Structural conditions for static and dynamic competition after deregulation

During the 1980’s and 1990’s deregulation had become the “recipe” for many countries’ economies to obtain increased efficiency and lower prices. Yet many empirical and theoretical studies of deregulation show that expectations rarely became fulfilled. The purpose of this paper is to develop the model of competition by introducing static and dynamic competition, which has different consequences for market performance. We claim that the development of static and/or dynamic competition post deregulation can be explained by structural conditions, both regarding entry barriers and customer influence. Four different competitive conducts are identified based on an explorative study of four deregulated industries: static, dynamic, hyper, and unheated competition.