A note on the adverse effect of competition on consumers: adverse effect of competition on consumers
Dinda, Soumyananda; Mukherjee, Arijit
ARIJIT MUKHERJEE Arijit.Mukherjee@nottingham.ac.uk
Professor of Industrial Economics
It is usually believed that higher competition, implying more active firms, benefits consumers. We show that this may not be the case in an industry with asymmetric cost firms. A rise in the number of more cost‐inefficient firms makes the consumers worse off in the presence of a welfare‐maximizing tax/subsidy policy. A rise in the number of more cost‐inefficient firms also reduces social welfare.
|Journal Article Type||Article|
|Journal||Journal of Public Economic Theory|
|Peer Reviewed||Peer Reviewed|
|APA6 Citation||Dinda, S., & Mukherjee, A. (2014). A note on the adverse effect of competition on consumers: adverse effect of competition on consumers. Journal of Public Economic Theory, 16(1), 157-163. doi:10.1111/jpet.12044|
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