Does Entry Improve Welfare ? A General Equilibrium Approach of Competition Policy
We consider a general equilibrium model under imperfect competition. Firms have constantreturns, they are price taker in the input market and compete à la Cournot in theproduct market. We assume a representative consumer exists. We show that an increase inthe number of firms of a given market does not always improve welfare, challenging thecommon idea according to which mergers with no cost synergy are not desirable for theconsumer.
Year of publication: |
2005
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Authors: | Crettez, Bertrand ; Fagart, Marie-Cécile |
Institutions: | Centre de Recherche en Économie et Statistique (CREST), Groupe des Écoles Nationales d'Économie et Statistique (GENES) |
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