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Competition Policy and the Economic Approach

Competition Policy and the Economic Approach

Foundations and Limitations

Edited by Josef Drexl, Wolfgang Kerber and Rupprecht Podszun

This outstanding collection of original essays brings together some of the leading experts in competition economics, policy and law. They examine what lies at the core of the ‘economic approach to competition law’ and deal with its normative and institutional limitations. In recent years the ‘more economic approach’ has led to a modernisation of competition law throughout the world. This book comprehensively examines for the first time, the foundations and limitations of the approach and will be of great interest to scholars of competition policy no matter what discipline.

Chapter 8: Industrial Dynamics and Evolution – The Role of Innovation, Competences and Learning

Uwe Cantner

Subjects: economics and finance, competition policy, law - academic, competition and antitrust law


Uwe Cantner INTRODUCTION 1. Industries and sectors are dynamic in the sense that their structures change over time, sometimes more slowly and goal-oriented, sometimes fast and quite erratic. Among the more prominent forces considered responsible are the introduction of innovations by incumbents, the innovation based market entry of new or branching firms, and the exit of not-necessarilyfailing firms. Since the late 1970s, industrial dynamics has emerged as a major area of inquiry in industrial economics, recognizing the central role of innovation for firms and industries. Here I address theoretical and empirical considerations from an evolutionary economics point of view, which are relevant for an understanding of this innovation driven dynamics leading to certain patterns of structural change within and between industries and markets. The notion of evolutionary economics is taken here in a rather broad sense, neglecting mostly the more intricate discussions especially about what ‘evolutionary’ means. In the following, this concept implies first of all ‘dynamics’ which means that the phenomena under consideration can be understood well only if a dynamic perspective is taken. Hence, it is not the sheer existence of these phenomena but their emergence and development which allow us to grasp their significance. Second, the notion of ‘evolutionary’ in general implies that the outcomes of evolutionary processes are usually not based on a perfect ex ante plan, but are the result of a trial-and-error process combined with an ex ante evaluation. On the basis of these two minimum requirements for an evolutionary perspective, this chapter concentrates...

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