Competition: Theoretical paramaterizations and empirical measures

Research output: Contribution to journalArticleScientificpeer-review

52 Citations (Scopus)


This paper proposes relative profits (RP) as a robust measure of competition. I consider nine different parameterizations of competition and show that more intense competition increases the profits of a firm relative to a less efficient firm. Further, popular competition measures like the price-cost margin (PCM) and Herfindahl index (H) can either increase or decrease in response to more intense competition. In this sense, RP is a more robust competition measure than PCM and H.
Original languageEnglish
Pages (from-to)587-611
JournalJournal of Institutional and Theoretical Economics
Issue number4
Publication statusPublished - 2008


Dive into the research topics of 'Competition: Theoretical paramaterizations and empirical measures'. Together they form a unique fingerprint.

Cite this