Excessive Competition: Economic Analysis and Governance

Author: Luo Yunhui
Publisher:
Publish Date: 2004-10-01
Features: The purpose of this book is to scientifically define "excessive competition" and prove its theoretical existence under market economy conditions. Based on this, it explains the reasons for excessive competition in China's economy in recent years and derives policy recommendations for addressing it. The book is divided into five chapters. Chapter 1 distinguishes "excessive competition" from the "depression" or "recession" of the economic cycle. It analyzes and evaluates existing concepts of "excessive competition" and proposes a redefinition: excessive competition refers to the behavior of market participants, under certain competition criteria—game rules and other constraints—to maximize their specific utility functions through competition, while engaging in competitive behavior that contradicts the fundamental interests of the nominal entities they represent. The research approach of the book strictly follows the basic methods of neoclassical economics, focusing on the constraints of specific problems. At a lower level of methodology, it employs new industrial organization theory based on game theory, property rights economics, emerging classical economics, and other fields to explore the location of the specific equilibrium mechanism of excessive competition and its governance pathways. Chapter 2 argues for the possibility and specific conditions of excessive competition under market economy conditions. Chapter 3 explains the reasons for excessive competition in China's economy, with the interaction mechanism between the basic property rights system and excessive competition as the central focus of analysis. In this chapter, it first derives the meaning of common property from queuing and analyzes the relationship between the public and the common, linking China's excessive competition to Hardin's "tragedy of the commons," making it the fundamental basis for explaining China's excessive competition. On this basis, it adopts the form of an existing model but gives it different connotations, analyzing how the merger barriers of state-owned enterprises catalyze excessive competition. Following the explanation of specialization economies and transaction costs. The empirical part of Chapter 4 selects a representative case study. Chapter 5, when proposing policy recommendations, avoids unrealistic and groundless wandering based on some ideal state, but instead applies the assumption of "rational actors" to every behavioral subject, including policymakers, through the lens of general equilibrium. In conclusion, the basic conclusion of this book is that excessive competition still has the possibility of existing under a free-market economy, and the recent excessive competition issues in China's economy mainly stem from the property rights system as the competition rules of China's economy. Similarly, addressing this phenomenon also requires starting from these specific constraints.