The Limiting Competition Concept Essay

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The concept of limiting competition is a practice used to balance market opportunities for different participants to maintain a balance in commodity-money relationships. Chambers and O’Reilly (2021) define this approach as negative, explaining their position by evaluating unnecessary government interventions “and increasing economic rents” (p. 5). When considering this concept within the interest group model of regulation, one should pay attention to the effectiveness of appropriate disincentives, such as restrictions on market entry, prices, or output, which affect stakeholders differently. These restraining methods are only relevant in the case of a real imbalance, but in traditional market relationships, a particular interest group always benefits more from such practices than others.

Regulating the interests of different stakeholders is possible in case of benefits for each of the interested parties. For instance, Fleming (2019) notes that any deterrents are justified when customer welfare is the key objective of restrictive measures. However, when taking into account the distinctive interests and capabilities of market participants, the restriction on potential development is fraught with the inevitable loss of leadership positions in front of competitors. The interest group model of regulation is based on the opportunity for different actors to organize and influence decisions taken at the political level (Fleming, 2019). Therefore, by analyzing the concept of limiting competition within this model, one can assume that vulnerable participants remain unavoidably, despite the efforts of the majority. The interests of consumers, in this case, do not play an essential role since the initiators of the targeted policymaking activities set the task of satisfying their business interests. Thus, the interest group model of regulation cannot ensure equality in development opportunities in an environment where the concept of limiting competition is promoted.

References

Chambers, D., & O’Reilly, C. (2021). The economic theory of regulation and inequality. Public Choice, 1-16.

Fleming, A. (2019). Anti-competition regulation. Business History Review, 93(4), 701-724.

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