![Athletics competitions](https://upload.wikimedia.org/wikipedia/commons/4/44/Athletics_competitions.jpg)
Competition is a
rivalry
A rivalry is the state of two people or groups engaging in a lasting competitive relationship. Rivalry is the "against each other" spirit between two competing sides. The relationship itself may also be called "a rivalry", and each participant o ...
where two or more parties strive for a common
goal
A goal is an idea of the future or desired result that a person or a group of people envision, plan and commit to achieve. People endeavour to reach goals within a finite time by setting deadlines.
A goal is roughly similar to a purpose or ai ...
which cannot be shared: where one's gain is the other's loss (an example of which is a
zero-sum game
Zero-sum game is a mathematical representation in game theory and economic theory of a situation which involves two sides, where the result is an advantage for one side and an equivalent loss for the other. In other words, player one's gain is e ...
). Competition can arise between entities such as organisms, individuals, economic and social groups, etc. The rivalry can be over attainment of any exclusive goal, including
recognition
Recognition may refer to:
*Award, something given in recognition of an achievement
Machine learning
*Pattern recognition, a branch of machine learning which encompasses the meanings below
Biometric
* Recognition of human individuals, or biomet ...
:
Competition occurs in nature, between living organisms which co-exist in the same
environment
Environment most often refers to:
__NOTOC__
* Natural environment, all living and non-living things occurring naturally
* Biophysical environment, the physical and biological factors along with their chemical interactions that affect an organism or ...
. Animals compete over water supplies, food, mates, and other
biological resources In biology and ecology, a resource is a substance or object in the environment required by an organism for normal growth, maintenance, and reproduction. Resources can be consumed by one organism and, as a result, become unavailable to another organi ...
.
Human
Humans (''Homo sapiens'') are the most abundant and widespread species of primate, characterized by bipedalism and exceptional cognitive skills due to a large and complex brain. This has enabled the development of advanced tools, culture, ...
s usually
compete for food and mates, though when these needs are met deep rivalries often arise over the pursuit of
wealth
Wealth is the abundance of Value (economics), valuable financial assets or property, physical possessions which can be converted into a form that can be used for financial transaction, transactions. This includes the core meaning as held in the ...
, power, prestige, and
fame when in a static, repetitive, or unchanging environment. Competition is a major tenet of
market economies
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers are ...
and business, often associated with business competition as companies are in competition with at least one other firm over the same group of customers. Competition inside a company is usually stimulated with the larger purpose of meeting and reaching higher quality of services or improved products that the company may produce or develop.
Competition is often considered to be the opposite of
cooperation
Cooperation (written as co-operation in British English) is the process of groups of organisms working or acting together for common, mutual, or some underlying benefit, as opposed to working in competition for selfish benefit. Many animal a ...
, however in the real world, mixtures of cooperation and competition are the norm. In economies, as the philosopher R. G. Collingwood argued "the presence of these two opposites together is essential to an economic system. The parties to an economic action co-operate in competing, like two chess players". Optimal strategies to achieve goals are studied in the branch of mathematics known as
game theory
Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has appli ...
.
Competition has been studied in several fields, including
psychology
Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts. It is an academic discipline of immense scope, crossing the boundaries betwe ...
,
sociology
Sociology is a social science that focuses on society, human social behavior, patterns of Interpersonal ties, social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of Empirical ...
and
anthropology
Anthropology is the scientific study of humanity, concerned with human behavior, human biology, cultures, societies, and linguistics, in both the present and past, including past human species. Social anthropology studies patterns of behavi ...
. Social
psychologist
A psychologist is a professional who practices psychology and studies mental states, perceptual, cognitive, emotional, and social processes and behavior. Their work often involves the experimentation, observation, and interpretation of how indi ...
s, for instance, study the nature of competition. They investigate the natural urge of competition and its circumstances. They also study
group dynamics
Group dynamics is a system of behaviors and psychological processes occurring within a social group (''intra''group dynamics), or between social groups ( ''inter''group dynamics). The study of group dynamics can be useful in understanding decision- ...
, to detect how competition emerges and what its effects are.
Sociologists, meanwhile, study the effects of competition on society as a whole. Additionally,
anthropologist
An anthropologist is a person engaged in the practice of anthropology. Anthropology is the study of aspects of humans within past and present societies. Social anthropology, cultural anthropology and philosophical anthropology study the norms and ...
s study the
history
History (derived ) is the systematic study and the documentation of the human activity. The time period of event before the History of writing#Inventions of writing, invention of writing systems is considered prehistory. "History" is an umbr ...
and prehistory of competition in various cultures. They also investigate how competition manifested itself in various
cultural
Culture () is an umbrella term which encompasses the social behavior, institutions, and Social norm, norms found in human Society, societies, as well as the knowledge, beliefs, arts, laws, Social norm, customs, capabilities, and habits of the ...
settings in the past, and how competition has developed over time.
