The Dynamic Competition Paradigm: Insights and Implications

David Teece identifies and expands on the weaknesses of static analysis, a method of measuring competition by evaluating firms that engage in cost-saving and cost-cutting in the pursuit of efficiency, as a means of measuring competition. He argues that as an alternative to static analysis, economists should use a forward-looking capabilities-based determination of competitive effects. The dynamic competition paradigm calls for a multidisciplinary approach that draws on complexity economics, technology management, organizational behavior, and information and computer science.

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