contestable market

A perfectly contestable market is not possible in real life.

These tactics can be seen in a contestable market.

A perfectly contestable market has three main features.

The more contestable a market the closer it will be to a perfectly contestable market.

Profit can, however, occur in competitive and contestable markets in the short run, as firms jostle for market position.

The project aimed to analyse and measure the impact of contestable markets on performance in the delivery of UK public services.

Contestable Markets and the Theory of Industry Structure.

Finally, there are expressions of scope, form or time, as in "the Russian contribution to international economy since the revolution" or "principles of contestable markets".

Contestable markets - ein Leitbild für die Wettbewerbspolitik?

The constraint of potential entry on the behaviour of dominant firms lies at the heart of the concept of contestable markets (see Baumol, 1982).

Such an outcome is possible if there exist contestable markets, so that firms can easily enter an industry when profits rise, and exit when they fall (see McDonald 1987).

Baumol's theory of contestable markets states that consumer welfare can be maximised regardless of the number of firms in an industry, as long as it is greater than one.

These games are based on mathematical modeling of contestable markets, including chaos theory, random variable generation (Monte Carlo simulations), and econometric modeling of demand and supply conditions.

The theory of contestable markets argues that in some circumstances (private) monopolies are forced to behave as if there were competition because of the risk of losing their monopoly to new entrants.

Low-cost airlines remain a commonly-referenced example of a contestable market; entrants have the possibility of leasing aircraft and should be able to respond to high profits by quickly entering and exiting.

It is suggested that these observations can be reconciled by appeal to contestable markets theory - where potential competition restrains the profitability of intermediaries, together with shifts in bargaining power towards end users of funds.

Among his better-known contributions are the theory of contestable markets, the Baumol-Tobin model of transactions demand for money, Baumol's cost disease, which discusses the rising costs associated with service industries, and Pigou taxes.

Its fundamental features are low barriers to entry and exit; in theory, a perfectly contestable market would have no barriers to entry or exit ("frictionless reversible entry" in economist William Brock's terms).

The theory of contestable markets has been used to argue for weaker application of antitrust laws, as simply observing a monopoly market may not prove that a firm is exploiting its market power to control the price level.

On the face of it, the market appears to have many of the features of a contestable market, that is, one where competitive conditions are maintained regardless of the market structure, due to the threat of new entry.

It is thus clear that contestable market features help to explain some of the behaviour of firms in the eurobond market, i.e. that it is highly competitive, especially within the individual currency sectors, despite the market structure.

Integral Energy is involved in electricity retail in addition to owning an electricity distribution network and currently holds licences to retail electricity in the contestable markets covered by the NEM (National Electricity Market).

In the case of contestable markets, the cycle is often ended with the departure of the former "hit and run" entrants to the market, returning the industry to its previous state, just with a lower price and no economic profit for the incumbent firms.

In a contestable market, existing firms are vulnerable to entry if they attempt to exploit their market power, there are no sunk costs, and hence exit is costless; and entrants have access to the same technology and factor prices as incumbents.

An IP system responsive to change: The IPO should be given the necessary powers and mandate in law to ensure that it focuses on its central task of ensuring that the UK's IP system promotes innovation and growth through efficient, contestable markets.