Competition Policy in Chile

32 Pages Posted: 11 Mar 2008

See all articles by Alexander Galetovic

Alexander Galetovic

Universidad Adolfo Ibáñez; Stanford University - The Hoover Institution on War, Revolution and Peace; University of Padua - CRIEP

Date Written: June 2007

Abstract

This paper reviews competition policies in Chile. It argues that competition policy should strive to reduce entry, fixed and variable costs where that is technically feasible; reduce the costs of reallocating resources across firms and sectors; and foster tough price competition. It also shows that reducing concentration is the wrong policy goal because tougher price competition will increase equilibrium concentration, ceteris paribus.

While Chile's competition policies are not bad by international standards, there is considerable room for improvement. The government has ample discretion to affect competitive conditions in markets, many regulations soften price competition, bureaucratic red tape is still widespread, and economic analysis by antitrust authorities is generally of mediocre quality.

Keywords: concentration and price, toughness of price competition, red tape, antitrust

JEL Classification: L11, L40, L50

Suggested Citation

Galetovic, Alexander, Competition Policy in Chile (June 2007). Available at SSRN: https://ssrn.com/abstract=1104007 or http://dx.doi.org/10.2139/ssrn.1104007

Alexander Galetovic (Contact Author)

Universidad Adolfo Ibáñez ( email )

Peñalolén
Santiago
Chile

Stanford University - The Hoover Institution on War, Revolution and Peace ( email )

Stanford, CA 94305-6010
United States

University of Padua - CRIEP ( email )

Padua
Italy

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