The Welfare Effects of Location and Quality in Oligopoly
نویسندگان
چکیده
In this paper we argue that two important causes of welfare losses in oligopolistic markets have been neglected. We show that in models where location is endogenous, welfare losses arising from wrong locations or from lack of market coverage may be substantial despite firms competing in prices. In contrast, welfare losses arising from quality choice are modest but they might vary discontinuously with the size of the market. JEL classification: D61; L11; L13; L50.
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