Advanced Search
MyIDEAS: Login to save this paper or follow this series

Effciency and surplus bounds in Cournot competition

Contents:

Author Info

  • Simon P. Anderson

    ()

  • Regis Renault

    ()

Abstract

We derive bounds on the ratios of deadweight loss and consumer surplus to producer surplus under Cournot competition. To do so, we introduce a parameterization of the degree of curvature of market demand using the parallel concepts of ½-concavity and ½-convexity. The ”more concave” is demand, the larger the share of producer surplus in overall surplus, the smaller is consumer surplus relative to producer surplus, and the lower the ratio of deadweight loss to producer surplus. Deadweight loss over total potential surplus is at …rst increasing with demand concavity, then eventually decreasing. The analysis is extended to asymmetric …rm costs.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.virginia.edu/economics/RePEc/vir/virpap/papers/virpap353.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 353.

as in new window
Length: 47 pages
Date of creation: Apr 2001
Date of revision:
Handle: RePEc:vir:virpap:353

Contact details of provider:
Web page: http://www.virginia.edu/economics/home.html

Related research

Keywords: Cournot equilibrium; social surplus analysis; deadweight loss; market performance.;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Anderson, S.P. & de Palma, A. & Kreider, B., 1999. "Tax incidece in Differentiated product Oligopoly," Papers, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor. 99-10, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
  2. Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 43(2), pages 217-35, June.
  3. Andrew Caplin & Barry Nalebuff, 1990. "Aggregation and Social Choice: A Mean Voter Theorem," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 938, Cowles Foundation for Research in Economics, Yale University.
  4. Novshek, William., 1984. "On the Existence of Cournot Equilibrium," Working Papers, California Institute of Technology, Division of the Humanities and Social Sciences 517, California Institute of Technology, Division of the Humanities and Social Sciences.
  5. Andrew Caplin & Barry Nalebuff, 1990. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 937, Cowles Foundation for Research in Economics, Yale University.
  6. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 64, University of Warwick, Department of Economics.
  7. Besley, Timothy J. & Rosen, Harvey S., 1999. "Sales Taxes and Prices: An Empirical Analysis," National Tax Journal, National Tax Association, National Tax Association, vol. 52(n. 2), pages 157-78, June.
  8. Poterba, James M., 1996. "Retail Price Reactions to Changes in State and Local Sales Taxes," National Tax Journal, National Tax Association, National Tax Association, vol. 49(2), pages 165-76, June.
  9. N. Gregory Mankiw & Michael D. Whinston, 1986. "Free Entry and Social Inefficiency," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 48-58, Spring.
  10. Cowling, Keith & Mueller, Dennis C, 1978. "The Social Costs of Monopoly Power," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 88(352), pages 727-48, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Luis Corchón & Félix Marcos, 2010. "Price regulation in oligopoly," Economics Working Papers, Universidad Carlos III, Departamento de Economía we100101, Universidad Carlos III, Departamento de Economía.
  2. Luis C. Corchon & Galina Zudenkova, 2008. "Computing welfare losses from data under imperfect competition with heterogeneous goods," Economics Working Papers, Universidad Carlos III, Departamento de Economía we082616, Universidad Carlos III, Departamento de Economía.
  3. Arghya Ghosh & Alberto Motta, 2011. "Outsourcing with Heterogeneous Firms," Discussion Papers, School of Economics, The University of New South Wales 2011-09, School of Economics, The University of New South Wales.
  4. Luis C. Corchon, 2006. "Welfare losses under cournot competition," Economics Working Papers, Universidad Carlos III, Departamento de Economía we063910, Universidad Carlos III, Departamento de Economía.
  5. E. Glen Weyl & Michal Fabinger, 2013. "Pass-Through as an Economic Tool: Principles of Incidence under Imperfect Competition," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 121(3), pages 528 - 583.
  6. Damjanovic, Tatiana & Ulph, David, 2010. "Tax progressivity, income distribution and tax non-compliance," European Economic Review, Elsevier, Elsevier, vol. 54(4), pages 594-607, May.
  7. Simon P. Anderson & R�gis Renault, 2006. "Advertising Content," American Economic Review, American Economic Association, American Economic Association, vol. 96(1), pages 93-113, March.
  8. Ritz, R.A., 2012. "On welfare losses due to imperfect competition," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 1234, Faculty of Economics, University of Cambridge.
  9. Mares, Vlad & Swinkels, Jeroen M., 2011. "Near-optimality of second price mechanisms in a class of asymmetric auctions," Games and Economic Behavior, Elsevier, Elsevier, vol. 72(1), pages 218-241, May.
  10. Andrew F. Newman & Patrick Legros, 2011. "Incomplete Contracts and Industrial Organization: A Survey," Boston University - Department of Economics - Working Papers Series, Boston University - Department of Economics WP2011-036, Boston University - Department of Economics.
  11. Fevrier, Philippe & Linnemer, Laurent, 2004. "Idiosyncratic shocks in an asymmetric Cournot oligopoly," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 22(6), pages 835-848, June.
  12. Tomohiro Ara & Arghya Ghosh, 2012. "Bargaining, Tariffs and Vertical Specialization," Discussion Papers, School of Economics, The University of New South Wales 2012-14, School of Economics, The University of New South Wales.
  13. Robert Ritz, 2013. "On welfare losses due to imperfect competition," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 1334, Faculty of Economics, University of Cambridge.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:vir:virpap:353. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Debby Stanford).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.