Biology and ecology
Competition within, between, and among species is one of the most important forces in biology, especially in the field of
ecology
Ecology () is the study of the relationships between living organisms, including humans, and their physical environment. Ecology considers organisms at the individual, population, community, ecosystem, and biosphere level. Ecology overlaps wi ...
.
Competition between members of a species ("intraspecific") for resources such as
food
Food is any substance consumed by an organism for nutritional support. Food is usually of plant, animal, or fungal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals. The substance is inge ...
,
water
Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as a ...
,
territory
A territory is an area of land, sea, or space, particularly belonging or connected to a country, person, or animal.
In international politics, a territory is usually either the total area from which a state may extract power resources or a ...
, and
sunlight
Sunlight is a portion of the electromagnetic radiation given off by the Sun, in particular infrared, visible, and ultraviolet light. On Earth, sunlight is scattered and filtered through Earth's atmosphere, and is obvious as daylight when t ...
may result in an increase in the frequency of a variant of the species best suited for survival and reproduction until its fixation within a population. However, competition among resources also has a strong tendency for diversification between members of the same species, resulting in coexistence of competitive and non-competitive strategies or cycles between low and high competitiveness. Third parties within a species often favour highly competitive strategies leading to species extinction when environmental conditions are harsh (
evolutionary suicide Evolutionary suicide is an evolutionary phenomenon in which the process of adaptation causes the population to become extinct. For example, individuals might be selected to switch from eating mature plants to seedlings, and thereby deplete their foo ...
).
Competition is also present between species ("interspecific"). When resources are limited, several species may depend on these resources. Thus, each of the species competes with the others to gain access to the resources. As a result, species less suited to compete for the resources may
die out unless they
adapt
ADAPT (formerly American Disabled for Attendant Programs Today) is a United States grassroots disability rights organization with chapters in 30 states and Washington, D.C. They use nonviolent direct action in order to bring about disability just ...
by character dislocation, for instance. According to
evolutionary theory
Evolution is change in the heritable characteristics of biological populations over successive generations. These characteristics are the expressions of genes, which are passed on from parent to offspring during reproduction. Variation ...
, this competition within and between species for resources plays a significant role in
natural selection
Natural selection is the differential survival and reproduction of individuals due to differences in phenotype. It is a key mechanism of evolution, the change in the heritable traits characteristic of a population over generations. Charle ...
. At shorter time scales, competition is also one of the most important factors controlling diversity in ecological communities, but at larger scales expansion and contraction of ecological space is a much more larger factor than competition.
This is illustrated by living plant communities where asymmetric competition and competitive dominance frequently occur.
Multiple examples of symmetric and asymmetric competition also exist for animals.
Consumer competitions - games of luck or skill
In Australia, New Zealand and the United Kingdom, competitions or lotto are the equivalent of what are commonly known as
sweepstakes
A sweepstake is a type of contest where a prize or prizes may be awarded to a winner or winners. Sweepstakes began as a form of lottery that were tied to products sold. In response, the FCC and FTC refined U.S. broadcasting laws (creating the ...
in the United States. The correct technical name for Australian consumer competitions is a trade promotion lottery or lotto.
Competition or trade promotion lottery entrants enter to win a prize or prizes, hence many entrants are all in competition, or competing for a limited number of prizes.
A trade promotion lottery or competition is a free entry lottery run to promote goods or services supplied by a business. An example is where you purchase goods or services and then given the chance to enter into the lottery and possibly win a prize. A trade promotion lottery can be called a lotto, competition, contest, sweepstake, or giveaway.
Such competitions can be games of luck (randomly drawn) or skill (judged on an entry question or submission), or possibly a combination of both.
People that enjoy entering competitions are known as compers.
Many compers attend annual national conventions. In 2012 over 100 members of the online competitions community of lottos.com.au from around Australia met on the Gold Coast, Queensland to discuss competitions.
