The State Aid Game
AbstractWe present a model of the impact of state aid on equilibrium market structure and on market performance in an integrating market when the process of integration is driven by consumer inertia. In a partial equilibrium model, it is an equilibrium for governments to grant state aid, even though this reduces common market welfare.
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Bibliographic InfoPaper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0024.
Length: 37 pages
Date of creation: Jul 2006
Date of revision:
state aid; exit; market integration;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-26 (All new papers)
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