Advanced Search
MyIDEAS: Login

More Competitors or more Competition? Market Concentration and the Intensity of Competition

Contents:

Author Info

  • Menezes, Flavio
  • Quiggin, John

Abstract

We present a model of competitive interaction among n symmetric firms producing a homogeneous good that includes both Bertrand and Cournot competition as special cases. In our model the intensity of competition is captured by a single parameter—the perceived slope of competitors’ supply functions. We show that total welfare increases monotonically with the intensity of competition and the number of competitors. We then examine how the intensity of competition affects the gains from changing the number of competitors. When competition is intense, most of the gains from extra competition are captured with the entry of a small number of firms and subsequent gains from entry are small. Conversely, when the intensity of competition is small, a reduction in the number of firms can have a large impact on welfare

Download Info

If 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.
File URL: http://purl.umn.edu/151195
Download Restriction: no

Bibliographic Info

Paper provided by University of Queensland, School of Economics in its series Risk and Sustainable Management Group Working Papers with number 151195.

as in new window
Length:
Date of creation: 29 Aug 2011
Date of revision:
Handle: RePEc:ags:uqsers:151195

Contact details of provider:
Postal: St. Lucia, Qld. 4072
Phone: +61 7 3365 6570
Fax: +61 7 3365 7299
Email:
Web page: http://www.uq.edu.au/economics/index.html
More information through EDIRC

Related research

Keywords: Competition intensity; Number of competitors; Mergers; Production Economics; Research and Development/Tech Change/Emerging Technologies; L11; L13; L41;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Menezes, Flavio & Quiggin, John, 2009. "Markets for Influence," Risk and Sustainable Management Group Working Papers 151189, University of Queensland, School of Economics.
  2. Grant, Simon & Quiggin, John, 1996. "Capital Precommitment and Competition in Supply Schedules," Journal of Industrial Economics, Wiley Blackwell, vol. 44(4), pages 427-41, December.
  3. Robson, Arthur J., 1981. "Implicit oligopolistic collusion is destroyed by uncertainty," Economics Letters, Elsevier, vol. 7(1), pages 75-80.
  4. Xavier Vives, 2009. "Strategic Supply Function Competition with Private Information," CESifo Working Paper Series 2856, CESifo Group Munich.
  5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
  6. Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
  7. Flavio Menezes & John Quiggin, 2007. "Games without Rules," Theory and Decision, Springer, vol. 63(4), pages 315-347, December.
  8. Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, vol. 57(6), pages 1243-77, November.
  9. Grossman, Sanford J, 1981. "Nash Equilibrium and the Industrial Organization of Markets with Large Fixed Costs," Econometrica, Econometric Society, vol. 49(5), pages 1149-72, September.
  10. Turnbull, Stephen J., 1983. "Choosing duopoly solutions by consistent conjectures and by uncertainty," Economics Letters, Elsevier, vol. 13(2-3), pages 253-258.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Menezes, Flavio & Quiggin, John, 2013. "Inferring the strategy space from market outcomes," Risk and Sustainable Management Group Working Papers 151206, University of Queensland, School of Economics.
  2. Tina Kao & Flavio Menezes & John Quiggin, 2014. "Optimal access regulation with downstream competition," Journal of Regulatory Economics, Springer, vol. 45(1), pages 75-93, February.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ags:uqsers:151195. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.