When cost improvements harm consumers
Nicolas Gruyer and
Additional contact information
Nicolas Gruyer: LEEA (air transport economics laboratory), ENAC
No 3, Economics Working Papers from LEEA (air transport economics laboratory), ENAC (french national civil aviation school)
This paper demonstrates that in a vertical structure, improving cost efficiency might sometimes be detrimental to consumers, by increasing market price. This is in stark contrast to the standard result in oligopoly theory which suggests that the surplus generated by any efficiency gain in production is shared between firms and final consumers, depending on the degree of market power. These results are applied in contexts such as international trade, diffusion of knowledge and techniques, and government intervention through income support programs.
Keywords: oligopsonists; retail; vertical structure; cost pass-through. (search for similar items in EconPapers)
JEL-codes: L11 L12 (search for similar items in EconPapers)
Pages: 21 pages
New Economics Papers: this item is included in nep-bec and nep-com
Note: Type of Document - pdf; pages: 21.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: When cost improvements harm consumers (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:enc:abcdef:cost3
Access Statistics for this paper
More papers in Economics Working Papers from LEEA (air transport economics laboratory), ENAC (french national civil aviation school) Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).