Competition: A Workhorse, a Sacred Cow or a Lame Duck?

Posted by Social Science Research Network

Competition: A Workhorse, a Sacred Cow or a Lame Duck?

Adriaan Ten Kate Sr. (Independent)

Abstract:      Competition is generally believed to greatly contribute to social welfare and economic progress, and that is the raison d’être of competition policy. In this essay I argue that such expectations are vastly overblown, that competition brings about the envisaged benefits only under specific conditions that are seldom met in the real world. Where competition does work is in research and development, but there traditional competition analysis has little to say due to the unpredictability and the shock-wise nature of innovation. My conclusion is that where competition policy has the rudder of competition analysis, the ship doesn’t move and where the ship moves, competition policy is rudderless.