Local search markets and external competition

Patrick Legros and Konrad O. Stahl

No 7683, CESifo Working Paper Series from CESifo

Abstract: Increased competition tends to benefit all buyers with increasing product variety and decreasing prices. However, if local and external market channels compete for the same class of products, increased competition from the external market crowds out local variety. Under local monopoly, local buyer surplus co-moves with external buyer surplus. Under local free entry oligopoly, buyer surplus is U-shaped. If buyer surplus in the external market is low, local surplus is better provided by local oligopoly, but moves against external surplus; if it is high, local and external surplus co-move, and local surplus is better provided by local monopoly.

Keywords: global competition; monopoly; oligopoly; search (search for similar items in EconPapers)
JEL-codes: D83 L12 L13 L81 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com and nep-mic
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https://www.cesifo.org/DocDL/cesifo1_wp7683.pdf (application/pdf)

Related works:
Working Paper: Local Search Markets and External Competition (2019)
Working Paper: Local Search Markets and External Competition (2019)
Working Paper: Local Search Markets and External Competition (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7683

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