Industry Restructuring: A Case for Affirmative Action
We analyze the trade-oﬀ faced by authorities envisaging a one-shot structural re-form in a capitalistic industry. A structure is modeled as (1) a sharing of productive capital at some time and (2) a sharing of scarce sites or any other non-reproducible assets. These two distinct dimensions of policy illustrate the importance of a dy-namic theory in which ﬁrms durably diﬀer in several respects. Though equalization of endowments and rights is theoretically optimal, realistic constraints force com-petition authorities to adopt second-best solutions. Aﬃrmative action here is the policy that recognizes the fact that, under certain circumstances, helping the dis-advantaged contributes maximally to social surplus.
|Date of creation:||Jan 2013|
|Date of revision:|
|Publication status:||Published in Annales d'Economie et de Statistique, 2013, no. 109|
|Contact details of provider:|| Web page: http://www.dauphine.fr/en/welcome.html|
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