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Consumer discrimination, duopoly, and black firm entry: The welfare effect of subsidies

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  • Gregory Price

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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Suggested Citation

  • Gregory Price, 1995. "Consumer discrimination, duopoly, and black firm entry: The welfare effect of subsidies," The Review of Black Political Economy, Springer;National Economic Association, vol. 23(4), pages 69-76, June.
  • Handle: RePEc:spr:blkpoe:v:23:y:1995:i:4:p:69-76
    DOI: 10.1007/BF02689912
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    References listed on IDEAS

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    1. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
    2. Fishman, Arthur & Gandal, Neil, 1994. "Experimentation and learning with networks effects," Economics Letters, Elsevier, vol. 44(1-2), pages 103-108.
    3. Varian, Hal R., 1995. "Entry and cost reduction," Japan and the World Economy, Elsevier, vol. 7(4), pages 399-410, November.
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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;National Economic Association, vol. 32(3), pages 121-140, March.

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