IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v45y1997i3p245-267.html
   My bibliography  Save this article

Looking at the Cost Side of “Monopoly”

Author

Listed:
  • Karl Aiginger
  • Michael Pfaffermayr

Abstract

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 we 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.

Suggested Citation

  • Karl Aiginger & Michael Pfaffermayr, 1997. "Looking at the Cost Side of “Monopoly”," Journal of Industrial Economics, Wiley Blackwell, vol. 45(3), pages 245-267, September.
    • Handle: RePEc:bla:jindec:v:45:y:1997:i:3:p:245-267
    DOI: 10.1111/1467-6451.00048
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-6451.00048
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-6451.00048?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. christoph Engel, 2005. "Voice over IP. Competition Policy and Regulation," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2005_26, Max Planck Institute for Research on Collective Goods.
    2. Lars-Hendrik Röller & Frode Steen, 2006. "On the Workings of a Cartel: Evidence from the Norwegian Cement Industry," American Economic Review, American Economic Association, vol. 96(1), pages 321-338, March.
    3. D. P. T. Young, 2000. "Firms' Market Power, Endogenous Preferences and the Focus of Competition Policy," Review of Political Economy, Taylor & Francis Journals, vol. 12(1), pages 73-87.
    4. Lang, Gunter & Welzel, Peter, 1999. "Mergers among German Cooperative Banks: A Panel-Based Stochastic Frontier Analysis," Small Business Economics, Springer, vol. 13(4), pages 273-286, December.
    5. Karl Aiginger & Michael Pfaffermayr, 1999. "Product Quality, Cost Asymmetry and the Welfare Loss of Oligopoly," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(2), pages 165-180.
    6. Karl Aiginger, 2008. "The Impact of Competition on Macroeconomic Performance," Chapters, in: Klaus Gugler & B. Burcin Yurtoglu (ed.), The Economics of Corporate Governance and Mergers, chapter 14, Edward Elgar Publishing.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:45:y:1997:i:3:p:245-267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.