IDEAS home Printed from https://ideas.repec.org/p/hhs/sdueko/2011_001.html
   My bibliography  Save this paper

Nonprofit and profit companies in monopolistic competition

Author

Listed:

Abstract

A homogenous goods market with nonprofit and profit companies engaged in monopolistic competition is proposed. In a short run equilibrium, entrance of more companies of both types increases consumer surplus and reduces company profit. However, nonprofit companies under a long run zero profit constraint will act inefficiently and have higher marginal costs than profit companies. From this follows that more funds for donations to nonprofit companies reduce the welfare to be gained on the market. Depending on the size of donations, nonprofit companies may have higher, the same or lower (quality) output than profit companies.

Suggested Citation

  • Skak, Morten, 2011. "Nonprofit and profit companies in monopolistic competition," Discussion Papers on Economics 1/2011, University of Southern Denmark, Department of Economics.
    • Handle: RePEc:hhs:sdueko:2011_001
    as

    Download full text from publisher

    File URL: https://www.sdu.dk/-/media/files/om_sdu/institutter/ivoe/disc_papers/disc_2011/dpbe1_2011.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andreoni, James & Payne, A. Abigail, 2011. "Is crowding out due entirely to fundraising? Evidence from a panel of charities," Journal of Public Economics, Elsevier, vol. 95(5), pages 334-343.
    2. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, vol. 81(1), pages 99-115, July.
    3. Goering, Gregory E., 2008. "Welfare impacts of a non-profit firm in mixed commercial markets," Economic Systems, Elsevier, vol. 32(4), pages 326-334, December.
    4. Anup Malani & Guy David, 2008. "Does Nonprofit Status Signal Quality?," The Journal of Legal Studies, University of Chicago Press, vol. 37(2), pages 551-576, June.
    5. Garth Heutel, 2014. "Crowding Out and Crowding In of Private Donations and Government Grants," Public Finance Review, , vol. 42(2), pages 143-175, March.
    6. Matthias Benz, 2005. "Not for the Profit, but for the Satisfaction? – Evidence on Worker Well‐Being in Non‐Profit Firms," Kyklos, Wiley Blackwell, vol. 58(2), pages 155-176, May.
    7. Deneffe, Daniel & Masson, Robert T., 2002. "What do not-for-profit hospitals maximize?," International Journal of Industrial Organization, Elsevier, vol. 20(4), pages 461-492, April.
    8. Edward L. Glaeser, 2003. "The Governance of Not-for-Profit Organizations," NBER Books, National Bureau of Economic Research, Inc, number glae03-1.
    9. Lakdawalla, Darius & Philipson, Tomas, 2006. "The nonprofit sector and industry performance," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1681-1698, September.
    10. David Mullins & Bruce Walker, 2009. "The Impact of Direct Public Funding for Private Developers on Non-Profit Housing Networks in England: Exploring a Research Agenda," European Journal of Housing Policy, Taylor and Francis Journals, vol. 9(2), pages 201-222.
    11. Deneffe, Daniel & Masson, Robert T., 2002. "Erratum to "What do not-for-profit hospitals maximize?": [Internat. J. of Ind. Organization 20(4) (2002) 461-492]," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 1059-1059, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jens Prüfer, 2011. "Competition And Mergers Among Nonprofits," Journal of Competition Law and Economics, Oxford University Press, vol. 7(1), pages 69-92.
    2. Jill R. Horwitz & Austin Nichols, 2007. "What Do Nonprofits Maximize? Nonprofit Hospital Service Provision and Market Ownership Mix," NBER Working Papers 13246, National Bureau of Economic Research, Inc.
    3. Barigozzi, Francesca & Burani, Nadia, 2016. "Competition and screening with motivated health professionals," Journal of Health Economics, Elsevier, vol. 50(C), pages 358-371.
    4. Benoit Dostie & Mohsen Javdani, 2020. "Not for the Profit, But for the Training? Gender Differences in Training in the For‐Profit and Non‐Profit Sectors," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 644-689, September.
