Global vs.Local Competition
AbstractWe analyze the impact of increased outside opportunities brought to consumers by improved access to a global market on local mar- ket performance under monopoly vs. oligopoly. If consumers choose once where to buy, we show that under all forms of organizing the local market, increased competition from the global market will lo- cally crowd out variety. The e ect on prices is much less clear. While increased global competition yields a price reduction under monopoly, prices may increase under oligopoly. We check the robustness of these results in various extensions and draw consequences on competition and industrial policies.
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Bibliographic InfoPaper provided by Netherlands Central Bank in its series DNB Staff Reports (discontinued) with number 97.
Length: 41 pages
Date of creation: 2003
Date of revision:
Global competition; Monopoly; Oligopoly; Search; Retail Trade;
Find related papers by JEL classification:
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
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