aggregate demand

Aggregate demandFrom Wikipedia, the free encyclopedia(Redirected from Aggregation of individual demand to total, or market, demand)Jump to: navigation, searchThis article does not cite any references or sources.Please help improve this article by adding citations to reliable sources. (help, get involved!)Any material not supported by sources may be challenged and removed at any time. This article has been tagged since December 2006.In economics, aggregate demand is the total demand for goods and services in the economy (Y) during a specific time period. An aggregate demand curve is the sum of individual demand curves for different sectors of the economy. The aggregate demand has five main parts[1]:
where
is consumption, is Investment, is Government spending, is Net export, is total exports, and is total imports. In fact, many people would ask about the relationship between output and the price level. Does changing prices affect the output? The answer is yes, but many economics books assume that the price level is constant, just to keep the relationships between the economic factors simple. It is often called effective demand. Put another way, it is the demand for the gross domestic product of a country when, and only when, it is in equilibrium (i.e. without changes in inventory). This demand consists of four major parts, which can be stated in either nominal or "real" terms:
personal consumption expenditures (C) or "consumption," demand by households and unattached individuals; its determination is described by the consumption function. The consumption function is C= a + (mpc)(Y-T) a is autonomous consumption, mpc is the marginal propensity to consume, (Y-T) is the disposable income.
gross private domestic investment (I), demand by business firms and some individuals, for new factories, machinery, computer software, housing, other structures, and inventories. In addition, Investment is effected by the output and the interest rate (i). Consequently, we can write it as I(Y,i). Investment has positive relationship with the output and negative relationship with the interest rate. For example, when Y goes up, the investment will increase. gross government investment and consumption expenditures (G). net exports (NX and sometimes (X-M)), i.e., net demand by the rest of the world for the country's output. In Keynesian economics, not all of gross private domestic investment counts as part of aggregate demand. Much or most of the investment in inventories can be due to a short-fall in demand (unplanned inventory accumulation or "general over-production"). The Keynesian model forecasts a decrease in national output and income when there is unplanned investment. (Inventory accumulation would correspond to an excess supply of products; in the National Income and Product Accounts, it is treated as a purchase by its producer.) Thus, only the planned or intended or desired part of investment (Ip) is counted as part of aggregate demand.
In sum, for a single country at a given time, aggregate demand (D or AD) = C + Ip + G + (X-M). Strictly speaking, it is questionable whether this aggregation is possible, as it is impossible to form such macrovariables from some microvariables: how do you add up litres of gasoline and toothbrushes? In the sense of nominal monetary values (prices) this is possible; but in the sense of real goods it is not. Therefore it might be argued that an "aggregate demand curve" does not even exist in an (income,spending)-space.
Contents [hide]1 Two Concepts of the "Aggregate Demand Curve" 1.1 Keynesian Cross 1.2 Marshallian Cross 1.3 Marxian critique 2 See also 3 External links
[edit] Two Concepts of the "Aggregate Demand Curve"Understanding of the aggregate demand curve depends on whether it is examined based on changes in demand as income changes, or as price change.
[edit] Keynesian CrossIn the "Keynesian cross diagram," a desired total spending (or aggregate expenditure, or "aggregate demand") curve is often drawn as a rising level of D as total national output and income rise. This increase is due to the positive relationship between C and consumers' disposable income in the consumption function. It may also rise due to increases in investment (due to the accelerator effect), while this rise is reduced if imports and tax revenues rise with income. Equilibrium in this diagram occurs where total spending (D) equals the total amount of national income (which corresponds to total national output or production). Here, a total demand equals total supply.
In the diagram, the equilibrium level of output, income, and demand is determined where this desired spending curve intersects the "Z curve," a line that represents the equality of total income and output. This is at point E, determining the equilibrium levels of output and income on the horizontal axis (where the arrow points).
The movement toward equilibrium is mostly via changes in inventories inducing changes in production and income. If current output exceeds the equilibrium, inventories accumulate, encouraging businesses to cut back on production, moving the economy toward equilibrium. Similarly, if the level of production is below the equilibrium, then inventories run down, encouraging an increase in production and thus a move toward equilibrium. This equilibration process occurs when the equilibrium is stable, i.e., when the D line is steeper than the Z line.
