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Asymmetric Multiproduct Firms, Profitability And Welfare

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  • George Symeonidis

Abstract

In a differentiated multiproduct Cournot duopoly with linear demand, industry profit usually falls (even though concentration rises) when the distribution of products across firms becomes more asymmetric, if the products are not very differentiated or the total number of products is large. Consumer surplus and overall welfare always fall as the degree of asymmetry increases. These results contrast with the conventional wisdom on the effects of firm heterogeneity and the links between concentration and industry profits.

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  • George Symeonidis, 2009. "Asymmetric Multiproduct Firms, Profitability And Welfare," Bulletin of Economic Research, Wiley Blackwell, vol. 61(2), pages 139-150, April.
    • Handle: RePEc:bla:buecrs:v:61:y:2009:i:2:p:139-150
    DOI: 10.1111/j.1467-8586.2008.00300.x
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    References listed on IDEAS

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    7. Grossmann, Volker, 2007. "Firm size and diversification: Multiproduct firms in asymmetric oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(1), pages 51-67, February.
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    9. Symeonidis, George, 2003. "Quality heterogeneity and welfare," Economics Letters, Elsevier, vol. 78(1), pages 1-7, January.
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    Cited by:

    1. Akio Kawasaki, 2021. "Optimal number of privatised products in a differentiated mixed oligopoly with free market entry," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 651-663, December.
    2. Dong, Quean & Bárcena Ruiz, Juan Carlos & Garzón San Felipe, María Begoña, 2016. "Partial Privatization of State Holding Corporations," IKERLANAK info:eu-repo/grantAgreeme, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    3. Juan Carlos Bárcena-Ruiz & María Begoña Garzón, 2017. "Privatization of state holding corporations," Journal of Economics, Springer, vol. 120(2), pages 171-188, March.

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