Productive and Unproductive Competition: A Unified Framework
Economia Politica (Journal of Analytical and Institutional Economics), 2017
Posted: 6 May 2014 Last revised: 4 Mar 2018
Date Written: September 30, 2017
Conventional theories of competition classify contests as being either ‘‘productive,’ when the competitive efforts generate a surplus for society, or ‘‘unproductive,’ when competition generates no social surplus and merely distributes already existing resources. These two discrete categories of competition create a division of real-world situations into analytical categories that fails to recognize the entire spectrum of competitive activities. Taking the existing models of productive and unproductive competition as benchmark idealizations, this paper revisits the relationship between the privately and socially optimal levels of competition in the full range of intermediate cases, as well as in the extremum cases of destructive and super-productive competition.
Keywords: Contests, Rent seeking, Unproductive competition, Productive competition, Patent races
JEL Classification: C72, D72
Suggested Citation: Suggested Citation