Competition Policy in Chile
32 Pages Posted: 11 Mar 2008
Date Written: June 2007
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: Suggested Citation