Abstract

http://ssrn.com/abstract=1242505
 
 

References (9)



 
 

Citations (1)



 


 



Competition Can Harm Consumers


Simon Cowan


University of Oxford - Department of Economics

Xiangkang Yin


La Trobe University - La Trobe Business School; Financial Research Network (FIRN)


Australian Economic Papers, Vol. 47, Issue 3, pp. 264-271, September 2008

Abstract:     
Duopolists selling differentiated products can generate less consumer surplus than a monopoly selling one of the products. In a Hotelling-type model where a monopoly supplies more than half of potential consumers, but not all, entry by a rival leads to a duopoly price that is higher than the monopoly price. Consumers in aggregate will be made worse off by such entry when the effect of the price increase outweighs the benefit of extra variety. When consumers have continuous demand functions and firms use two-part tariffs, duopoly can also result in lower aggregate consumer surplus than monopoly.

Number of Pages in PDF File: 8

Accepted Paper Series


Date posted: August 22, 2008  

Suggested Citation

Cowan, Simon and Yin, Xiangkang, Competition Can Harm Consumers. Australian Economic Papers, Vol. 47, Issue 3, pp. 264-271, September 2008. Available at SSRN: http://ssrn.com/abstract=1242505 or http://dx.doi.org/10.1111/j.1467-8454.2008.00347.x

Contact Information

Simon G.B. Cowan (Contact Author)
University of Oxford - Department of Economics ( email )
Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom
Xiangkang Yin
La Trobe University - La Trobe Business School ( email )
Melbourne, Victoria 3083
Australia
61-3-9479 1654 (Fax)
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

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