Is Competition Always Good?

December 3, 2016 by Matt Martindale

175-20-21F irst, let me say that I’m an economics nerd. I have a degree in Business (Marketing), with a minor in Economics (basically, a fancy word for the “scientific study of decision making”). My wife, Tami, has her degree in Consumer Science (basically, buyer behavior). I L-O-V-E economics! I am continually reading and studying lots of different topics in economic theory.

That being said, one particular topic has been of interest lately, especially with many venues “forcing” brides to use their in house DJ, or limiting her choice to one of three mediocre approved DJ companies. I’ve been immersed in a three-month study on the economic theory of competition, and it’s been awesome.I’ve read numerous articles, journals, legal opinions, court cases, books, etc., and also conducted interviews over the past three months, exploring the pros and cons of open competition. After studying both sides thoroughly, I genuinely feel that com- petition is good in every industry. YES—even the DJ industry.

I’ve read numerous articles, journals, legal opinions, court cases, books, etc., and also conducted interviews over the past three months, exploring the pros and cons of open competition. After studying both sides thoroughly, I genuinely feel that com- petition is good in every industry. YES—even the DJ industry.Think about a very competitive industry, say, cell phones. Cell phone companies have responded differently to the market: Samsung, Blackberry, Android, Apple, etc. There are various makes and models of phones, and different carriers like Sprint, AT&T, Verizon, T-Mobile, Cricket (are they even still around?), etc. Each has differences in quality, phone size, specific functions and features, coverage service areas, data plans, etc. and are all priced differently, with different billing and payment options too. Why? Simple. Consumers have different needs, different wants, and different desires. We all carefully weigh our own basket of considerations that are important to us when making a purchase decision, even for something as simple as a cell phone. These distinctions are what lead to an actual NEED for choice, and the market responds with product differences, prices, etc.—with each company then striving to meet a targeted niche. All of us as consumers benefit from competition in cell phones. It is the same with automobiles, TVs, appliances, computers, hotels and airlines too.

Think about a very competitive industry, say, cell phones. Cell phone companies have responded differently to the market: Samsung, Blackberry, Android, Apple, etc. There are various makes and models of phones, and different carriers like Sprint, AT&T, Verizon, T-Mobile, Cricket (are they even still around?), etc. Each has differences in quality, phone size, specific functions and features, coverage service areas, data plans, etc. and are all priced differently, with different billing and payment options too. Why? Simple. Consumers have different needs, different wants, and different desires. We all carefully weigh our own basket of considerations that are important to us when making a purchase decision, even for something as simple as a cell phone. These distinctions are what lead to an actual NEED for choice, and the market responds with product differences, prices, etc.—with each company then striving to meet a targeted niche. All of us as consumers benefit from competition in cell phones. It is the same with automobiles, TVs, appliances, computers, hotels and airlines too.

Matt Martindale Matt Martindale (8 Posts)


Filed Under: 2016