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Competition Policy at the Intensive and Extensive Margins in General Equilibrium

Author

Listed:
  • Kenji Fujiwara

    (Kwansei Gakuin University)

  • Keita Kamei

    (Yamagata University)

Abstract

This paper examines welfare effects of competition policies in a gen- eral equilibrium model in which perfectly competitive and oligopolistic industries coexist and compete for a common factor of production. We first show that increasing the number of oligopolistic firms raises wel- fare if the oligopolists' production technology exhibits non-increasing returns to scale. Then, we address another competition policy mod- eled by an increase in the portion of perfectly competitive industries, finding that this policy improves welfare if decreasing returns of the oligopolists' technology are strong enough. These results suggest that the degree of returns to scale plays a key role for welfare-enhancing competition policy.

Suggested Citation

  • Kenji Fujiwara & Keita Kamei, 2016. "Competition Policy at the Intensive and Extensive Margins in General Equilibrium," KIER Working Papers 954, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:954
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Competition policy; General oligopolistic equilibrium (GOLE); Welfare; Returns to scale.;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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    This paper has been announced in the following NEP Reports:

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