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Niche Overlap and Limiting Similarity: An Ecological Approach to the Theory of the Firm

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  • Gallagher, Matthew

Abstract

This paper suggests an approach, based upon an analogy with different species competing in the environment for fixed resources, to the question of why variety is such a persistent feature of free market economies. Attention is centered upon a market characterised by a group of consumers with a distribution of incomes, which leads to a continuum of demands for different output qualities. The identification of various sufficient conditions then allows the argument to proceed through a mathematical structure first outlined in the theoretical ecology literature, resulting in a precise prediction regarding the limit to similarity between firms. This results is then applied to the U.K. supermarket industry in 1988 and is used to provide guidance to the state of competition within the industry in that year.

Suggested Citation

  • Gallagher, Matthew, 1993. "Niche Overlap and Limiting Similarity: An Ecological Approach to the Theory of the Firm," Journal of Evolutionary Economics, Springer, vol. 3(1), pages 63-77, February.
    • Handle: RePEc:spr:joevec:v:3:y:1993:i:1:p:63-77
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    Cited by:

    1. ., 2013. "Market niches, competition and economic performance: more clues from ecology?," Chapters, in: Competition, Diversity and Economic Performance, chapter 8, pages 160-182, Edward Elgar Publishing.
    2. Tisdell, Clem & Seidl, Irmi, 2004. "Niches and economic competition: implications for economic efficiency, growth and diversity," Structural Change and Economic Dynamics, Elsevier, vol. 15(2), pages 119-135, June.

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