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Market Structure, Scale Economies and Industry Performance Author info | Abstract | Publisher info | Download info | Related research | Statistics Rabah Amir (University of Copenhagen, Institute of Economics)
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We provide an extensive and general investigation of the effects on industry performance (profits and social welfare) of exogenously changing the number of firms in a Cournot framework. This amounts to an in-depth exploration of the well-known trade-off between competition and production efficiency. We establish that under scale economies, welfare is maximized by a finite number of firms. Our results shed light on several theoretical issues and policy debates in industrial organization, including the relationship between the Herfindahl index and social welfare, free versus socially optimal entry, concentration and profitability, destructive competition and natural monopoly. Our analytical approach combines simplicity with generality
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Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number
00-08.
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Length: 30 pages
Date of creation: May 2000Date of revision:
Handle: RePEc:kud:kuiedp:0008Contact details of provider: Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark Phone: (+45) 35 32 26 26 Fax: +45 35 32 30 00 Web page: http://www.econ.ku.dk More information through EDIRC
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Keywords: Cournot oligopoly ; Returns to scale ; Entry ; Equilibrium comparative statics ; Other versions of this item:
Paper Rahab Amir, 2000.
"Market Structure, Scale Economies, and Industry Performance ,"
CIG Working Papers
FS IV 00-08, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
[Downloadable!] Rabah Amir, .
"Market Structure, Scale Economies and Industry Performance ,"
CIE Discussion Papers
2000-03, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
[Downloadable!] AMIR, Rabah, 2003.
"Market structure, scale economies and industry performance ,"
CORE Discussion Papers
2003065, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
[Downloadable!] Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection D60 - Microeconomics - - Welfare Economics - - - General L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports :
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Other versions:
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Boone, J., 2004.
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CEPR Discussion Papers
4330, C.E.P.R. Discussion Papers.
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BELLEFLAMME, Paul & TOULEMONDE, Eric, 2007.
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Ben Zissimos, 2006.
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