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The State Aid Game

Author

Listed:
  • Stephen Martin

    (Purdue University)

  • Paola Valbonesi

    (University of Padua)

Abstract

We 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.

Suggested Citation

  • Stephen Martin & Paola Valbonesi, 2006. "The State Aid Game," "Marco Fanno" Working Papers 0024, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0024
    as

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    File URL: https://economia.unipd.it/sites/economia.unipd.it/files/20060024.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Humphery-Jenner, M., 2011. "Diversification in Private Equity Funds : On Knowledge-sharing, Risk-aversion and Limited-attention," Other publications TiSEM 072b8035-9fb0-4f18-9c1b-f, Tilburg University, School of Economics and Management.
    2. Fatih Cemil ÖZBUĞDAY & Erik BROUWER, 2016. "Measuring the Extent of European State Aid Control: An Econometric Analysis of the European Commission Decisions," Sosyoekonomi Journal, Sosyoekonomi Society, issue 24(30).

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    More about this item

    Keywords

    state aid; exit; market integration;
    All these keywords.

    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

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