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A Case for Affirmative Action in Competition Policy

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Author Info
VILLENEUVE, BERTRAND
ZHANG, VANESSA YANHUA

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Abstract

We analyze the trade-off faced by competition authorities envisaging a one-shot structural reform in a capitalistic industry. A structure is (1) a sharing of productive capital at some time and (2) a sharing of sites or any other non-reproducible assets. The latter represent opportunities. These two distinct dimensions of policy illustrate the importance of a dynamic theory in which firms may differ in several respects. Though equalization of endowments and rights is theoretically optimal, realistic constraints force competition authorities to adopt second-best solutions. Affirmative action here appears to explain why helping the disadvantaged contributes maximally to social surplus.

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File URL: http://mpra.ub.uni-muenchen.de/9700/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 9700.

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Date of creation: 23 Jul 2008
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Handle: RePEc:pra:mprapa:9700

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Related research
Keywords: Competition policy capacity accumulation Cournot competition asymmetric duopoly regulatory consistency differential games.

Find related papers by JEL classification:
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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This page was last updated on 2008-11-18.


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