â€œIneffectiveâ€ competition: a puzzle?
AbstractConventionally, we think of an increase in competition as weakly decreasing prices, increasing the number of consumers served, thus increasing consumer surplus, decreasing firms profits, etc. Here, we demonstrate that, under some tame circumstances, an increase in competition may lead to a price increase in a horizontally differentiated market. We show this relationship for the petrol market in German cities.
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Bibliographic InfoPaper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 117.
Date of creation: May 2006
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-17 (All new papers)
- NEP-COM-2006-06-17 (Industrial Competition)
- NEP-IND-2006-06-17 (Industrial Organization)
- NEP-MIC-2006-06-17 (Microeconomics)
- NEP-MKT-2006-06-17 (Marketing)
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