The economics profession has offered a varied fare on its competition menu. Some have utilized an axiomatic approach to explaining perfect competition. Others have tendered the recipe as something workable though not perfect. Case studies have delved into the operations of particular markets. Hypotheses have been tested about the effect of market structure on performance. Market structure has received considerable attention – indeed, there has been so much food for thought that many of the audience have become satiated. Market performance has been studied but remains unconnected to underlying processes. The effect of innovation and technological change has provided the food for other courses.

There remains a serious gap in our empirical knowledge. There have been few attempts to measure the dynamics of competition – to study the internal dynamics of markets on a broad cross-sectional basis. We have only partial information on the importance of entry and exit, turnover due to mergers, and change in the incumbent-firm population and how it relates to performance. The topic has not been completely ignored by the profession. Partial insights have been offered by case studies that were limited in their generalizations and by simulations suffering from a lack of empirical evidence to sort out the important from the unimportant variants contained within them.

The gap in our understanding of the underlying dynamics of a broad range of industries is serious for a discipline that tries to combine analytical rigour with relevance.