The equilibrium level of output determines the equilibrium level of employment in the model. (In a dynamic view, these are connected by Okun's Law.) There is no reason within the model why the equilibrium level of employment should correspond to full employment. Bringing in other considerations may imply this correspondence, though.
If any of the components of aggregate demand (C + Ip + G + NX) rises at each level of income, for example because business becomes more optimistic about future profitability, that shifts the entire D line upward. This raises equilibrium income and output. Similarly, if the elements of D fall, that shifts the line downward and lowers equilibrium output. (The Z line does not shift under the definition used here.)
[edit] Marshallian CrossSometimes, especially in textbooks, "aggregate demand" refers to an entire demand curve that looks like that in a typical Marshallian supply and demand diagram.
Thus, that we could refer to an "aggregate quantity demanded" (Yd = C + Ip + G + NX in real or inflation-corrected terms) at any given aggregate average price level (such as the GDP deflator), P.
In these diagrams, typically the Yd rises as the average price level (P) falls, as with the AD line in the diagram. The main theoretical reason for this is that if the nominal money supply (Ms) is constant, a falling P implies that the real money supply (Ms/P)rises, encouraging lower interest rates and higher spending. This is often called the "Keynes effect."
Carefully using ideas from the theory of supply and demand, aggregate supply can help determine the extent to which increases in aggregate demand lead to increases in real output or instead to increases in prices (inflation). In the diagram, an increase in any of the components of AD (at any given P) shifts the AD curve to the right. This increases both the level of real production (Y) and the average price level (P).
But different levels of economic activity imply different mixtures of output and price increases. As shown, with very low levels of real gross domestic product and thus large amounts of unemployed resources, most economists of the Keynesian school suggest that most of the change would be in the form of output and employment increases. As the economy gets close to potential output (Y*), we would see more and more price increases rather than output increases as AD increases.
Beyond Y*, this gets more intense, so that price increases dominate. Worse, output levels greater than Y* cannot be sustained for long. The AS is a short-term relationship here. If the economy persists in operating above potential, the AS curve will shift to the left, making the increases in real output transitory.
At low levels of Y, the world is more complicated. First, most modern industrial economies experience few if any falls in prices. So the AS curve is unlikely to shift down or to the right. Second, when they do suffer price cuts (as in Japan), it can lead to disastrous deflation.
[edit] Marxian critiqueIn Marxian economics, the equation of aggregate demand with expenditure on GDP is rejected as false, on conceptual and statistical grounds.
Firstly, GDP as a measure of value added excludes purchases of all intermediate goods used up in production.
Secondly, Gross Output from which GDP is derived by deducting intermediate expenditures, encompasses only those flows of income or expenditure regarded as related to production. Property income in the form of certain types of interest, transfers, land rents and realised capital gains from asset sales are excluded from gross output and GDP. Therefore, if the amount of property income (or transfers) increases, although GDP remains constant, national income receipts can nevertheless increase, and consequently aggregate demand can also increase.
Thirdly, Gross fixed capital formation measures only investment in productive fixed assets and does not constitute total investment, which includes also purchases of financial assets.
Fourthly, GDP in principle excludes sales of second-hand assets except for those modified by some prior productive activity (e.g. reconditioned cars).
Finally, expenditure on GDP obviously disregards the creation of credit money by banks and governments, which boosts aggregate demand.
Thus, it is argued, the catch-all Keynesian notion of aggregate demand:
obscures the distribution of income between social classes with different propensities to save, consume and invest, and fails to differentiate appropriately between different kinds of investment and consumption expenditure. The implication is that restraining consumption and a higher savings rate does not automatically imply more investment, and lower investment does not automatically mean higher consumption expenditure. Funds may (as Keynes himself acknowledges) be hoarded in some form, diverted to luxury consumption, used for speculation or spent on arms procurement for example..
