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The Economics of Competition

The Race to Monopoly

By George G Djolov

Published July 26th 2006 by Routledge – 350 pages

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    Description

    A comprehensive examination of the ways competition and innovations level the playing field in the free market

    The Economics of Competition uses the South African pharmaceutical industry as a case study to cogently challenge accepted economic and regulatory views on competition and monopoly, then re-establishes and emphasizes the importance of foundational economic principles. The book comprehensively explores the concept that monopoly is self-limiting within unrestricted competition, as well as the various market features of competition, innovation, and market power. This detailed examination broadens understanding of the economics of competition for both scholars and practitioners.

    Competition is seen as a continuous process in a free market. The Economics of Competition thoughtfully explores the competitive process in its two mechanisms, the transfer of market share from one rival to another, and innovation of a new product, new method of production, new market opening, or new source of supply of raw materials. The dynamic nature of the marketplace is thoroughly examined from the author's inside view of the South African pharmaceutical industry. This provides a rare opportunity to closely examine an industry considered to be a monopoly while actively applying economic theories of competition and freedom of choice. The effects of public policy, legislation, and pricing regulations are discussed in detail. The book has several tables and figures to enhance clarity and is extensively referenced.

    The Economics of Competition discusses:
    * monopoly and rivalry in the free market
    * theories of perfect competition
    * innovation as a controlling variable
    * pricing and price differentiation
    * barriers to competition—including historical and contemporary legislative barriers
    * horizontal mergers and acquisitions as a key aspect of market power
    * and more!The Economics of Competition is insightful, thought-provoking reading for policymakers as well as anyone practising antitrust law, microeconomics, industrial economics, managerial economics, marketing strategy, theoretical public health, and students and educators of marketing and economics.

    Contents

    • Foreword (W. Duncan Reekie)
    • Preface
    • Acknowledgments
    • Chapter 1. Introduction
    • Chapter 2. Competition and Monopoly Power
    • Chapter 3. Perfect Competition
    • The Social Costs of Monopoly Power
    • The Persistence of Cartels
    • The Price-Cost Margin
    • Chapter 4. Departures from Perfect Competition
    • Innovation and Competition
    • Erosion of Monopoly Power Under Innovation
    • Chapter 5. Rivalry and the Competitive Process
    • The Clemens-Cocks Model
    • Downie’s Conjecture of the Competitive Process
    • Chapter 6. Barriers to Competition
    • Economies of Scale
    • Product Differentiation
    • Absolute Cost Advantages
    • Redefining Barriers to Competition
    • Regulation and Economic Welfare
    • Chapter 7. Regulating the Competitive Process
    • Chapter 8. The Structure-Conduct-Performance Model
    • The Cournot Model
    • The Stackelberg Model
    • The Bertrand Model
    • Concentration in Practice
    • Chapter 9. Firm Dominance and Price Decisions
    • Excessive Pricing
    • Pricing Below Marginal Cost or Average Variable Cost
    • Price Discrimination
    • Marketing
    • Chapter 10. Measuring Market Concentration
    • Calculating Concentration Under Data Shortages
    • Market Definition and Concentration
    • Chapter 11. The Market Structure of the SA Pharmaceutical Industry
    • The Private Sector
    • The Public Sector
    • The Evolution of the Public and Private Sectors
    • The Legislature and the Industry
    • Parallel Importation and Single-Exit Pricing
    • Compulsory Licensing and Generic Substitution
    • Chapter 12. The Pharmaceutical Industry and Monopoly Power
    • Testing for Proposition 1
    • Testing for Proposition 2
    • Testing for Proposition 3
    • Chapter 13. The Impact of Mergers and Acquisitions
    • The Private Sector
    • The Public Sector
    • Chapter 14. A Microeconomic Inspection of the Industry
    • Sample-Size Selection
    • The Private Market
    • The Public Sector Market
    • Synopsis of the Microeconomic Study
    • Chapter 15. Conclusion
    • Notes
    • Bibliography
    • Index

    Author Bio

    George G Djolov, MCOM, is Head of the Socio-Economic Integration division at South Africa’s central statistics office, Statistics South Africa in Pretoria, South Africa. He is the past Executive Chief Economist of the federation of South Africa’s chambers of commerce and industry, CHAMSA. He was formerly the Chief Economist of the Pharmaceutical Manufacturers’ Association of South Africa, the body representing local and multinational ethical drug companies in South Africa. Mr. Djolov has published in several journals, including the Journal of Third World Studies, Journal of World Intellectual Property, Economic Affairs, Estudios de Economia, the South African Journal of Economic and Management Sciences, and the South African Medical Journal. He is a member of the Eastern Economic Association and the Economic Society of South Africa. His areas of interest include the economics of competition, monopoly power, international trade, political economy, public policy, and regulation.

    Name: The Economics of Competition: The Race to Monopoly (Paperback) – Routledge 
    Description: By George G Djolov. A comprehensive examination of the ways competition and innovations level the playing field in the free marketThe Economics of Competition uses the South African pharmaceutical industry as a case study to cogently challenge accepted economic and...
    Categories: Macroeconomics, Microeconomics