Imperfect Competition and Firm Efficiency: a General Equilibrium Approach

A. Pompermaier

Faechergruppe Volkswirtschaftlehre from University of Hamburg, Institute of Economics

Abstract: This paper presenta a general equilibrium model of imperfect competition in which firm efficiency depends on the level of product market competition. X-efficiency is shown to arise to the extent unions directly affect the level of employment. A positive relationship is established between total employment and firm efficiency. Employment and output are shown to be not necessarily increasing in the degree of competition and lower total employment may lead to higher output and welfare.

Keywords: GENERAL EQUILIBRIUM; COMPETITION; EFFICIENCY; MARKET STRUCTURE (search for similar items in EconPapers)
JEL-codes: D40 D50 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:fth:hambec:112

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