Competition policy in dynamic markets

Abstract

Competition and antitrust policies have been based on a scholarly tradition focusing on static models and static analyses of industrial organization. However, recent developments in the industrial organization literature have provided significant advances moving beyond the traditional static models and the pre-occupation with price competition. In particular, the field has now developed to consider the organization of industries in a dynamic context. These new approaches are dynamic in the sense that performance is related to variations in the products available to consumers, as well as variations in firm competencies, ranking, growth, entry and exit. The development of the industrial organization literature also incorporates models of industry and market evolution. The purpose of this paper is to provide a framework linking what is known in the industrial organization literature on the dynamics and evolution of markets to one of the major policy instruments — competition policy. This framework provides a basis for understanding the contributions of the contents of the Special Issue devoted to Competition Policy in Dynamic Markets.