Nonprofit and profit companies in monopolistic competition
A homogenous goods market with nonprofit and profit companies engaged in monopolistic competition is proposed. In a short run equilibrium, entrance of more companies of both types increases consumer surplus and reduces company profit. However, nonprofit companies under a long run zero profit constraint will act inefficiently and have higher marginal costs than profit companies. From this follows that more funds for donations to nonprofit companies reduce the welfare to be gained on the market. Depending on the size of donations, nonprofit companies may have higher, the same or lower (quality) output than profit companies.
|Date of creation:||01 Jan 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Business and Economics, University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark|
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- Anup Malani & Guy David, 2008. "Does Nonprofit Status Signal Quality?," The Journal of Legal Studies, University of Chicago Press, vol. 37(2), pages 551-576, 06.
- James Andreoni & A. Abigail Payne, 2010.
"Is Crowding Out Due Entirely to Fundraising? Evidence from a Panel of Charities,"
NBER Working Papers
16372, National Bureau of Economic Research, Inc.
- Andreoni, James & Payne, A. Abigail, 2011. "Is crowding out due entirely to fundraising? Evidence from a panel of charities," Journal of Public Economics, Elsevier, vol. 95(5), pages 334-343.
- Andreoni, James & Payne, A. Abigail, 2011. "Is crowding out due entirely to fundraising? Evidence from a panel of charities," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 334-343, June.
- James Andreoni & A. Abigail Payne, 2010. "Is Crowding Out Due Entirely to Fundraising? Evidence from a Panel of Charities," Department of Economics Working Papers 2010-08, McMaster University.
- Deneffe, Daniel & Masson, Robert T., 2002. "What do not-for-profit hospitals maximize?," International Journal of Industrial Organization, Elsevier, vol. 20(4), pages 461-492, April.
- Garth Heutel, 2009.
"Crowding Out and Crowding In of Private Donations and Government Grants,"
NBER Working Papers
15004, National Bureau of Economic Research, Inc.
- Garth Heutel, 2014. "Crowding Out and Crowding In of Private Donations and Government Grants," Public Finance Review, SAGE Publishing, vol. 42(2), pages 143-175, March.
- Deneffe, Daniel & Masson, Robert T., 2002. "Erratum to "What do not-for-profit hospitals maximize?": [Internat. J. of Ind. Organization 20(4) (2002) 461-492]," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 1059-1059, September.
- Edward L. Glaeser & Andrei Shleifer, 1998.
Harvard Institute of Economic Research Working Papers
1852, Harvard - Institute of Economic Research.
- Lakdawalla, Darius & Philipson, Tomas, 2006. "The nonprofit sector and industry performance," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1681-1698, September.
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