1. BERTRAND COMPETITION CAN YIELD HIGHER PRICES THAN MONOPOLY
- Author
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Sanner, Helge
- Subjects
Business ,Business, general ,Business, international ,Economics - Abstract
To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.0307-3378.2007.00259.x Byline: Helge Sanner (*) Keywords: consumer welfare; spatial competition vs monopoly Abstract: ABSTRACT If we take into account the spatial dimension of markets, prices of incumbent firms may be higher and consumer surplus may be lower with competition than with monopoly. This result obtains unambiguously, even in the supposedly highly competitive case of Bertrand competition. Moreover, we are able to show that consumers of the commodity may be worse off with duopoly, if the distance between the firms' sites is sufficiently large. Author Affiliation: (*)Department of Economics and Social Sciences, University of Potsdam, Germany Article note: Correspondence: University of Potsdam, Department of Economics and Social Sciences, August-Bebel-Stra[sz]e 89, 14482 Potsdam, Germany. Tel: +49.331.977-4636; Email: sanner@rz.uni-potsdam.de
- Published
- 2007