Unlike the aggregate demand curve, the aggregate supply curve does not usually shift independently. This is because the equation for the aggregate supply curve contains no terms that are indirectly related to either the price level or output. Instead, the equation for aggregate supply contains only terms derived from the AS-AD model. For this reason, to understand how the aggregate supply curve shifts, we must work from the AS-AD model as a whole. Figure 3.1: Graph of the AS-AD model Figure 3.1 depicts the AS-AD model. The intersection of the short-run aggregate supply curve, the long-run aggregate supply curve, and the aggregate demand curve gives the equilibrium price level and the equilibrium level of output. This is the starting point for all problems dealing with the AS- AD model. Shifts in Aggregate Demand in the AS-AD Model The primary cause of shifts in the economy is aggregate demand. Recall that aggregate demand can be affected by consumers both domestic and foreign, the Fed, and the government. For a review of the shifters of aggregate demand, see the SparkNote on aggregate demand. In general, any expansionary policy shifts the aggregate demand curve to the right while any contractionary policy shifts the aggregate demand curve to the left. In the long run, though, since long-term aggregate supply is fixed by the factors of production, short-term aggregate supply shifts to the left so that the only effect of a change in aggregate demand is a change in the price level. Figure 3.2: Graph of an expansionary shift in the AS-AD model. Let's work through an example. For this example, refer to Figure 3.2. Notice that we begin at point A where short-run aggregate supply curve 1 meets the long-run aggregate supply curve and aggregate demand curve 1. The point where the short-run aggregate supply curve and the aggregate demand curve meet is always the short-run equilibrium. The point where the long-run aggregate supply curve and the aggregate demand curve meet is always the long-run equilibrium. Thus, we are in long-run equilibrium to begin. Now say that the Fed pursues expansionary monetary policy. In this case, the aggregate demand curve shifts to the right from aggregate demand curve 1 to aggregate demand curve 2. The intersection of short- run aggregate supply curve 1 and aggregate demand curve 2 has now shifted to the upper right from point A to point B. At point B, both output and the price level have increased. This is the new short-run equilibrium. But, as we move to the long run, the expected price level comes into line with the actual price level as firms, producers, and workers adjust their expectations. When this occurs, the short-run aggregate supply curve shifts along the aggregate demand curve until the long-run aggregate supply curve, the short-run aggregate supply curve, and the aggregate demand curve all intersect. This is represented by point C and is the new equilibrium where short-run aggregate supply curve 2 equals the long-run aggregate supply curve and aggregate demand curve 2. Thus, expansionary policy causes output and the price level to increase in the short run, but only the price level to increase in the long run. Figure 3.3: Graph of a contractionary shift in the AS- AD model The opposite case exists when the aggregate demand curve shifts left. For example, say the Fed pursues contractionary monetary policy. For this example, refer to Figure 3.3. Notice that we begin again at point A where short-run aggregate supply curve 1 meets the long-run aggregate supply curve and aggregate demand curve 1. We are in long-run equilibrium to begin. If the Fed pursues contractionary monetary policy, the aggregate demand curve shifts to the left from aggregate demand curve 1 to aggregate demand curve 2. The intersection of short-run aggregate supply curve 1 and the aggregate demand curve has now shifted to the lower left from point A to point B. At point B, both output and the price level have decreased. This is the new short-run equilibrium. But, as we move to the long run, the expected price level comes into line with the actual price level as firms, producers, and workers adjust their expectations. When this occurs, the short-run aggregate supply curve shifts down along the aggregate demand curve until the long-run aggregate supply curve, the short-run aggregate supply curve, and the aggregate demand curve all intersect. This is represented by point C and is the new equilibrium where short-run aggregate supply curve 2 meets the long-run aggregate supply curve and aggregate demand curve 2. Thus, contractionary policy causes output and the price level to decrease in the short run, but only the price level to decrease in the long run. This is the logic that is applied to all shifts in aggregate demand. The long-run equilibrium is always dictated by the intersection of the vertical long-run aggregate supply curve and the aggregate demand curve. The short-run equilibrium is always dictated by the intersection of the short-run aggregate supply curve and the aggregate demand curve. When the aggregate demand curve shifts, the economy always shifts from the long-run equilibrium to the short-run equilibrium and then back to a new long-run equilibrium. By keeping these rules and the examples above in mind it is possible to interpret the effects of any aggregate demand shift in both the short run and in the long run. Shifts in Aggregate Supply in the AS-AD Model Shifts in the short-run aggregate supply curve are much rarer than shifts in the aggregate demand curve. Usually, the short-run aggregate supply curve only shifts in response to the aggregate demand curve. But, when a supply shock occurs, the short-run aggregate supply