Market Structure, Scale Economies and Industry Performance

Rabah Amir ()

No 2000-03, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: We provide an extensive and general investigation of the effects on industry performance (profits and social welfare) of exogenously changing the number of firms in a Cournot framework. This amounts to an in-depth exploration of the well-known trade-off between competition and production efficiency. We establish that under scale economies, welfare is maximized by a finite number of firms. Our results shed light on several theoretical issues and policy debates in industrial organization, including the relationship between the Herfindahl index and social welfare, free versus socially optimal entry, concentration and profitability, destructive competition and natural monopoly. Our analytical approach combines simplicity with generality.

Keywords: Cournot oligopoly; returns to scale; entry; equilibrium comparative statics (search for similar items in EconPapers)
JEL-codes: D43 D60 L13 L40 (search for similar items in EconPapers)
Pages: 30 pages
New Economics Papers: this item is included in nep-eff and nep-mic
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.econ.ku.dk/cie/dp/dp_2000-2002/2000-03.pdf/ (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.econ.ku.dk/cie/dp/dp_2000-2002/2000-03.pdf/ [301 Moved Permanently]--> https://www.econ.ku.dk/cie/dp/dp_2000-2002/2000-03.pdf/)

Related works:
Working Paper: Market structure, scale economies and industry performance (2003)
Working Paper: Market Structure, Scale Economies and Industry Performance (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kud:kuieci:2000-03

Access Statistics for this paper

More papers in CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics �ster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann ().