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Subsidies in Oligopoly Markets: a Welfare Comparison Between Symmetric and Asymmetric Costs


  • Stephen F. Hamilton

    (Kansas State University)

  • Rickard Sandin

    (Stockholm School of Economics)


This article studies welfare effects of uniform production subsidies in oligopoly markets, comparing cases of symmetric and asymmetric costs. Cost asymmetry reduces the welfare impact relative to the symmetric-cost case if the demand function is concave and magnifies the impact if demand is convex. The welfare difference increases with the degree of market power and with the cost differential in the industry.

Suggested Citation

  • Stephen F. Hamilton & Rickard Sandin, 1997. "Subsidies in Oligopoly Markets: a Welfare Comparison Between Symmetric and Asymmetric Costs," Public Finance Review, , vol. 25(6), pages 660-668, November.
  • Handle: RePEc:sae:pubfin:v:25:y:1997:i:6:p:660-668

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    Cited by:

    1. Hamilton, Stephen F., 1999. "Demand shifts and market structure in free-entry oligopoly equilibria," International Journal of Industrial Organization, Elsevier, vol. 17(2), pages 259-275, February.
    2. repec:eee:quaeco:v:67:y:2018:i:c:p:1-7 is not listed on IDEAS

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    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods


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