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Production Efficiency and Income Distribution with Competition Induced by Antitrust Measures

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  • Peter Josef Stauvermann

    (Department of Global Business and Economics, Changwon National University, Changwon 51142, Republic of Korea)

  • Ronald Ravinesh Kumar

    (Department of Economics and Finance, The Business School, Saigon South Campus, RMIT University, Ho Chi Minh City 700000, Vietnam)

Abstract

We use a three-sector overlapping generations model to examine the efficiency characteristics and income distribution in the long-run steady-state equilibrium. Assuming two sectors produce intermediate goods within an oligopolistic competition, we explore the implications for production efficiency and income distribution, given an increase in competition induced by antitrust measures. Our analysis presents the possibility of steady-state welfare under imperfect competition surpassing that of perfect competition when declining competition leads to a redistribution of income from older to younger generations. Nevertheless, greater competition (within oligopoly competition) consistently results in a more equitable income distribution.

Suggested Citation

  • Peter Josef Stauvermann & Ronald Ravinesh Kumar, 2023. "Production Efficiency and Income Distribution with Competition Induced by Antitrust Measures," JRFM, MDPI, vol. 16(9), pages 1-23, September.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:9:p:399-:d:1234367
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    References listed on IDEAS

    as
    1. Peter J. Stauvermann & Ronald R. Kumar, 2022. "Does more market competition lead to higher income and utility in the long run?," Bulletin of Economic Research, Wiley Blackwell, vol. 74(3), pages 761-782, July.
    2. David Autor & David Dorn & Lawrence F. Katz & Christina Patterson & John Van Reenen, 2017. "Concentrating on the Fall of the Labor Share," American Economic Review, American Economic Association, vol. 107(5), pages 180-185, May.
    3. Pauline Affeldt & Tomaso Duso & Klaus Gugler & Joanna Piechucka, 2021. "Market Concentration in Europe: Evidence from Antitrust Markets," Discussion Papers of DIW Berlin 1930, DIW Berlin, German Institute for Economic Research.
    4. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    5. David Autor & David Dorn & Lawrence F Katz & Christina Patterson & John Van Reenen, 2020. "The Fall of the Labor Share and the Rise of Superstar Firms [“Automation and New Tasks: How Technology Displaces and Reinstates Labor”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 645-709.
    6. Jan De Loecker & Jan Eeckhout & Gabriel Unger, 2020. "The Rise of Market Power and the Macroeconomic Implications [“Econometric Tools for Analyzing Market Outcomes”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 561-644.
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    8. Marianne Bertrand & Antoinette Schoar, 2006. "The Role of Family in Family Firms," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 73-96, Spring.
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