The State Aid Game

Stephen Martin () and Paola Valbonesi

No 24, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: We present a model of the impact of state aid on equilibrium market structure and on market performance in an integrating market when the process of integration is driven by consumer inertia. In a partial equilibrium model, it is an equilibrium for governments to grant state aid, even though this reduces common market welfare.

Keywords: state aid; exit; market integration (search for similar items in EconPapers)
JEL-codes: F15 L11 L53 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2006-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:pad:wpaper:0024

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