Competitiveness
Many
philosopher
A philosopher is a person who practices or investigates philosophy. The term ''philosopher'' comes from the grc, φιλόσοφος, , translit=philosophos, meaning 'lover of wisdom'. The coining of the term has been attributed to the Greek th ...
s and
psychologist
A psychologist is a professional who practices psychology and studies mental states, perceptual, cognitive, emotional, and social processes and behavior. Their work often involves the experimentation, observation, and interpretation of how indi ...
s have identified a trait in most living organisms which can drive the particular organism to compete. This trait, called competitiveness, is viewed as an innate
biological
Biology is the scientific study of life. It is a natural science with a broad scope but has several unifying themes that tie it together as a single, coherent field. For instance, all organisms are made up of cells that process hereditary in ...
trait which coexists along with the urge for survival. Competitiveness, or the inclination to compete, though, has become synonymous with aggressiveness and ambition in the
English language
English is a West Germanic language of the Indo-European language family, with its earliest forms spoken by the inhabitants of early medieval England. It is named after the Angles, one of the ancient Germanic peoples that migrated to the is ...
. More advanced
civilization
A civilization (or civilisation) is any complex society characterized by the development of a state, social stratification, urbanization, and symbolic systems of communication beyond natural spoken language (namely, a writing system).
Ci ...
s integrate aggressiveness and competitiveness into their
interactions
Interaction is action that occurs between two or more objects, with broad use in philosophy and the sciences. It may refer to:
Science
* Interaction hypothesis, a theory of second language acquisition
* Interaction (statistics)
* Interactions o ...
, as a way to distribute resources and adapt. Many plants compete with neighboring ones for sunlight.
The term also applies to
econometrics
Econometrics is the application of Statistics, statistical methods to economic data in order to give Empirical evidence, empirical content to economic relationships.M. Hashem Pesaran (1987). "Econometrics," ''The New Palgrave: A Dictionary of ...
. Here, it is a comparative measure of the ability and performance of a firm or sub-sector to sell and produce/supply goods and/or services in a given market. The two academic bodies of thought on the assessment of competitiveness are the Structure Conduct Performance Paradigm and the more contemporary New Empirical Industrial Organisation model. Predicting changes in the competitiveness of business sectors is becoming an integral and explicit step in public policymaking. Within capitalist economic systems, the drive of enterprises is to maintain and improve their own competitiveness.
Education
Competition is a major factor in education. On a global scale, national education systems, intending to bring out the best in the next generation, encourage competitiveness among students through
scholarships
A scholarship is a form of financial aid awarded to students for further education. Generally, scholarships are awarded based on a set of criteria such as academic merit, diversity and inclusion, athletic skill, and financial need.
Scholarshi ...
. Countries such as England and Singapore have
special education
Special education (known as special-needs education, aided education, exceptional education, alternative provision, exceptional student education, special ed., SDC, or SPED) is the practice of educating students in a way that accommodates th ...
programmes which cater for specialist students, prompting charges of
academic elitism
Elitism is the belief or notion that individuals who form an elite—a select group of people perceived as having an intrinsic quality, high intellect, wealth, power, notability, special skills, or experience—are more likely to be construc ...
. Upon receipt of their academic results, students tend to compare their grades to see who is better. In severe cases, the pressure to perform in some countries is so high that it can result in stigmatization of intellectually deficient students, or even suicide as a consequence of failing the exams; Japan being a prime example (see
Education in Japan
Education in Japan is managed by the Ministry of Education, Culture, Sports, Science and Technology (MEXT) of Japan. Education is compulsory at the elementary and lower secondary levels. Most students attend public schools through the lower ...
). This has resulted in critical re-evaluation of examinations as a whole by educationalists . Critics of competition as a motivating factor in education systems, such as
Alfie Kohn
Alfie Kohn (born October 15, 1957) is an American author and lecturer in the areas of education, parenting, and human behavior. He is a proponent of progressive education and has offered critiques of many traditional aspects of parenting, manag ...
, assert that competition actually has a net negative influence on the achievement levels of students, and that it "turns all of us into losers". Economist
Richard Layard
Peter Richard Grenville Layard, Baron Layard FBA (born 15 March 1934) is a British labour economist, currently working as programme director of the Centre for Economic Performance at the London School of Economics.
Layard was Senior Research ...
has commented on the harmful effects, stating "people feel that they are under a great deal of pressure. They feel that their main objective in life is to do better than other people. That is certainly what young people are being taught in school every day. And it's not a good basis for a society."
However, other studies such as the
Torrance Tests of Creative Thinking
Torrance, also spelled Torrence, is an originally Scottish surname. Torrance may also refer to:
Places
*Torrance, California, United States
*Torrance, East Dunbartonshire, Scotland
**Torrance railway station
*Torrance, Ontario, Canada
*Torrance, ...
show that the effect of competition on students depends on each individual's level of
agency
Agency may refer to:
Organizations
* Institution, governmental or others
** Advertising agency or marketing agency, a service business dedicated to creating, planning and handling advertising for its clients
** Employment agency, a business that ...
. Students with a high level of agency thrive on competition, are self-motivated, and are willing to risk failure. Compared to their counterparts who are low in agency, these students are more likely to be flexible, adaptable and creative as adults.