curve shifts without prompting from the aggregate demand curve. Fortunately, the correction process is exactly the same for a shift in the short-run aggregate supply curve as it is for a shift in the aggregate demand curve. That is, when the short-run aggregate supply curve shifts, a short- run equilibrium exists where the short-run aggregate supply curve intersects the aggregate demand curve. Then the aggregate demand curve shifts along the short-run aggregate supply curve until the aggregate demand curve intersects both the short-run and the long-run aggregate supply curves. Once the economy reaches this new long-run equilibrium, the price level is changed but output is not. There are two types of supply shocks. Adverse supply shocks include things like increases in oil prices, a drought that destroys crops, and aggressive union actions. In general, adverse supply shocks cause the price level for a given amount of output to increase. This is represented by a shift of the short-run aggregate supply curve to the left. Positive supply shocks include things like decreases in oil prices or an unexpected great crop season. In general, positive supply shocks cause the price level for a given amount of output to decrease. This is represented by a shift of the short-run aggregate supply curve to the right. Figure 3.4: Graph of a positive supply shock in the AS- AD model Let's work through an example. For this example, refer to Figure 3.4. Notice that we begin at point A where short-run aggregate supply curve 1 meets the long-run aggregate supply curve and aggregate demand curve 1. Thus, we are in long-run equilibrium to begin. Now say that a positive supply shock occurs: a reduction in the price of oil. In this case, the short-run aggregate supply curve shifts to the right from short-run aggregate supply curve 1 to short-run aggregate supply curve 2. The intersection of short- run aggregate supply curve 2 and aggregate demand curve 1 has now shifted to the lower right from point A to point B. At point B, output has increased and the price level has decreased. This is the new short-run equilibrium. However, as we move to the long run, aggregate demand adjusts to the new price level and output level. When this occurs, the aggregate demand curve shifts along the short-run aggregate supply curve until the long-run aggregate supply curve, the short-run aggregate supply curve, and the aggregate demand curve all intersect. This is represented by point C and is the new equilibrium where short-run aggregate supply curve 2 equals the long-run aggregate supply curve and aggregate demand curve 2. Thus, a positive supply shock causes output to increase and the price level to decrease in the short run, but only the price level to decrease in the long run. Figure 3.5: Graph of an adverse supply shock in the AS- AD model Let's work through another example. For this example, refer to Figure 3.5. Notice that we begin at point A where short-run aggregate supply curve 1 meets the long run aggregate supply curve and aggregate demand curve 1. Thus, we are in long-run equilibrium to begin. Now say that an adverse supply shock occurs: a terrifying increase in the price of oil. In this case, the short-run aggregate supply curve shifts to the left from short-run aggregate supply curve 1 to short-run aggregate supply curve 2. The intersection of short-run aggregate supply curve 2 and aggregate demand curve 1 has now shifted to the upper left from point A to point B. At point B, output has decreased and the price level has increased. This condition is called stagflation. This is also the new short- run equilibrium. However, as we move to the long run, aggregate demand adjusts to the new price level and output level. When this occurs, the aggregate demand curve shifts along the short-run aggregate supply curve until the long-run aggregate supply curve, the short-run aggregate supply curve, and the aggregate demand curve all intersect. This is represented by point C and is the new equilibrium where short-run aggregate supply curve 2 equals the long-run aggregate supply curve and aggregate demand curve 2. Thus, an adverse supply shock causes output to decrease and the price level to increase in the short run, but only the price level to increase in the long run. This is the logic that is applied to all shifts in short-run aggregate supply. The long-run equilibrium is always dictated by the intersection of the vertical long run aggregate supply curve and the aggregate demand curve. The short-run equilibrium is always dictated by the intersection of the short-run aggregate supply curve and the aggregate demand curve. When the short-run aggregate supply curve shifts, the economy always shifts from the long-run equilibrium to the short-run equilibrium and then back to a new long-run equilibrium. By keeping these rules and the examples above in mind, it is possible to interpret the effects of any short-run aggregate supply shift, or supply shock, in both the short run and in the long run. Conclusions from the AS-AD Model This section has served a number of purposes. First, we covered how and why the short-run aggregate supply curve shifts. Second, we reviewed how and why the aggregate demand curve shifts. Third, we introduced the mechanism that moves the economy from the long run to the short run and back to the long run when there is a change in either aggregate supply or aggregate demand. At this stage, you have the ability to use the highly realistic model of the macroeconomy provided by the AS-AD diagram to analyze the effects of macroeconomic policies. This will prove to be the most powerful tool in your collection for understanding the macroeconomy. Use it wisely!
