Preparing for the European internal market and the dynamics of competition

It is often assumed that the completion of the internal market in Europe will increase the intensity of competition. This will without doubt be the case in several industries. There is, however, also reason to believe that the assumptions on which this expectation is based are somewhat biased. In this paper, one of the assumptions behind Europe 1992, as the completion of the internal market is usually referred to, is challenged. It is argued that the expected consequences of Europe 1992 are being built on a static perspective on competition. If a more dynamic view on competition is taken, the increase in competition appears to be not as severe as it is often assumed.