Economics
Merriam-Webster gives as one definition of competition (relating to
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
) as "
..rivalry: such as
..the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms".
Adam Smith
Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——— ...
in his 1776 book ''
The Wealth of Nations
''An Inquiry into the Nature and Causes of the Wealth of Nations'', generally referred to by its shortened title ''The Wealth of Nations'', is the ''magnum opus'' of the Scottish economist and moral philosopher Adam Smith. First published in 1 ...
'' and later economists described competition in general as allocating productive
resource
Resource refers to all the materials available in our environment which are technologically accessible, economically feasible and culturally sustainable and help us to satisfy our needs and wants. Resources can broadly be classified upon their ...
s to their most highly valued uses and encouraging
efficiency
Efficiency is the often measurable ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without ...
. Later
microeconomic theory
Microeconomics is a branch of mainstream economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics fo ...
distinguished between
perfect competition
In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In Economic model, theoret ...
and
imperfect competition In economics, imperfect competition refers to a situation where the characteristics of an economic market do not fulfil all the necessary conditions of a perfectly competitive market. Imperfect competition will cause market inefficiency when it hap ...
, concluding that no system of resource allocation is more efficient than
perfect competition
In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In Economic model, theoret ...
. Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (
monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
) or little competition (
oligopoly
An oligopoly (from Greek ὀλίγος, ''oligos'' "few" and πωλεῖν, ''polein'' "to sell") is a market structure in which a market or industry is dominated by a small number of large sellers or producers. Oligopolies often result from ...
).
However, competition may also lead to wasted (duplicated) effort and to increased
cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which ...
s (and prices) in some circumstances. For example, the intense competition for the small number of
top jobs in music and movie-acting leads many aspiring musicians and actors to make substantial investments in training which are not recouped, because only a fraction become successful. Critics have also argued that competition can be destabilizing, particularly competition between certain financial institutions.
Experts have also questioned the constructiveness of competition in profitability. It has been argued that competition-oriented objectives are counterproductive to raising revenues and profitability because they limit the options of strategies for firms as well as their ability to offer innovative responses to changes in the market. In addition, the strong desire to defeat rival firms with competitive prices has the strong possibility of causing
price war
A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the c ...
s.
Another distinction appearing in economics is that between competition as an end-state – as in the case of both perfect and imperfect competition – and competition as a ''process.'' That process is typically seen as a process. It is a process of rivalry between firms (or consumers) intensifying selective pressures for improvements. One can restate this as a process of discovery.
Three levels of end-state economic competition have been classified:
* The most narrow form is direct competition (also called "category competition" or "brand competition"), where
products
Product may refer to:
Business
* Product (business), an item that serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
which perform the same function compete against each other. For example, one brand of pick-up trucks competes with several other brands of pick-up trucks. Sometimes, two companies are rivals and one adds new products to their line, which leads to the other company distributing the same new things, and in this manner they compete.
* The next form is substitute or indirect competition, where products which are close substitutes for one another compete. For example, butter competes with margarine, with mayonnaise and with other various sauces and spreads.
* The broadest form of competition is typically called budget competition. Included in this category is anything on which the
consumer
A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...
might want to spend their available
money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as ...
. For example, a family which has $20,000 available may choose to spend it on many different items, which can all be seen as competing with each other for the family's expenditure. This form of competition is also sometimes described as a competition of "share of wallet".
In addition, companies compete for
financing
Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm uses ...
on the capital markets (equity or debt) in order to generate the necessary cash for their operations.
Investor
An investor is a person who allocates financial capital with the expectation of a future Return on capital, return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some specie ...
typically consider alternative investment opportunities given their risk profile, and not only look at companies just competing on product (direct competitors). Enlarging the investment universe to include indirect competitors leads to a broader peer universe of comparable, indirectly competing companies.
Competition does not necessarily have to be between companies. For example,
business writer
Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit."
