APPROACHES TO THEORETICAL ISSUES OF COMPETITION AND COMPETITIVENESS ANALYSIS

Market plays a key role in the allocation of resources and the distribution of impacts within the processes of interaction of individual economic entities. The market is the meeting place of supply and demand. The supply side consists of sovereign producers whose product, as a result of the selected combinations of the factors of production, tries to win the interest of demand under the conditions of competition with other competing producers. The demand side is represented by consumers with differing behaviour. There is a relatively large number of decision alternatives and product selections. Consumers can behave rationally as well as irrationally. These facts influence the market and the competition. The competition benefits consumers in case they behave rationally and have information, which enables them to choose from the offered products. These issues include traditional as well as new approaches, that will be outlined in this paper. These are mainly related to behavioural economics, which, in the analysis of economic processes and their behaviour, is based on psychological knowledge. This is also important in the field of competition as it defines how behavioural economics and deviations from rational behaviour influence the behaviour of consumers.