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Entry, market structures and welfare

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  • Suryaprakash Mishra

    (National Law School of India University)

Abstract

Conventionally, entry is thought to enhance welfare by enhancing competition and hence lowering prices and increasing the output. Contrary to the conventional wisdom, working with an $$n$$ n -firm Cournot oligopoly set up and using the trigger strategies, we show that entry may or may not impact welfare. However, entry has the potential to alter the market structure from collusion to Cournot competition, and when it does so, there is a discontinuous rise in welfare.

Suggested Citation

  • Suryaprakash Mishra, 2024. "Entry, market structures and welfare," Journal of Economics, Springer, vol. 142(3), pages 267-276, August.
    • Handle: RePEc:kap:jeczfn:v:142:y:2024:i:3:d:10.1007_s00712-024-00859-w
    DOI: 10.1007/s00712-024-00859-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Entry; Market structures; Cournot competition; Collusion; Welfare;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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