Looking at the Cost Side of "Monopoly."
Welfare loss under oligopoly is defined as that part of consumer surplus which is lost and not regained by higher profits. In a model with asymmetric firms, this implies that the total welfare loss consists of the deadweight loss triangle plus a cost side inefficiency effect, due to the fact that in imperfect markets not all firms utilize the lowest cost technique. Using a flexible CV-model, the authors calculate these effects empirically for two relatively homogeneous industries (pulp/paper and cement). The deadweight loss triangles are shown to be smaller than the cost difference effect ('the staircase') for these industries. Copyright 1997 by Blackwell Publishing Ltd
Year of publication: |
1997
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Authors: | Aiginger, Karl ; Pfaffermayr, Michael |
Published in: |
Journal of Industrial Economics. - Wiley Blackwell. - Vol. 45.1997, 3, p. 245-67
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Publisher: |
Wiley Blackwell |
Saved in:
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