CompetitionFrom Wikipedia, the free encyclopediaJump to: navigation, searchCompetition is the act of striving against others for the purpose of achieving dominance. It is a term that is commonly used in numerous fields, including business, ecology, economics, music, politics, and sports. Competition may be between two or more forces, systems, individuals, or groups, depending on the context in which the term is used.
Competition may yield various results, including both intrinsic and extrinsic rewards. Some results, such as resources or territory, may be biologically motivated because they provide survival advantages. Others, such as competition in business and politics, are learned aspects of human culture. Additionally, extrinsic symbols such as trophies, plaques, ribbons, prizes, or laudations may be given to the winner. Such symbolic rewards are commonly used in human sporting and academic competitions.
The Latin root for the verb "to compete" is "competere" which means "to seek together" or "to strive together." [1]
However, even the general definition stated above is not universally accepted. Social theorists, most notably Alfie Kohn (No Contest: The Case Against Competition [1986]), and cooperativists in general argue that the traditional definition of competition is too broad and too vague. Competition that originates internally and is biologically motivated can and should be defined as either amoral competition or simply survival instinct, behavior that is neither good nor bad but exists to further the survival of an individual or species (e.g., hunting), or behavior that is coerced (e.g., self-defense).
They offer a definition of competition that distinguishes between amoral and moral behavior: Competition is a mutually voluntary activity in which success is based upon the forced failure of someone else.

Contents [hide]1 Sizes and levels of competition 2 Consequences of competition 3 Competition in different fields 3.1 Economics and business competition 3.2 Competition in politics 3.3 Sports competition 3.4 Competition in education 3.5 Competition in biology and ecology 4 The study of competition 4.1 Competitiveness 4.2 Hypercompetitiveness 5 See also 6 External links 7 References
[edit] Sizes and levels of competitionCompetition may also exist at different sizes; some competitions may be between two members of a species, while other competitions can involve entire species. In an example in economics, a competition between two small stores would be considered small compared to competition between several mega-giants. As a result, the consequences of the competition would also vary- the larger the competition, the larger the effect.
In addition, the level of competition can also vary. At some levels, competition can be informal and be more for pride or fun. However, other competitions can be extreme and bitter; for example, some human wars have erupted because of the intense competition between two nations or nationalities.
[edit] Consequences of competitionCompetition can have both beneficial and detrimental effects. Many evolutionary biologists view inter-species and intra-species competition as the driving force of adaptation and ultimately, evolution. However, some biologists, most famously Richard Dawkins, prefer to think of evolution in terms of competition between single genes, which have the welfare of the organism 'in mind' only insofar as that welfare furthers their own selfish drives for replication. Some social Darwinists claim (controversially) that competition also serves as a mechanism for determining the best-suited group, politically, economically, and ecologically.
On the negative side, competition can cause injury to the organisms involved, and drain valuable resources and energy. Human competition can be expensive, as is the case with political elections, international sports competitions, and advertising wars. It can lead to the compromising of ethical standards in order to gain an advantage; for example, several athletes have been caught using banned steroids in professional sports in order to boost their own chances of success or victory. And it can be harmful for the participants, such as athletes who injure themselves exceeding the physical tolerances of their bodies, or companies that pursue unprofitable paths while engaging in competitive rivalries.
[edit] Competition in different fields
[edit] Economics and business competitionMerriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms." [2] Seen as the pillar of capitalism in that it may stimulate innovation, encourage efficiency, or drive down prices, competition is touted as 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 commercial firms to develop new products, services, 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 also lead to wasted (duplicated) effort and to increased costs (and prices) in some circumstances. For example, the intense competition for the small number of top jobs in music and movie acting leads many aspiring musicians and actors to make substantial investments in training that are not recouped, because only a fraction become successful. Similarly, the psychological effects of competition may result in harm to those involved.
