An important issue in the theory of industrial organization involves the question of market performance. This paper deals with the static-dynamic efficiency trade-off. Theories of competition are reviewed and classified. The concept of workable competition offers a verbal listing of conditions facilitating both efficiency dimensions. A crucial feature of workable competition is the force of potential rivalry. The study of sources of potential entry and market games identifies cases of intermediate competition which can serve as a welfare-theoretic yardstick for the evaluation of market performance. The nature of multimarket competition proves to be essential.
|Number of pages||31|
|Publication status||Published - 1 Mar 1992|