![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 ...
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 ...
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. 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, cultu ...
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 valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an I ...
, 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, 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.
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 between ...
,
sociology
Sociology is a social science that focuses on society, human social behavior, patterns of social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of empirical investigation an ...
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 be ...
. Social
psychologists, 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,
anthropologists study the
history
History (derived ) is the systematic study and the documentation of the human activity. The time period of event before the invention of writing systems is considered prehistory. "History" is an umbrella term comprising past events as well ...
and prehistory of competition in various cultures. They also investigate how competition manifested itself in various
cultural 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 overl ...
.
Competition between members of a species ("intraspecific") for resources such as
food,
water
Water (chemical formula ) is an Inorganic compound, inorganic, transparent, tasteless, odorless, and Color of water, nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living ...
,
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 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 f ...
).
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 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. Cha ...
. 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
philosophers and
psychologists 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 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 ...
. 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).
...
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 statistical methods to economic data in order to give empirical content to economic relationships. M. Hashem Pesaran (1987). "Econometrics," '' The New Palgrave: A Dictionary of Economics'', v. 2, p. 8 p. 8 ...
. 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.
Scholarsh ...
. 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. 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, mana ...
, 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. 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) 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 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 ...
'' 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. 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 foc ...
distinguished between
perfect competition 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. 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 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 situation where a speci ...
) or little competition (
oligopoly).
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 whic ...
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 ...
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. ...
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 use ...
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 (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...
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 writers 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 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 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 he ...
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 ...
s, with each brand allocated resources, including a dedicated group of employees willing to champion the brand. Each
brand manager 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 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 monopo ...
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 po ...
,
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. Another component of these activities is the
discovery process, 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. Countries compete to provide the best possible
business 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 territori ...
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 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 situation where a speci ...
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
licenses 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.
In recent decades, competition law has also been sold as good medicine to provide better
public services
A public service is any 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 public sector agencies ...
, 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 ...
s. Hence competition law is closely connected with the law on deregulation of access to markets, providing state aids and subsidies, the
privatisation of state-owned assets and the use of independent sector regulators, such as the United Kingdom telecommunications watchdog
Ofcom. 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 Mediter ...
. The business practices of market traders,
guilds 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 Sherm ...
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 (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 models 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, distribution, and consumption of goods and services.
Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...
,
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 between ...
, 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 premise ...
,
computer science
Computer science is the study of computation, automation, and information. Computer science spans theoretical disciplines (such as algorithms, theory of computation, information theory, and automation) to practical disciplines (includi ...
,
biology
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 i ...
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
modeling
A model is an informative representation of an object, person or system. The term originally denoted the plans of a building in late 16th-century English, and derived via French and Italian ultimately from Latin ''modulus'', a measure.
Models c ...
competing behaviors of interacting
agent
Agent may refer to:
Espionage, investigation, and law
*, spies or intelligence officers
* Law of agency, laws involving a person authorized to act on behalf of another
** Agent of record, a person with a contractual agreement with an insuranc ...
s.
Applications include a wide array of economic phenomena and approaches, such as
auction
An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition ex ...
s,
bargaining,
mergers & 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 aspec ...
pricing,
fair division
Fair division is the problem in game theory of dividing a set of resources among several people who have an entitlement to them so that each person receives their due share. That problem arises in various real-world settings such as division of inh ...
,
duopolies,
oligopolies
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 ...
,
social network
A social network is a social structure made up of a set of social actors (such as individuals or organizations), sets of dyadic ties, and other social interactions between actors. The social network perspective provides a set of methods for ...
formation,
agent-based computational economics
Agent-based computational economics (ACE) is the area of computational economics that studies economic processes, including whole economies, as dynamic systems of interacting agents. As such, it falls in the paradigm of complex adaptive systems. ...
,
general equilibrium
In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ov ...
,
mechanism design
Mechanism design is a field in economics and game theory that takes an objectives-first approach to designing economic mechanisms or incentives, toward desired objectives, in strategic settings, where players act rationally. Because it starts a ...
,
and
voting system
An electoral system or voting system is a set of rules that determine how elections and referendums are conducted and how their results are determined. Electoral systems are used in politics to elect governments, while non-political elections m ...
s;
and across such broad areas as
experimental economics
Experimental economics is the application of experimental methods to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms. Economic expe ...
,
behavioral economics,
information economics
Information economics or the economics of information is the branch of microeconomics that studies how information and information systems affect an economy and economic decisions.
One application considers information embodied in certain types ...
,
industrial organization
In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of (and, therefore, the boundaries between) firms and markets. Industrial organization adds real-world complications to the perf ...
,
and
political economy
Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour ...
.
This research usually focuses on particular sets of strategies known as
"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
INSEAD, a contraction of "Institut Européen d'Administration des Affaires" () is a non-profit business school that maintains campuses in Europe (Fontainebleau, France), Asia (Singapore), the Middle East (Abu Dhabi, UAE), and North America (San ...
