Comparative Advantage Under Monopoly: A Note On the Role of Market Power
AbstractWe argue that it is the number of agents holding market power, rather than the presence of market power itself, that may force Ricardian economies into autarchy. We apply the concepts of monopoly equilibrium by Baldwin (1948) to the model of Cordella and Gabszewicz (1997) to show that, differently from the oligopoly case, trade always arises at a monopoly equilibrium whereas autarchy is never an outcome. As a consequence, monopoly Pareto-dominates oligopoly.
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Bibliographic InfoPaper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp724.
Date of creation: Jan 2011
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Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
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.:
- Cordella, Tito & J. Gabszewicz, Jean, 1997.
"Comparative advantage under oligopoly,"
Journal of International Economics,
Elsevier, vol. 43(3-4), pages 333-346, November.
- CORDELLA, Tito & GABSZEWICZ, Jean, 1993. "Comparative Advantage under Oligopoly," CORE Discussion Papers 1993007, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cordella, T. & Gabszewicz, J. J., . "Comparative advantage under oligopoly," CORE Discussion Papers RP -1286, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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