Robust Welfare under Imperfect Competition

Konstantin von Beringe and Mark Whitmeyer

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Abstract: We study welfare analysis for policy changes when supply behavior is only partially known. We augment the robust-demand approach of Kang and Vasserman (2025) with two supply primitives--intervals of feasible pass-through and conduct (market-power) parameters--applied to two equilibrium snapshots. A simple accounting identity distills the supply-side contribution to welfare to a simple integral expression. From there, we deduce that the bounds are produced by a single-threshold "bang-bang" inverse pass-through function. This, plus a modification of Kang and Vasserman's (2025) demand-side characterization, delivers simple bounds for consumer surplus, producer surplus, tax revenue, total surplus, and deadweight loss. We also study an ad valorem extension.

Date: 2025-10
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