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Market Structure, Scale Economies and Industry Performance Author info | Abstract | Publisher info | Download info | Related research | Statistics Rabah Amir (University of Copenhagen, Institute of Economics)
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We provide an extensive and general investigation of the effects on industry performance (profits and social welfare) of exogenously changing the number of firms in a Cournot framework. This amounts to an in-depth exploration of the well-known trade-off between competition and production efficiency. We establish that under scale economies, welfare is maximized by a finite number of firms. Our results shed light on several theoretical issues and policy debates in industrial organization, including the relationship between the Herfindahl index and social welfare, free versus socially optimal entry, concentration and profitability, destructive competition and natural monopoly. Our analytical approach combines simplicity with generality
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Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number
00-08.
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Length: 30 pages
Date of creation: May 2000Date of revision:
Handle: RePEc:kud:kuiedp:0008Contact details of provider: Postal: Studiestraede 6, DK-1455 Copenhagen K., Denmark Phone: (+45) 35 32 26 26 Fax: +45 35 32 30 00 Web page: http://www.econ.ku.dk More information through EDIRC
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Keywords: Cournot oligopoly Returns to scale Entry Equilibrium comparative statics Other versions of this item:
Paper Rahab Amir, 2000.
"Market Structure, Scale Economies, and Industry Performance ,"
CIG Working Papers
FS IV 00-08, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
[Downloadable!] Rabah Amir, .
"Market Structure, Scale Economies and Industry Performance ,"
CIE Discussion Papers
2000-03, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
[Downloadable!] Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection D60 - Microeconomics - - Welfare Economics - - - General L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports :
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Amir, R. & Lambson, V.E., 1999.
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Suzumura, Kotaro & Kiyono, Kazuharu, 1987.
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Amir, Rabah, 1996.
"Cournot Oligopoly and the Theory of Supermodular Games ,"
Games and Economic Behavior ,
Elsevier, vol. 15(2), pages 132-148, August.
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Other versions:
Full
references Cited by : (explanations , 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.)
Boone, J., 2004.
"A new way to measure competition ,"
Discussion Paper
31, Tilburg University, Center for Economic Research.
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Other versions: Boone, J. & Ours, J.C. van & Wiel, H.P. van der, 2007.
"How (Not) to Measure Competition ,"
Discussion Paper
2007-32, Tilburg University, Center for Economic Research.
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Other versions:
Jan Boone & Jan van Ours & Henry van der Wiel, 2007.
"How (not) to measure competition ,"
CPB Discussion Papers
91, CPB Netherlands Bureau for Economic Policy Analysis.
[Downloadable!] Boone, J. & Ours, J.C. van & Wiel, H.P. van der, 2007.
"How (Not) to Measure Competition ,"
Discussion Paper
2007-014, Tilburg University, Tilburg Law and Economic Center.
[Downloadable!] Boone, Jan & van der Wiel, Henry & van Ours, Jan C, 2007.
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6275, C.E.P.R. Discussion Papers.
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Paul Belleflamme & Eric Toulemonde, 2007.
"Negative Intra-Group Externalities in Two-Sided Markets ,"
CESifo Working Paper Series
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Lewis Evans and Patrick Hughes, 2003.
"Competition Policy in Small Distant Open Economies: Some Lessons from the Economics Literature ,"
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Ben Zissimos, 2006.
"The Structure and Performance of the World Market in a Cobb-Douglas Example ,"
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