Having a business name does not separat ...
s sometimes refer to internal competition. This is competition within companies. The idea was first introduced by
Alfred Sloan
Alfred Pritchard Sloan Jr. ( ; May 23, 1875February 17, 1966) was an American business executive in the automotive industry. He was a long-time president, chairman and CEO of General Motors Corporation. Sloan, first as a senior executive and l ...
at
General Motors
The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...
in the 1920s. Sloan deliberately created areas of overlap between
division
Division or divider may refer to:
Mathematics
*Division (mathematics), the inverse of multiplication
*Division algorithm, a method for computing the result of mathematical division
Military
*Division (military), a formation typically consisting ...
s of the company so that each division would compete with the other divisions. For example, the
Chevrolet
Chevrolet ( ), colloquially referred to as Chevy and formally the Chevrolet Motor Division of General Motors Company, is an American automobile division of the American manufacturer General Motors (GM). Louis Chevrolet (1878–1941) and ous ...
division would compete with the
Pontiac Pontiac may refer to:
*Pontiac (automobile), a car brand
*Pontiac (Ottawa leader) ( – 1769), a Native American war chief
Places and jurisdictions Canada
*Pontiac, Quebec, a municipality
** Apostolic Vicariate of Pontiac, now the Roman Catholic D ...
division for some
market segment
In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as ''segments'') based on some type of shared charact ...
s. The competing brands by the same company allowed parts to be designed by one division and shared by several divisions, for example parts designed by Chevrolet would also be used by Pontiac. In 1931
Procter & Gamble
The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble. It specializes in a wide range of personal health/consumer hea ...
initiated a deliberate system of internal brand-versus-brand rivalry. The company was organized around different
brand
A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
s, with each brand allocated resources, including a dedicated group of employees willing to champion the brand. Each
brand manager
A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
was given responsibility for the success or failure of the brand, and compensated accordingly.
Most businesses also encourage competition between individual employees. An example of this is a contest between sales representatives. The sales representative with the highest sales (or the best improvement in sales) over a period of time would gain benefits from the employer. This is also known as intra-brand competition.
Shalev and Asbjornsen found that success (i.e. the saving resulted) of
reverse auction
A reverse auction (also known as buyer-determined auction or procurement auction) is a type of auction in which the traditional roles of buyer and seller are reversed. Thus, there is one buyer and many potential sellers. In an ordinary auction al ...
s correlated most closely with competition. The literature widely supported the importance of competition as the primary driver of reverse auctions success.
Their findings appear to support that argument, as competition correlated strongly with the reverse auction success, as well as with the number of bidders.
Business and economic competition in most
countries
A country is a distinct part of the world, such as a state (polity), state, nation, or other polity, political entity. It may be a sovereign state or make up one part of a larger state. For example, the country of Japan is an independent, so ...
is often limited or restricted. Competition often is subject to legal restrictions. For example, competition may be legally prohibited, as in the cases of a
government monopoly
In economics, a government monopoly or public monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. It is a monopoly ...
or of a
government-granted monopoly
economics, a government-granted monopoly (also called a "de jure monopoly" or "regulated monopoly") is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good ...
. Governments may institute
tariffs
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...
,
subsidies
A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the ter ...
or other
protectionist
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
measures in order to prevent or reduce competition. Depending on the respective economic policy, pure competition is to a greater or lesser extent regulated by
competition policy
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
and
competition law
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
. Another component of these activities is the
discovery process
Discovery may refer to:
* Discovery (observation), observing or finding something unknown
* Discovery (fiction), a character's learning something unknown
* Discovery (law), a process in courts of law relating to evidence
Discovery, The Discovery ...
, with instances of higher
government regulation
Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...
s typically leading to less competitive businesses being launched.
Nicholas Gruen has referred to ''The Competition Delusion'', in which competition is taken to be unambiguously good, even where that competition leaks into the rules of the game. He claims this drives financialisation (the approximate doubling of proportion of economic resources dedicated to finance and to 'rule making and administering' professions such as law, accountancy and auditing.
Interstate
Competition between countries is quite subtle to detect, but is quite evident in the
world economy
The world economy or global economy is the economy of all humans of the world, referring to the global economic system, which includes all economic activities which are conducted both within and between nations, including production, consumption, ...
. Countries compete to provide the best possible
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
environment for
multinational corporations
A multinational company (MNC), also referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation or a stateless corporation with subtle but contrasting senses, i ...
. Such competition is evident by the policies undertaken by these countries to educate the future workforce. For example, East Asian economies such as Singapore, Japan and South Korea tend to compete by allocating a large portion of the budget to the education sector, including by implementing programmes such as
gifted education
Gifted education (also known as gifted and talented education (GATE), talented and gifted programs (TAG), or G/T education) is a broad group of special practices, procedures, and theories used in the education of children who have been identified a ...
.
