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WORKABLE COMPETITION

Statistics Directorate    
Definition:
Workable competition is a notion which arises from the observation that since perfect competition does not exist, theories based on it do not provide reliable guides for competition policy.

Context:
The idea was first enunciated by economist J.M. Clark in 1940. He argued that the goal of policy should be to make competition "workable," not necessarily perfect. He proposed criteria for judging whether competition was workable, and this provoked a series of revisions and counter- proposals. The criteria put forward are wide ranging e.g. the number of firms should be at least large as economies of scale permit, promotional expenses should not be excessive and advertising should be informative. No consensus has arisen over what might constitute workable competition but all bodies which administer competition policy in effect employ some version of it.

Source Publication:
Glossary of Industrial Organisation Economics and Competition Law, compiled by R. S. Khemani and D. M. Shapiro, commissioned by the Directorate for Financial, Fiscal and Enterprise Affairs, OECD, 1993.

Hyperlink:
http://www.oecd.org/dataoecd/8/61/2376087.pdf

Statistical Theme: Financial statistics

Created on Thursday, January 3, 2002

Last updated on Sunday, March 17, 2002