It is usually believed that higher competition, implying more active firms, benefits consumers. We show that this may not be the case in an industry with asymmetric cost firms. A rise in the number of more cost inefficient firms makes the consumers worse-off in the presence of a welfare...

We provide a new rationale for bi-sourcing, which refers to the situation where a final goods producer buys an input from an outside supplier and also produces it in-house. We also show the effects of the product market competition and the implications of different and common outside input...

We show that the entry of private profit-maximising firms makes the consumers worse off compared to having a nationalised monopoly. Such entry increases the nationalised firm’s profit, industry profit, and social welfare, at the expense of the consumers. Our result is important for competition...