The Online Encyclopedia and Dictionary







Competition characterises a biochemical, ecologic, economic, political, or sporting activity whereby two or more individuals or groups strive antagonistically against one another for some reward. The reward could consist of:

  • fame, esteem, reputation, or recognition
  • money, objects of value, or resources
  • territory, food, or nesting sites
  • market share, or business dominance
  • power and influence
  • belonging and membership
  • mates and reproductive success
  • quality, improvement, and achievement
  • spiritual enlightenment or salvation
  • self-actualization

When rewards are intangible, a trophy is often given to symbolize the achievement and make the rewards tangible.

Competition exists at the particular level as well as the systemic level. At the particular level, individuals or groups compete against each other either informally or in formal contests. At the systemic level whole societies are organized in such a way as to promote competition, usually by offering incentives.

Competition is able to push us to great heights. It prods us to achieve more than what we could otherwise. However, it is not the only stimulus for achievement. People could also be encouraged to succeed through a desire to cooperate, love for what they are doing, and possibly even coercion.

Competition can also have negative consequences. Potential detrimental effects include:

  • We are blinded to other strategies - A species can pursue a competitive strategy in a situation where a cooperative strategy might be more beneficial. For instance, in Prisoner's_Dilemma
  • It can promote excessive concentration on achievement - For example athletes push themselves to the point that they do harm to their bodies. Another example is of people who spend so much time at work that they do themselves and their families damage.
  • There are financial costs - All competition involves the expenditure of energy and resources. Elections for example, are very costly competitions. In the business world, the Coke/Pepsi wars of the 1980s and 90s is an example of a multi-million dollar contests that provided neither contestant a significant advantage. Sporting games can also be very expensive to stage.
  • It can result in a loss of moral direction - In sports, use of steroids is an example of competition eroding the contestants' moral compass. An example is Enron, a corporate environment so competitive that its cutthroat atmosphere was a leading factor in its demise.

In economics and business

Seen as a pillar of capitalism in that it may stimulate innovation, encourage efficiency or drive down prices, it is the foundation upon which capitalism is justified. According to microeconomic theory, no system of resource allocation is more efficient than pure competition. Competition, according to the theory causes firms to develop new products and technologies. This gives consumers greater selection and better products. The greater selection typically causes lower prices for the products compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).

However, competition may equally lead to wasted (duplicated) effort and to increased costs (and prices) in some circumstances. Similarly, the psychological effects of competition may result in harm as well as good.

Marketers have identified three levels of competition. The most narrow form is direct competition (also called category competition or brand competition). This is where products that perform the same function compete against each other. For example, a Ford pick-up truck competes with a Toyota pick-up truck which competes with a Volvo pick-up truck. The next form is substitute competition. Products that are close substitutes for one another compete. For example, butters compete with margarines, which compete with mayonnaises, which compete with various sauces and spreads. The broadest form of competition is typically called budget competition. Included in this category is anything that the consumer might want to spend their available money on. For example, a family that has $20,000 may choose to spend it on a new car, a boat, an addition to their house, or on their child's education. These purchases can be seen as competing with each other for the family's available money.

Competition need not be between companies. Business writers sometimes refer to "internal competition". This is competition within companies. First introduced by Alfred Sloan at General Motors in the 1920s, he deliberately created areas of overlap between divisions of the company so that each division would be competing with the other divisions. For example, the Chevy division may compete with the Pontiac division for some market segments. In 1931 Proctor and Gamble initiated a deliberate system of internal brand vs brand rivalry. The company was organized around brands, with each brand allocated resources, including a dedicated group of employees willing to champion the brand. Each brand manager was given responsibility for the success or failure of the brand and was compensated accordingly. Most businesses also encourage competition between individual employees. An example of this is a contest between sales representatives. The sales rep with the highest sales (or the best improvement in sales) over the period of the contest, would win a paid vacation, or some other prize.

Competition law

Competition often is subject to legal restrictions. Depending on the respective economic policy the pure competition is to a greater or lesser extent regulated by competition policy and competition law.

In biology and ecology

Organisms compete for scarce resources such as food, water, mates, and territory. An acorn that falls to the forest floor, for example, must compete with other plants for nutrient-rich soil, water, and adequate sunlight.

In politics

Democracy is essentially the institutionalization of competition. An election is a competition. The winner of the competition attains power for a short time, that is, until the next competition.

In sports

Some "sporting activities", such as fishing for example, can be viewed as primarily recreational rather than sporting, however true sports are competitive. The most proficient athletes like to compare their skills with others in competition. The ultimate sporting competition is the Olympics.

In psychology, sociology, and anthropology

Social psychologists study the nature of competition. They want to know why we compete and under what circumstances. They study group dynamics to detect how competition emerges and what its effects are.

Sociologists study what effect competition has on society as a whole. When is it beneficial, and when harmful.

Anthropologists study the history and prehistory of competition in various cultures. They ask, How did it manifest itself in different cultural settings in the past.

Considerations in philosophy

Most philosophers have paid attention to competition only indirectly, for example, by acknowledging its existence in society or by identifying its advantages and disadvantages in political or economic arrangements, without analyzing the essential nature of competition, as well as its ethical ramfications. The philosopher Michael E. Berumen devoted considerable attention to the subject in his book, Do No Evil: Ethics with Applications to Economic Theory and Business. Whereas some thinkers have viewed competition as being inherently at odds with cooperation or in a largely negative light, Berumen maintains that the two are often entertwined; for example, any number of competitive activities might require cooperation in following the rules, accepting judgments of impartial observers, and settling on rewards. Competition, Berumen asserts, is also one means of allocating finite resources, whether in economics or in getting tickets to the theater. The key to analzying the morality of competition is to understand who benefits and suffers as a result and whether the suffering can be justified using various normative criteria, for example, a voluntary agreement, universal prescriptions, or societal norms.


See also

Last updated: 05-07-2005 14:11:58
Last updated: 05-13-2005 07:56:04