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
''The Missouri Review'' is a literary magazine founded in 1978 by the University of Missouri. It publishes fiction, poetry, and creative non-fiction quarterly. With its open submission policy, ''The Missouri Review'' receives 12,000 manuscript ...
'', ''
Boston Review
''Boston Review'' is an American quarterly political and literary magazine. It publishes political, social, and historical analysis, literary and cultural criticism, book reviews, fiction, and poetry, both online and in print. Its signature form ...
'', ''
Indiana Review
''Indiana Review'' (''IR'') is a small, student-run literary magazine at Indiana University Bloomington. Founded in 1976, it has a circulation of about 2,000.
A biannual review, ''IR'' publishes essays, fiction, graphic arts, interviews, poetr ...
'', ''
North American Review
The ''North American Review'' (NAR) was the first literary magazine in the United States. It was founded in Boston in 1815 by journalist Nathan Hale and others. It was published continuously until 1940, after which it was inactive until revived at ...
'' and ''
Southwest Review
The ''Southwest Review'' is a literary journal published quarterly, based on the Southern Methodist University campus in Dallas, Texas. It is the third oldest literary quarterly in the United States. The current editor-in-chief is Greg Browndervi ...
''. The
Albee Award, sponsored by the Yale Drama Series, is among the most prestigious playwriting awards.
Philosophy
Margaret Heffernan
Margaret Heffernan (born 1955) is an entrepreneur, CEO, writer and keynote speaker. She is currently a professor of Practice at the University of Bath School of Management in the UK.
Heffernan is the former chief executive officer of five busin ...
'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
Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...
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
Sigmund Freud ( , ; born Sigismund Schlomo Freud; 6 May 1856 – 23 September 1939) was an Austrian neurologist and the founder of psychoanalysis, a clinical method for evaluating and treating pathologies explained as originating in conflicts ...
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
The Oedipus complex (also spelled Œdipus complex) is an idea in psychoanalytic theory. The complex is an ostensibly universal phase in the life of a young boy in which, to try to immediately satisfy basic desires, he unconsciously wishes to hav ...
(after the Greek Mythology figure who accidentally killed his father and married his mother). This is associated with the
phallic stage
In Freudian psychoanalysis, the phallic stage is the third stage of psychosexual development, spanning the ages of three to six years, wherein the infant's libido (desire) centers upon their genitalia as the erogenous zone. When children become ...
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
Gandhi
Mohandas Karamchand Gandhi (; ; 2 October 1869 – 30 January 1948), popularly known as Mahatma Gandhi, was an Indian lawyer, anti-colonial nationalist Quote: "... marks Gandhi as a hybrid cosmopolitan figure who transformed ... anti- ...
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
Politics (from , ) is the set of activities that are associated with making decisions in groups, or other forms of power relations among individuals, such as the distribution of resources or status. The branch of social science that stud ...
. In
democracies
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 go ...
, an
election
An election is a formal group decision-making process by which a population chooses an individual or multiple individuals to hold public office.
Elections have been the usual mechanism by which modern representative democracy has opera ...
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
funding
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 use ...
. 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
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 use ...
and
power
Power most often refers to:
* Power (physics), meaning "rate of doing work"
** Engine power, the power put out by an engine
** Electric power
* Power (social and political), the ability to influence people or events
** Abusive power
Power may a ...
.
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 ...
s. Each
country
A country is a distinct part of the world, such as a state, nation, or other 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, sovereign state, while ...
or
nationality
Nationality is a legal identification of a person in international law, establishing the person as a subject, a ''national'', of a sovereign state. It affords the state jurisdiction over the person and affords the person the protection of the ...
struggles for world dominance, power, or
military
A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare. It is typically authorized and maintained by a sovereign state, with its members identifiable by their distinct ...
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 territori ...
competed against the
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, ...
in the
Cold War for world power, and the two also struggled over the different types of government (in these cases
representative democracy
Representative democracy, also known as indirect democracy, is a type of democracy where elected people represent a group of people, in contrast to direct democracy. Nearly all modern Western-style democracies function as some type of represe ...
and
communism
Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a ...
). The result of this type of competition often leads to worldwide tensions, and may sometimes erupt into
war
War is an intense armed conflict between states, governments, societies, or paramilitary groups such as mercenaries, insurgents, and militias. It is generally characterized by extreme violence, destruction, and mortality, using regular o ...
fare.
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
sport
Sport pertains to any form of competitive physical activity or game that aims to use, maintain, or improve physical ability and skills while providing enjoyment to participants and, in some cases, entertainment to spectators. Sports can, ...
s and
games (such as
fishing
Fishing is the activity of trying to catch fish. Fish are often caught as wildlife from the natural environment, but may also be caught from stocked bodies of water such as ponds, canals, park wetlands and reservoirs. Fishing techniques inclu ...
or
hiking
Hiking is a long, vigorous walk, usually on trails or footpaths in the countryside. Walking for pleasure developed in Europe during the eighteenth century.AMATO, JOSEPH A. "Mind over Foot: Romantic Walking and Rambling." In ''On Foot: A Histor ...
