Perfectly and Imperfectly Competitive Markets

Abstract

In the competition between economic models, the theory of perfect competition holds a dominant market share: no set of ideas is so widely and successfully used by economists as is the logic of perfectly competitive markets. Correspondingly, all other market models (collectively labelled ‘imperfectly competitive’ and including monopoly, monopolistic competition, dominant-firm price leadership, bilateral monopoly and other situations of bargaining, and all the varieties of oligopoly theory) are little more than fringe competitors.