Three levels of economic competition have been classified. The most narrow form is direct competition (also called category competition or brand competition), where products that perform the same function compete against each other. For example, a brand of pick-up trucks competes with several different brands of pick-up trucks. Sometimes two companies are rivals and one adds new products to their line so that each company distributes the same thing and they compete. The next form is substitute competition, where products that are close substitutes for one another compete. For example, butter competes with margarine, mayonnaise, and other 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 available may choose to spend it on many different items, which can all be seen as competing with each other for the family's available money.
Competition does not necessarily have to be between companies. For example, business writers sometimes refer to "internal competition". This is competition within companies. The idea was first introduced by Alfred Sloan at General Motors in the 1920s. Sloan 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 would compete with the Pontiac division for some market segments. Also, in 1931, Procter & Gamble initiated a deliberate system of internal brand versus brand rivalry. The company was organized around different 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. This form of competition thus pitted a brand against another brand. Finally, most businesses also encourage competition between individual employees. An example of this is a contest between sales representatives. The sales representative with the highest sales (or the best improvement in sales) over a period of time would gain benefits from the employer.
It should also be noted that business and economical competition in most countries is often limited or restricted. Competition often is subject to legal restrictions. For example, competition may be legally prohibited as in the case with a government monopoly or a government-granted monopoly. Tariffs, subsidies or other protectionist measures may also be instituted by government in order to prevent or reduce competition. Depending on the respective economic policy, the pure competition is to a greater or lesser extent regulated by competition policy and competition law. Competition between countries is quite subtle to detect, but is quite evident in the World economy, where countries like the US, Japan, the European Union and the East Asian Tigers each try to outdo the other in the quest for economic supremacy in the global market, harkening to the concept of Kiasuism.Such competition is evident by the policies undertaken by these countries to educate the future workforce. For example, East Asian economies like Singapore, Japan and South Korea tend to emphasize education by allocating a large portion of the budget to this sector, and by implementing programmes such as gifted education, which some detractors criticise as indicative of academic elitism.
See separate sub-markets principle.
[edit] Competition in politicsCompetition is also found in politics. In democracies, an election is a competition for an elected office. In other words, two or more candidates strive and compete against one another to attain a position of power. The winner gains the seat of the elected office for a set amount of time, when another election is usually held to determine the next holder of the office.
In addition, there is inevitable competition inside a government. Because several offices are appointed, potential candidates compete against the others in order to gain the particular office. Departments may also compete for a limited amount of resources, such as for funding. Finally, where there are party systems, elected leaders of different parties will ultimately compete against the other party for laws, funding, and power.
Finally, competition is also imminent between governments. Each country or nationality struggles for world dominance, power, or military strength. For example, the United States competed against the Soviet Union in the Cold War for world power, and the two also struggled over the different types of government (in this case, representative democracy and communism). The result of this type of competition often leads to worldwide tensions and may sometimes erupt into warfare.
[edit] Sports competitionWhile some sports, such as fishing, have been viewed as primarily recreational, most sports are considered competitive. The majority involve competition between two or more persons, (or animals and/or mechanical devices typically controlled by humans as in horse racing or auto racing). For example, in a game of basketball, two teams compete against one another to determine who can score the most points. While there is no set reward for the winning team, many players gain an internal sense of pride. In addition, extrinsic rewards may also be given. Athletes, besides competing against other humans, also compete against nature in sports such as whitewater kayaking or mountain climbing, where the goal is to reach a destination, with only natural barriers impeding the process. A regularly scheduled (such as annual) competition meant to determine the "best" competitor of that cycle is called a championship.
While professional sports have been usually viewed as intense and extremely competitive, recreational sports, which are often less intense, are considered a healthy option for the competitive urges in humans. Sport provides a relatively safe venue for converting unbridled competition into harmless competition, because sports competition is restrained. Competitive sports are governed by codified rules agreed upon by the participants. Violating these rules is considered to be unfair competition. Thus sports provide artificial not natural competition; for example, competing for control of a ball or defending territory on a playing field is not an innate biological factor in humans. Athletes in sports like gymnastics and competitive diving "compete" against a conceptual ideal of a perfect performance, which incorporates measurable criteria and standards that are translated into numerical ratings and scores.
