Subsidies in Oligopoly Markets: a Welfare Comparison Between Symmetric and Asymmetric Costs
AbstractThis article studies welfare effects of uniform production subsidies in oligopoly markets, comparing cases of symmetric and asymmetric costs. Cost asymmetry reduces the welfare impact relative to the symmetric-cost case if the demand function is concave and magnifies the impact if demand is convex. The welfare difference increases with the degree of market power and with the cost differential in the industry.
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Bibliographic InfoArticle provided by in its journal Public Finance Review.
Volume (Year): 25 (1997)
Issue (Month): 6 (November)
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Other versions of this item:
- Hamilton, Stephen F. & Sandin, Rickard, 1995. "Subsidies in Oligopoly Markets: A Welfare Comparison between Symmetric and Asymmetric Costs," Working Paper Series in Economics and Finance 70, Stockholm School of Economics.
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
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- Hamilton, Stephen F., 1999. "Demand shifts and market structure in free-entry oligopoly equilibria," International Journal of Industrial Organization, Elsevier, vol. 17(2), pages 259-275, February.
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