Escape from Equilibrium

Thinking Historically about Firm Responses to Competition

Bibliographic Data

ID12680557
AuthorsMargaret C Levenstein (0000-0002-9641-2725, corresponding author)
Year2012
Volume13
Issue4
Pages710-728
Publication date2012-09-11
Open AccessYes
TypeARTICLE
VenueEnterprise & Society (JOURNAL)
Journal identifiersISSN: 1467-2227 • E-ISSN: 1467-2235
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1093/es/khs025
OpenAlexW4249159939
LanguageEN
Citations received4
References cited23

Firms use a variety of strategies to limit competition that would otherwise erode profits. Firms innovate, creating new technologies, new markets, and new firms. Innovations allow them to distinguish their products or lower their costs and thus maintain profits. Their ability to innovate depends on the existence of social institutions that allow them to amass the resources—labor, capital, and information—necessary to compete successfully. Firms also maintain profits by manipulating the political process to maintain preferred access to markets, technology and resources. Finally, firms take actions to limit competition directly. Waves of consolidation, justified by an assumption of the inevitability of increasing firm size, have limited competition and entrepreneurship. Cartels and other forms of collusion, sometimes thought to have disappeared from US markets after the adoption of the Sherman Antitrust Act in 1890, are still active in a wide variety of national and international markets

Business · Collusion · Competition (biology · Consolidation (business · Economics · Entrepreneurship · Industrial organization · Market economy · Politics · Variety (cybernetics · Economic Theory and Institutions · Global trade and economics · Merger and Competition Analysis · Finance

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