Law
![U](https://upload.wikimedia.org/wikipedia/commons/3/3b/U.S._Department_of_Justice_headquarters%2C_August_12%2C_2006.jpg)
Competition
law
Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...
, known in the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
as antitrust law, has three main functions:
* First, it prohibits agreements aimed to restrict free trading between business entities and their customers. For example, a
cartel
A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Mos ...
of sports shops who together fix football-jersey prices higher than normal is illegal.
* Second, competition law can ban the existence or abusive behaviour of a firm dominating the market. One case in point could be a software company who through its
monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
on computer platforms makes consumers use its media player.
* Third, to preserve competitive markets, the law supervises the
mergers and acquisitions
Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
of very large corporations. Competition authorities could for instance require that a large packaging company give plastic bottle
license
A license (or licence) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit).
A license is granted by a party (licensor) to another party (licensee) as an element of an agreeme ...
s to competitors before taking over a major
PET
A pet, or companion animal, is an animal kept primarily for a person's company or entertainment rather than as a working animal, livestock, or a laboratory animal. Popular pets are often considered to have attractive appearances, intelligence, ...
producer.
In all three cases, competition law aims to protect the
welfare of consumers by ensuring that each business must compete for its share of the
market economy
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
.
In recent decades, competition law has also been sold as good medicine to provide better
public services
A public service is any Service (economics), service intended to address specific needs pertaining to the aggregate members of a community. Public services are available to people within a government jurisdiction as provided directly through pub ...
, traditionally funded by
tax
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
-payers and administered by
democratically
Democracy (From grc, δημοκρατία, dēmokratía, ''dēmos'' 'people' and ''kratos'' 'rule') is a form of government in which the people have the authority to deliberate and decide legislation (" direct democracy"), or to choose gov ...
accountable
government
A government is the system or group of people governing an organized community, generally a state.
In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
s. Hence competition law is closely connected with the law on deregulation of access to markets, providing state aids and subsidies, the
privatisation
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
of state-owned assets and the use of independent sector regulators, such as the United Kingdom telecommunications watchdog
Ofcom
The Office of Communications, commonly known as Ofcom, is the government-approved regulatory and competition authority for the broadcasting, telecommunications and postal industries of the United Kingdom.
Ofcom has wide-ranging powers acros ...
. Behind the practice lies the theory, which over the last fifty years has been dominated by
neo-classical economics
Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...
. Markets are seen as the most efficient method of allocating resources, although sometimes
they fail, and regulation becomes necessary to protect the ideal market model. Behind the theory lies the history, reaching back further than the
Roman Empire
The Roman Empire ( la, Imperium Romanum ; grc-gre, Βασιλεία τῶν Ῥωμαίων, Basileía tôn Rhōmaíōn) was the post-Republican period of ancient Rome. As a polity, it included large territorial holdings around the Mediterr ...
. The business practices of market traders,
guilds
A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular area. The earliest types of guild formed as organizations of tradesmen belonging to a professional association. They sometimes ...
and governments have always been subject to scrutiny and sometimes to severe sanctions. Since the twentieth century, competition law has become global. The two largest, most organised and influential systems of competition regulation are
United States antitrust law
In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies. The three main U.S. antitrust statutes are the Sherman ...
and
European Community competition law
European competition law is the competition law in use within the European Union. It promotes the maintenance of competition within the European Single Market by regulating anti-competitive conduct by companies to ensure that they do not cre ...
. The respective national/international authorities, the
U.S. Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
(DOJ) and the
Federal Trade Commission
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
(FTC) in the United States and the
European Commission's Competition Directorate General (DGCOMP) have formed international support- and enforcement-networks. Competition law is growing in importance every day, which warrants for its careful study.
Game theory
Game theory is "the study of
mathematical model
A mathematical model is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling. Mathematical models are used in the natural sciences (such as physics, ...
s of conflict and cooperation between intelligent rational decision-makers."
[ p.&nbs]
1
Chapter-preview links, pp
vii–xi
Game theory is mainly used in
economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and intera ...
,
political science
Political science is the scientific study of politics. It is a social science dealing with systems of governance and power, and the analysis of political activities, political thought, political behavior, and associated constitutions and la ...
, and
psychology
Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts. It is an academic discipline of immense scope, crossing the boundaries betwe ...
, as well as
logic
Logic is the study of correct reasoning. It includes both formal and informal logic. Formal logic is the science of deductively valid inferences or of logical truths. It is a formal science investigating how conclusions follow from premises ...
, computer science, biology and poker. Originally, it mainly addressed
zero-sum game
Zero-sum game is a mathematical representation in game theory and economic theory of a situation which involves two sides, where the result is an advantage for one side and an equivalent loss for the other. In other words, player one's gain is e ...
s, in which one person's gains result in losses for the other participants.
