOR]

This article discusses the concept of resource-advantage theory that has been developed in a series of articles in several different disciplines and research traditions including marketing, management, neoclassical economics, institutional economics, socio-economics, Austrian economics and general business. The author discusses how her book on the General Theory of Competition was developed out of this theory and how it relates to the field of marketing. The author discusses the influence the book has had in the marketing world and in the business world in general. The author also thanks colleagues who have reviewed the book.