Competition (Economics)

Der Wettbewerb ist das wichtigste Gestaltungselement der Market economy. Wettbewerb bedeutet, dass sich Personen etwas streitig machen. Als Entscheidungs-, Informations- und Motivationssystem sorgt der Wettbewerb für die Steuerung und Kontrolle einzelwirtschaftlicher Prozesse innerhalb des marktwirtschaftlichen Bereichs. Anbieter und Nachfrager müssen ihren Geschäftspartnern günstige Geschäftsbedingungen einräumen, um auf den Märkten bestehen zu können.

Functions of competition

Competition is understood as decentralized decision-making by securing individual freedom of action. Freedom of discovery and unpredictability are essential here. Basically, the functions of competition can be described in two ways:

The economic incentives provide the impetus for constant rivalry for business deals and market shares. As part of this economic incentive function, companies are forced to adapt their offerings to consumer preferences (control function), to use efficient production processes (Allocation function), to realize technical progress (innovation function) and to react flexibly to changes in competition (adaptation function).

In addition to this economic function, competition also fulfills a social function in that it gives companies the opportunity to independently dispose of the financial resources, consumers the choice between alternative offers and gives employees the chance to change their job.

Types of competition

It is characteristic of competition that its effects and forms cannot be predetermined. Nevertheless, effective competition is not a coincidence, but the rational result of set framework conditions. According to this, competition can be determined by market, market structure and market result. The markets include consumer, capital goods and service markets.

In the market structure, the number, structure, type, size and ownership structure of market participants and products are of interest as static components. The barriers to entry and innovations for the development of the market are of particular dynamic interest. The control of the market result ultimately tries to draw conclusions for the design of the competitive framework from indicators such as price, quality, technology and profit.

Requirements for competition

On the one hand, companies must have a competitive spirit, which is understood to mean the will to face both current and potential competition.

In addition to a competitive spirit, it is also necessary that new providers can enter the market. By entering the market, the established providers experience additional competition in that the supply capacity is expanded and the supply structure is changed. New competitors make it more difficult for established providers to restrict competition and tend to reduce inefficiencies.


  • In economic terms, competition ensures a performance-based distribution of income, consumer sovereignty, optimal factor allocation, flexibility of adaptation, technical progress and innovation, transparent prices and a distribution of risk
  • Socially limited and controlled competition, economic power and secures individual freedom of action
  • Competition can be differentiated according to prices, products and conditions
  • Competition requires a competitive spirit and market entry opportunities
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