Does Entry Improve Welfare ? A General Equilibrium Approach of Competition Policy

Bertrand Crettez and Marie-Cecile Fagart
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Bertrand Crettez: Crest

No 2005-08, Working Papers from Center for Research in Economics and Statistics

Abstract: We consider a general equilibrium model under imperfect competition. Firms have constantreturns, they are price taker in the input market and compete à la Cournot in theproduct market. We assume a representative consumer exists. We show that an increase inthe number of firms of a given market does not always improve welfare, challenging thecommon idea according to which mergers with no cost synergy are not desirable for theconsumer.

Pages: 24
Date: 2005
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Related works:
Journal Article: Does entry improve welfare? A general equilibrium approach to competition policy (2009)
Working Paper: Does entry improve welfare? A general equilibrium approach to competition policy (2008)
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