Welfare Analysis of Free Entry in a Dynamic General Equilibrium Model
Koichi Futagami (),
Tatsuro Iwaisako () and
Makoto Okamura ()
Additional contact information
Makoto Okamura: Economics Department, Hiroshima University
No 11-20, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics
This paper presents a welfare analysis of free entry equilibrium in dynamic general equilibrium environments with oligopolistic competition. First, we show that a marginal decrease in the number of firms at the free entry equilibrium improves social welfare. Second, we show that if a government can control the number of entrants intertemporally so as to maximize the level of social welfare, the number of entrants under free entry may be less than the second-best number of entrants. Capital accumulation plays an important role in determining whether excess entry occurs.
Keywords: Excess entry; Oligopolistic competition; Dynamic general equilibrium (search for similar items in EconPapers)
JEL-codes: D43 L50 O41 (search for similar items in EconPapers)
Pages: 35 pages
New Economics Papers: this item is included in nep-bec, nep-com and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
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:osk:wpaper:1120
Access Statistics for this paper
More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Yuka Sawazaki ().