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Consumer Discrimination, Duopoly, and Black Firm Entry: The Welfare Effect of Subsidies

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  • Gregory N. Price

    (North Carolina A&T State University, Greensboro, NC.)

Abstract

Consumer discrimination, to the extent that it discourages the entry of Black-owned firms may be welfare reducing, as market output is lower than otherwise. This paper offers a simple model of duopoly in which conditions are derived for which a profit subsidy to Black-owned firms increases, decreases, or has no effect on social welfare.

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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 9505001.

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Length: 9 pages
Date of creation: 16 May 1995
Date of revision:
Handle: RePEc:wpa:wuwpio:9505001

Note: 9 pages, compressed postscript file, need uncompress and a Postscript printer to print.
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  1. Varian, Hal R., 1995. "Entry and cost reduction," Japan and the World Economy, Elsevier, vol. 7(4), pages 399-410, November.
  2. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, March.
  3. Fishman, Arthur & Gandal, Neil, 1994. "Experimentation and learning with networks effects," Economics Letters, Elsevier, vol. 44(1-2), pages 103-108.
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Cited by:
  1. Gregory Price, 2005. "Consumer discrimination and black firm entry deterrence: Some reparable damage estimates," The Review of Black Political Economy, Springer, vol. 32(3), pages 121-140, March.

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