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A Case for Affirmative Action in Competition Policy

Author

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  • Villeneuve, Bertrand
  • Zhang, Vanessa Yanhua

Abstract

We analyze the trade-off faced by competition authorities envisaging a one-shot structural reform in a capitalistic industry. A structure is (1) a sharing of productive capital at some time and (2) a sharing of sites or any other non-reproducible assets. The latter represent opportunities. These two distinct dimensions of policy illustrate the importance of a dynamic theory in which firms may differ in several respects. Though equalization of endowments and rights is theoretically optimal, realistic constraints force competition authorities to adopt second-best solutions. Affirmative action here appears to explain why helping the disadvantaged contributes maximally to social surplus.

Suggested Citation

  • Villeneuve, Bertrand & Zhang, Vanessa Yanhua, 2008. "A Case for Affirmative Action in Competition Policy," MPRA Paper 9700, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:9700
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    File URL: https://mpra.ub.uni-muenchen.de/9700/1/MPRA_paper_9700.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Competition policy; capacity accumulation; Cournot competition; asymmetric duopoly; regulatory consistency; differential games;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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