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Working paper

Competition can harm consumers

Abstract:

Duopolists selling differentiated products can generate less consumer surplus than a monopoly selling one of the products. In a Hotelling 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 fir...

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Publication status:
Not Published
Peer review status:
Not peer reviewed
Version:
Author's Original

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Institution:
University of Oxford
Oxford college:
Worcester College
Department:
Social Sciences Division - Economics
Role:
Author
More by this author
Institution:
La Trobe University, Victoria, Australia
Department:
Department of Economics and Finance
Role:
Author
Publication date:
2006-01-01
URN:
uuid:5906947d-620c-4e46-84a9-9210aed3ff43
Local pid:
ora:1669

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