) have been viewed as primarily recreational, most sports are considered competitive. The majority involve competition between two or more persons (sometimes using
horses or
cars
A car or automobile is a motor vehicle with wheels. Most definitions of ''cars'' say that they run primarily on roads, Car seat, seat one to eight people, have four wheels, and mainly transport private transport#Personal transport, people in ...
). For example, in a game of
basketball
Basketball is a team sport in which two teams, most commonly of five players each, opposing one another on a rectangular court, compete with the primary objective of shooting a basketball (approximately in diameter) through the defender's h ...
, 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
Pride is defined by Merriam-Webster as "reasonable self-esteem" or "confidence and satisfaction in oneself". A healthy amount of pride is good, however, pride sometimes is used interchangeably with "conceit" or "arrogance" (among other words) w ...
. In addition, extrinsic rewards may also be given. Athletes, besides competing against other humans, also compete against
nature
Nature, in the broadest sense, is the physical world or universe. "Nature" can refer to the phenomena of the physical world, and also to life in general. The study of nature is a large, if not the only, part of science. Although humans are ...
in sports such as
whitewater kayaking
Whitewater kayaking is an adventure sport where a river is navigated in a decked kayak. Whitewater kayaking includes several styles. River running; where the paddler follows a river and paddles rapids as they travel. Creeking usually involving s ...
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
In sport, a championship is a competition in which the aim is to decide which individual or team is the champion.
Championship systems
Various forms of competition can be referred to by the term championship.
Title match system
In this system ...
.
Competitive sports are governed by codified rules agreed upon by the participants. Violating these rules is considered to be
unfair competition
Unfair may refer to:
* Double Taz and Double LeBron James in multiverses ''fair''; unfairness or injustice
Injustice is a quality relating to unfairness or undeserved outcomes. The term may be applied in reference to a particular event or situ ...
. 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
Gymnastics is a type of sport that includes physical exercises requiring balance, strength, flexibility, agility, coordination, dedication and endurance. The movements involved in gymnastics contribute to the development of the arms, legs, s ...
and competitive
diving
Diving most often refers to:
* Diving (sport), the sport of jumping into deep water
* Underwater diving, human activity underwater for recreational or occupational purposes
Diving or Dive may also refer to:
Sports
* Dive (American football), a ...
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
doubles tennis
Men's doubles, Women's doubles or Mixed doubles are sports having two players per side, including;
* Beach volleyball
* Doubles badminton
* Doubles curling
* Footvolley
* Doubles pickleball
* Doubles squash
* Doubles table tennis
* Doubles ...
, and team sports competition, such as
cricket
Cricket is a bat-and-ball game played between two teams of eleven players on a field at the centre of which is a pitch with a wicket at each end, each comprising two bails balanced on three stumps. The batting side scores runs by str ...
or
football. While most sports competitions are recreation, there exist several
major and
minor professional sports leagues throughout the world. The
Olympic Games
The modern Olympic Games or Olympics (french: link=no, Jeux olympiques) are the leading international sporting events featuring summer and winter sports competitions in which thousands of athletes from around the world participate in a vari ...
, held every four years, is usually regarded as the international pinnacle of sports competition.
Trade
Competition is also found in
trade
Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market.
An early form of trade, barter, saw the direct excha ...
. 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
The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
can be considered a crude, but widely used proxy for international competitiveness across levels:
country
A country is a distinct part of the world, such as a state, nation, or other 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, sovereign state, while ...
,
industry
Industry may refer to:
Economics
* Industry (economics), a generally categorized branch of economic activity
* Industry (manufacturing), a specific branch of economic activity, typically in factories with machinery
* The wider industrial sector ...
or even
firm
A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared go ...
. 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
Neurosis is a class of functional mental disorders involving chronic distress, but neither delusions nor hallucinations. The term is no longer used by the professional psychiatric community in the United States, having been eliminated from th ...
; 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-worth
Self-esteem is confidence in one's own worth or abilities. Self-esteem encompasses beliefs about oneself (for example, "I am loved", "I am worthy") as well as emotional states, such as triumph, despair, pride, and shame. Smith and Mackie (2007) d ...
. 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
narcissistic
Narcissism is a self-centered personality style characterized as having an excessive interest in one's physical appearance or image and an excessive preoccupation with one's own needs, often at the expense of others.
Narcissism exists on a co ...
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
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 ...
. 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 Darwinist
Social Darwinism refers to various theories and societal practices that purport to apply biological concepts of natural selection and survival of the fittest to sociology, economics and politics, and which were largely defined by scholars in We ...
s 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