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Equilibrium State Aid in Integrating Markets

Author

Listed:
  • Martin Stephen

    () (Purdue University)

  • Valbonesi Paola

    () (University of Padova)

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

  • Martin Stephen & Valbonesi Paola, 2008. "Equilibrium State Aid in Integrating Markets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-39, August.
  • Handle: RePEc:bpj:bejeap:v:8:y:2008:i:1:n:33
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    References listed on IDEAS

    as
    1. Martin, Stephen, 2001. "Industrial Organization: A European Perspective," OUP Catalogue, Oxford University Press, number 9780198297284.
    2. Bruce Elmslie, 2004. "Adam Smith and Noneconomic Objectives," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 689-692, September.
    3. Brainard, S Lael, 1994. "Last One Out Wins: Trade Policy in an International Exit Game," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 151-172, February.
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    Cited by:

    1. Bertsch Christoph & Calcagno Claudio & Le Quement Mark, 2015. "Systematic Bailout Guarantees and Tacit Coordination," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(1), pages 1-36, January.
    2. Marcella Nicolini & Carlo Scarpa & Paola Valbonesi, 2013. "Aiding Car Producers in the EU: Money in Search of a Strategy," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 67-87, March.
    3. Christoph Bertsch & Claudio Calcagno & Mark Le Quement, 2009. "State aid and tacit collusion," Economics Working Papers ECO2009/36, European University Institute.
    4. 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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