Game theory is a major method used in mathematical economics and business for Economic model, modeling competing behaviors of interacting Agent (economics), agents.
Applications include a wide array of economic phenomena and approaches, such as auctions, bargaining, mergers & acquisitions pricing,
fair division, Duopoly, duopolies, Oligopoly, oligopolies, social network formation, agent-based computational economics,
general equilibrium, mechanism design,
and voting systems;
and across such broad areas as experimental economics,
Behavioral game theory, behavioral economics,
information economics,
industrial organization,
and political economy.
This research usually focuses on particular sets of strategies known as Solution concept, "solution concepts" or "equilibria". A common assumption is that players act rationally. In non-cooperative games, the most famous of these is the Nash equilibrium. A set of strategies is a Nash equilibrium if each represents a best response to the other strategies. If all the players are playing the strategies in a Nash equilibrium, they have no unilateral incentive to deviate, since their strategy is the best they can do given what others are doing.
[Game-theoretic model to examine the two tradeoffs in the acquisition of information for a careful balancing act](_blank)
Research paper INSEAD
Literature
Literary competitions, such as contests sponsored by literary journals, publishing houses and theaters, have increasingly become a means for aspiring writers to gain recognition. Awards for fiction include those sponsored by the ''Missouri Review'', ''Boston Review'', ''Indiana Review'', ''North American Review'' and ''Southwest Review''. The Edward Albee, Albee Award, sponsored by the Yale Drama Series, is among the most prestigious playwriting awards.
Philosophy
Margaret Heffernan's study, ''A Bigger Prize'',
examines the perils and disadvantages of competition in (for example) biology, families, sport, education, commerce and the Soviet Union.
Marx
Karl Marx insisted that "the capitalist system fosters competition and egoism in all its members and thoroughly undermines all genuine forms of community".
It promotes a "climate of competitive egoism and individualism", with competition for jobs and competition between employees; Marx said competition between workers exceeds that demonstrated by company owners.
[
] He also points out that competition separates individuals from one another and while concentration of workers and development of better communication alleviate this, they are not a decision.
Freud
Sigmund Freud explained competition as a primal dilemma in which all infants find themselves. The infant competes with other family members for the attention and affection of the parent of the opposite sex or the primary caregiving parent. During this time, a boy develops a deep fear that the father (the son's prime rival) will punish him for these feelings of desire for the mother, by castrating him. Girls develop penis envy towards all males. The girl's envy is rooted in the biologic fact that, without a penis, she cannot sexually possess mother, as the infantile id demands, resultantly, the girl redirects her desire for sexual union upon father in competitive rivalry with her mother. This constellation of feelings is known as Oedipus Complex (after the Greek Mythology figure who accidentally killed his father and married his mother). This is associated with the phallic stage of childhood development where intense primal emotions of competitive rivalry with (usually) the parent of the same sex are rampant and create a crisis that must be negotiated successfully for healthy psychological development to proceed. Unresolved Oedipus complex competitiveness issues can lead to lifelong neuroses manifesting in various ways related to an overdetermined relationship to competition.
Mahatma Gandhi
Mahatma Gandhi, Gandhi speaks of egoistic competition.
[
] For him, such qualities glorified and/or left unbridled, can lead to violence, conflict, discord and destructiveness. For Gandhi, competition comes from the ego, and therefore society must be based on mutual love, cooperation and sacrifice for the well-being of humanity.
In the society desired by Gandhi, each individual will cooperate and serve for the welfare of others and people will share each other's joys, sorrows and achievements as a norm of a social life. For him, in a non-violent society, competition does not have a place and this should become realized with more people making the personal choice to have fewer tendencies toward egoism and selfishness.
Politics
Competition is also found in politics. In democracy, democracies, an election is a competition for an elected office. In other words, two or more candidates strive and compete against one another to attain a position of power. The winner gains the seat of the elected office for a predefined period of time, towards the end of which another election is usually held to determine the next holder of the office.
In addition, there is inevitable competition inside a government. Because several offices are appointed, potential candidates compete against the others in order to gain the particular office. Departments may also compete for a limited amount of resources, such as for budget, funding. Finally, where there are party systems, elected leaders of different parties will ultimately compete against the other parties for
law
Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...
s, funding and political power, power.
Finally, competition also exists between
government
A government is the system or group of people governing an organized community, generally a state.
