Firm size distortions under duopoly
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| Format: | Artículo científico |
| Langue: | en |
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Universidad de Chile
2017
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| _version_ | 1876438096358146048 |
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| author | Miguel González-Maestre |
| author_facet | Miguel González-Maestre |
| contents | Firm size distortions under duopoly Miguel González-Maestre Diego Peñarrubia Economía y Finanzas Duopoly welfare firm size strategic effects Motivated by the fact that some regulations involve extra costs for those firms at a size beyond a critical threshold, this paper contributes to the analysis of the welfare distortions due to these regulations. In the context of a duopoly, our results show that social welfare is not monotonic with the regulatory threshold. In particular, we obtain the paradoxical result that a policy decision of increasing the threshold might involve a dramatic decrease in welfare in some markets. An interesting consequence of this result is that the positive discrimination towards small firms is a rather subtle issue. Our results suggest that the relevant regu - latory thresholds should differ across industries. Apparently, this is taken into account in some countries (e.g., USA), but not in many other countries. 2017 artículo científico 0304-2758 https://www.redalyc.org/articulo.oa?id=22154019002 en http://www.redalyc.org/revista.oa?id=221 Estudios de Economía application/pdf Universidad de Chile Estudios de Economía (Chile) Num.2 Vol.44 |
| format | Artículo científico |
| id | redalyc_22154019002 |
| institution | Redalyc |
| language | en |
| publishDate | 2017 |
| publisher | Universidad de Chile |
| spellingShingle | Firm size distortions under duopoly Miguel González-Maestre Economía y Finanzas Duopoly welfare firm size strategic effects Firm size distortions under duopoly Miguel González-Maestre Diego Peñarrubia Economía y Finanzas Duopoly welfare firm size strategic effects Motivated by the fact that some regulations involve extra costs for those firms at a size beyond a critical threshold, this paper contributes to the analysis of the welfare distortions due to these regulations. In the context of a duopoly, our results show that social welfare is not monotonic with the regulatory threshold. In particular, we obtain the paradoxical result that a policy decision of increasing the threshold might involve a dramatic decrease in welfare in some markets. An interesting consequence of this result is that the positive discrimination towards small firms is a rather subtle issue. Our results suggest that the relevant regu - latory thresholds should differ across industries. Apparently, this is taken into account in some countries (e.g., USA), but not in many other countries. 2017 artículo científico 0304-2758 https://www.redalyc.org/articulo.oa?id=22154019002 en http://www.redalyc.org/revista.oa?id=221 Estudios de Economía application/pdf Universidad de Chile Estudios de Economía (Chile) Num.2 Vol.44 |
| title | Firm size distortions under duopoly |
| topic | Economía y Finanzas Duopoly welfare firm size strategic effects |
| url | https://www.redalyc.org/articulo.oa?id=22154019002 |