Sports competition is generally broken down into three categories: individual sports, such as archery, dual sports, such as doubles tennis, or team sports competition, such as football. While most sports competitions are recreation, there exists several major and minor professional sports leagues throughout the world. The Olympic Games, held every four years, is regarded as the international pinnacle of sports competition.
[edit] Competition in educationCompetition is a factor in education. On a global scale, national education systems, intending to bring out the best in the next generation, encourage competitiveness among students by scholarships. Countries like Singapore and England have a special education program which caters to special students, prompting charges of academic elitism. Upon receipt of their academic results, students tend to compare their grades to see who is better. For severe cases, the pressure to perform in some countries is so high that it results in stigmatization of intellectually deficient students or even suicide as consequence of failing the exams, Japan being a prime example (see Education in Japan). This has resulted in critical revaluation of examinations as a whole by educationists[citation needed]. Critics of competition as opposed to excellence as a motivating factor in education systems, such as Alfie Kohn, assert that competition actually has a net negative influence on the achievement levels of students and that it "turns all of us into losers." (Kohn 1986)
Competitions also make up a large proponent of extracurricular activities that students partake in. Such competitions include TVO's broadcast Reach for the Top competition, FIRST Robotics, Duke Annual Robo-Climb Competition (DARC) and the University of Toronto Space Design Contest.
[edit] Competition in biology and ecologyMain article Competition (biology). Competition within and between species is an important topic in biology, specifically in the field of ecology. Competition between members of a species ("intraspecific") is the driving force behind evolution and natural selection; the competition for resources such as food, water, territory, and sunlight results in the ultimate survival and dominance of the variation of the species best suited for survival. Competition is also present between species ("interspecific"). A limited amount of resources are available and several species may depend on these resources. Thus, each of the species competes with the others to gain the resources. As a result, several species less suited to compete for the resources may either adapt or die out. According to evolutionary theory, this competition within and between species for resources plays a critical role in natural selection.
[edit] The study of competitionCompetition has been studied in several fields, including psychology, sociology, and anthropology. Social psychologists, for instance, study the nature of competition. They investigate the natural urge of competition and its circumstances. They also study group dynamics to detect how competition emerges and what its effects are. Sociologists, meanwhile, study the effects of competition on society as a whole. In addition, anthropologists study the history and prehistory of competition in various cultures. They also investigate how competition manifested itself in various cultural settings in the past, and how competition has developed over time.
[edit] CompetitivenessMain article: CompetitivenessMany philosophers and psychologists have identified a trait in most living organisms that drive the particular organism to compete. This trait, called competitiveness, is viewed as an innate biological trait that coexists along with the urge for survival. Competitiveness, or the inclination to compete, though, has become synonymous with aggressiveness and ambitiousness in the English language. More advanced civilizations integrate aggressiveness and competitiveness into their interactions in order to adapt and ethically share resources. Most plants compete for higher spots on trees to receive more sunlight.
The term also applies to econometrics. Here it is a comparative measure of the ability and performance of a firm or sub-sector to sell and produce/supply goods and/or services in a given market. The two academic bodies of thought on the assessment of competitiveness are the Structure Conduct Performance Paradigm and the more contemporary New Empirical Industrial Organisation model. Predicting changes in the competitiveness of business sectors is becoming an integral and explicit step in public policy making. Within capitalist economic systems, the drive of enterprises is to maintain and improve their own competitiveness.
[edit] HypercompetitivenessThe tendency toward extreme, unhealthy competition has been termed hypercompetitive. This concept originated in Karen Horney's theories on neurosis, specifically the highly aggressive personality type that is characterized as "moving against people." In her view, some people have a need to compete and win at any cost as a means of maintaining their self-worth. These individuals are likely to turn any activity into a competition, and they will feel threatened if they find themselves losing. Researchers have found that men and women who score high on the trait of hypercompetitiveness are more narcissistic and less psychologically healthy than those who score low on the trait (Ryckman et al. 1994). Hypercompetitive individuals generally believe that "winning isn't everything; it's the only thing."