In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
s. Each country or nationality struggles for world dominance, power, or military strength. For example, the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
competed against the Soviet Union in the Cold War for world power, and the two also struggled over the different types of government (in these cases representative democracy and communism). The result of this type of competition often leads to worldwide tensions, and may sometimes erupt into warfare.
Sports
![US Olympic Committee Headquarters by David Shankbone](https://upload.wikimedia.org/wikipedia/commons/f/f2/US_Olympic_Committee_Headquarters_by_David_Shankbone.jpg)
While some sports and games (such as fishing or hiking) have been viewed as primarily recreational, most sports are considered competitive. The majority involve competition between two or more persons (sometimes using horse racing, horses or auto racing, cars). For example, in a game of basketball, two teams compete against one another to determine who can score the most points. When there is no set reward for the winning team, many players gain a sense of pride. In addition, extrinsic rewards may also be given. Athletes, besides competing against other humans, also compete against nature in sports such as whitewater kayaking or mountaineering, where the goal is to reach a destination, with only natural barriers impeding the process. A regularly scheduled (for instance annual) competition meant to determine the "best" competitor of that cycle is called a championship.
Competitive sports are governed by codified rules agreed upon by the participants. Violating these rules is considered to be unfair competition. Thus, sports provide artificial (not natural) competition; for example, competing for control of a ball, or defending territory on a playing field is not an innate biological factor in humans. Athletes in sports such as gymnastics and competitive Diving (sport), diving compete against each other in order to come closest to a conceptual ideal of a perfect performance, which incorporates measurable criteria and standards which are translated into numerical ratings and scores by appointed judges.
Sports competition is generally broken down into three categories: individual sports, such as archery; dual sports, such as tennis, doubles tennis, and team sports competition, such as cricket or football. While most sports competitions are recreation, there exist several Major professional sports leagues in the United States and Canada, major and minor league, minor professional sports leagues throughout the world. The Olympic Games, held every four years, is usually regarded as the international pinnacle of sports competition.
Trade
Competition is also found in trade. For nations, as well as firms it is important to understand trade dynamics in order to market their goods and services effectively in international markets. Balance of trade can be considered a crude, but widely used proxy for international competitiveness across levels: country, Industry (economics), industry or even business, firm. Research data hints that exporting firms have a higher survival rate and achieve greater employment growth compared with non-exporters.
Using a simple concept to measure heights that firms can climb may help improve execution of strategies. International competitiveness can be measured on several criteria but few are as flexible and versatile to be applied across levels as Trade Competitiveness Index (TCI)
Hypercompetitiveness
The tendency toward extreme, unhealthy competition has been termed hypercompetitiveness. This concept originated in Karen Horney's theories on neurosis; specifically, the highly aggressive personality type which is characterized as "moving against people". In her view, some people have a need to compete and win at all costs as a means of maintaining their self-esteem, self-worth. These individuals are likely to turn any activity into a competition, and they will feel threatened if they find themselves losing. Researchers have found that men and women who score high on the trait of hypercompetitiveness are more Narcissism, narcissistic and less psychologically healthy than those who score low on the trait. Hypercompetitive individuals generally believe that winning is the only thing that matters.
Consequences
Competition can have both beneficial and detrimental effects. Many evolutionary biologists view inter-species and intra-species competition as the driving force of adaptation, and ultimately of evolution. However, some biologists disagree, citing competition as a driving force only on a small scale, and citing the larger scale drivers of evolution to be abiotic factors (termed 'Room to Roam').
Richard Dawkins prefers to think of evolution in terms of competition between single genes, which have the welfare of the organism 'in mind' only insofar as that welfare furthers their own selfish drives for replication (termed the 'selfish gene').
Some social Darwinists claim that competition also serves as a mechanism for determining the best-suited group; politically, economically and ecologically. Positively, competition may serve as a form of recreation or a challenge provided that it is non-hostile. On the negative side, competition can cause injury and loss to the organisms involved, and drain valuable resources and energy. In the human species competition can be expensive on many levels, not only in lives lost to war, physical injuries, and damaged psychological well-beings, but also in the health effects from everyday civilian life caused by work stress, long work hours, abusive working relationships, and poor working conditions, that detract from the enjoyment of life, even as such competition results in financial gain for the owners.
See also
* Asymmetric competition
* Biological interaction
* Competition regulator
* Competitor analysis
* Conflict of interest
* Cooperation
* Ecological model of competition
* Monopolistic competition
* Non-zero-sum game
* Win-win game
* Planned economy
* Prisoner's dilemma
* Sharing
* Student competitions
* Zero-profit condition
* Zero-sum
References
{{Authority control
Competition,
Social events