The Welfare Effects of Location and Quality in Oligopoly

In this paper we argue that two important causes of welfare losses in oligopolistic markets have been neglected. We show that in models where location is endogenous, welfare losses arising from wrong locations or from lack of market coverage may be substantial despite firms competing in prices. In contrast, welfare losses arising from quality choice are modest but they might vary discontinuously with the size of the market.

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Year of publication:	2010-09
Authors:	Corchón, Luis C. ; Zudenkova, Galina
Institutions:	Departamento de Economía, Universidad Carlos III de Madrid
Subject:	Welfare losses \| Horizontal differentiation \| Hotelling model \| Salop model \| Vertical differentiation

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Extent:	application/pdf
Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	D61 - Allocative Efficiency; Cost-Benefit Analysis ; L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L13 - Oligopoly and Other Imperfect Markets ; L50 - Regulation and Industrial Policy. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008516067