The value of the improvement of a trait for a breeding organization is determined by its impact on the saleability of its breeding stock. This impact is influenced by the competitive position of the breeding organization, i.e. by the performance of its breeding stock relative to other breeding organizations. A method was developed to take effects of competitive position on the breeding goal into account in designing selection indexes. The main conclusions were as follows.
(1) When the performance level of a trait is equal to the average performance level of other breeding organizations, its economic weight (i.e. its weighing factor in the breeding goal) is equal to its importance on a commercial level. With lower performance, the economic weight increases. With higher performance, it decreases.
(2) The effect of competitive position on the economic weight of a trait depends on the degree of compensation between traits. When a weakness (negative monetary deviation compared with competitors) n i one trait can be totally compensated by the strength (positive monetary deviation of the same order) i n another trait, then competitive position has no influence on the economic weight.