Does entry improve welfare? A general equilibrium approach to competition policy
AbstractWe consider a simple general equilibrium model with imperfect competition. Firms are price taker in the input market and compete Ã la Cournot in some or all of the product markets (their technology displays constant returns to scale). We show that an increase in the number of firms does not always improve welfare. We also provide a characterization in terms of mark-up rates of the sectors for which entry is welfare enhancing. Thus, this paper challenges the common idea that mergers with no cost synergy are not desirable for consumers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Journal of Economics.
Volume (Year): 98 (2009)
Issue (Month): 2 (November)
Contact details of provider:
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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joseph F. Francois & Henrik Horn, 1998. "Competition Policy in an Open Economy," Tinbergen Institute Discussion Papers 98-092/2, Tinbergen Institute.
- Motta,Massimo, 2004. "Competition Policy," Cambridge Books, Cambridge University Press, number 9780521016919, October.
- Victor Ginsburgh & Michiel Keyzer, 1997.
"The structure of applied general equilibrium models,"
ULB Institutional Repository
2013/1653, ULB -- Universite Libre de Bruxelles.
- Victor Ginsburgh & Michiel Keyzer, 2002. "The Structure of Applied General Equilibrium Models," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571579, December.
- Victor Ginsburgh & Michiel Keyzer, 2002. "The structure of applied general equilibrium models," ULB Institutional Repository 2013/3313, ULB -- Universite Libre de Bruxelles.
- Stephen Spear, .
"The Electricity Market Game,"
GSIA Working Papers
2003-E17, Carnegie Mellon University, Tepper School of Business.
- J. Peter Neary, 2003.
"Competitive versus Comparative Advantage,"
The World Economy,
Wiley Blackwell, vol. 26(4), pages 457-470, 04.
- Bertrand Crettez & Marie-Cécile Fagart, 2005. "A Note on The Pareto Efficiency of General Oligopolistic Equilibria," Working Papers 2005-05, Centre de Recherche en Economie et Statistique.
- Illtae Ahn & Hyukseung Shin, 2012. "Domestic Welfare Effects Of The Entry Of A Foreign Firm," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(2), pages 35-57, June.
- Arijit Mukherjee & Udo Broll & Soma Mukherjee, 2009.
"The welfare effects of entry: the role of the input market,"
Journal of Economics,
Springer, vol. 98(3), pages 189-201, December.
- Arijit Mukherjee & Udo Broll & Soma Mukherjee, . "The welfare effects of entry: the role of the input market," Discussion Papers 08/12, University of Nottingham, School of Economics.
- Marc Deschamps, 2013. "Pourquoi des politiques de concurrence ?," GREDEG Working Papers 2013-23, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.