    5. Pierre Koning & Joëlle Noailly & Sabine Visser, 2007. "Do non-profits make a difference? Evaluating non-profit vis-à-vis for-profit organisations in social services," CPB Document 142, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Singleton, John D., 2017. "Putting dollars before scholars? Evidence from for-profit charter schools in Florida," Economics of Education Review, Elsevier, vol. 58(C), pages 43-54.
    7. Albert H. Choi, 2015. "Non-Profit Status and Relational Sanctions: Commitment to Quality through Repeat Interactions and Organizational Choice," Journal of Law and Economics, University of Chicago Press, vol. 58(4).
    8. Verdier, Thierry & Aldashev, Gani & Jaimovich, Esteban, 2014. "When warm glow burns: Motivational (mis)allocation in the non-profit sector," CEPR Discussion Papers 9963, C.E.P.R. Discussion Papers.
    9. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2012. "Quality competition with profit constraints," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 642-659.
    10. Scharf, Kimberley, 2010. "Public Funding of Charities and Competitive Charity Selection," CEPR Discussion Papers 7937, C.E.P.R. Discussion Papers.
    11. Gani Aldashev & Esteban Jaimovich & Thierry Verdier, 2018. "Small is Beautiful: Motivational Allocation in the Nonprofit Sector," Journal of the European Economic Association, European Economic Association, vol. 16(3), pages 730-780.
    12. S. Verbruggen & J. Christiaens, 2010. "Earnings Management in Nonprofit Organizations: Does Governmental Financing Play a Role?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 10/665, Ghent University, Faculty of Economics and Business Administration.
    13. Tomas J. Philipson & Richard A. Posner, 2009. "Antitrust in the Not-for-Profit Sector," Journal of Law and Economics, University of Chicago Press, vol. 52(1), pages 1-18, February.
    14. Buccella, Domenico & Fanti, Luciano & Gori, Luca, 2024. "Corporate Social Responsibility: A theory of the firm revisited with environmental issues," GLO Discussion Paper Series 1421, Global Labor Organization (GLO).
    15. Herr, A. & Saric, A., 2016. "The Welfare Effects of Single Rooms in German Nursing Homes: A Structural Approach," Health, Econometrics and Data Group (HEDG) Working Papers 16/23, HEDG, c/o Department of Economics, University of York.
    16. Gao, Qiuming & Wang, Derek, 2021. "Hospital efficiency and equity in health care delivery: A study based in China," Socio-Economic Planning Sciences, Elsevier, vol. 76(C).
    17. Behrens, Christoph & Emrich, Eike & Hämmerle, Martin & Pierdzioch, Christian, 2017. "Match quality, crowding out, and crowding in: Empirical evidence for German sports clubs," Working Papers of the European Institute for Socioeconomics 21, European Institute for Socioeconomics (EIS), Saarbrücken.
    18. Lapointe, Simon & Perroni, Carlo & Scharf, Kimberley & Tukiainen, Janne, 2018. "Does market size matter for charities?," Journal of Public Economics, Elsevier, vol. 168(C), pages 127-145.
    19. Dalton, Christina Marsh & Warren, Patrick L., 2016. "Cost versus control: Understanding ownership through outsourcing in hospitals," Journal of Health Economics, Elsevier, vol. 48(C), pages 1-15.
    20. Lien, Hsien-Ming & Chou, Shin-Yi & Liu, Jin-Tan, 2008. "Hospital ownership and performance: Evidence from stroke and cardiac treatment in Taiwan," Journal of Health Economics, Elsevier, vol. 27(5), pages 1208-1223, September.

    More about this item

    Keywords

    Nonprofit; Market structure; Monopolistic competition; Efficiency; Funding; Donations; Grants; Welfare;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hhs:sdueko:2011_001. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Astrid Holm Nielsen (email available below). General contact details of provider: https://edirc.repec.org/data/okioudk.html .

    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.