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National Oligopolies and Economic Geography

Barbara Annicchiarico (), Federica Orioli () and Federico Trionfetti
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Federica Orioli: LUISS - Libera Università Internazionale degli Studi Sociali Guido Carli [Roma]

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Abstract: We replace monopolistic competition with national oligopolies in a model of "new economic geography". There are many possible bifurcation diagrams but, unlike in monopolistic competition, the symmetric equilibrium is always stable for low trade costs. The antitrust policy, though identical in both countries, affects the geographical distribution of firms. In turn, migration attenuates the effectiveness of the antitrust policy in eliminating collusive behavior. For high trade costs a toughening of the antitrust policy is likely to result in more agglomeration and may reduce world welfare. The antitrust policy is more likely to be welfare improving when market integration progresses.

Keywords: Spatial Oligopoly; Antitrust Policy; Welfare (search for similar items in EconPapers)
Date: 2011-07-10
New Economics Papers: this item is included in nep-com, nep-geo, nep-ind, nep-reg and nep-ure
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Journal Article: National oligopolies and economic geography (2012) Downloads
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