Does entry improve welfare? A general equilibrium approach to competition policy
AbstractWe consider a general equilibrium model under imperfect competition. Firms have constantreturns, they are price taker in the input market and compete Ã la Cournot in theproduct market. We assume a representative consumer exists. We show that an increase inthe number of firms of a given market does not always improve welfare, challenging thecommon idea according to which mergers with no cost synergy are not desirable for theconsumer.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economics.
Volume (Year): 98 (2009)
Issue (Month): 2 (November)
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Web page: http://www.springerlink.com/link.asp?id=108909
Cournot competition; Competition policy; General equilibrium and imperfect competition; Efficiency; D50; L13; L40;
Other versions of this item:
- Bertrand Crettez & Marie-Cécile Fagart, 2008. "Does entry improve welfare? A general equilibrium approach to competition policy," EconomiX Working Papers 2008-14, University of Paris West - Nanterre la Défense, EconomiX.
- Bertrand Crettez & Marie-Cécile Fagart, 2005. "Does Entry Improve Welfare ? A General Equilibrium Approach of Competition Policy," Working Papers 2005-08, Centre de Recherche en Economie et Statistique.
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
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