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dc.contributor.authorRitz, Roberten
dc.date.accessioned2016-04-22T15:01:15Z
dc.date.available2016-04-22T15:01:15Z
dc.date.issued2013-10-07en
dc.identifier.otherCWPE1334
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/255257
dc.description.abstractCorporate managers and executive compensation in many industries place significant emphasis on measures of firm size, such as sales revenue or market share. Such objectives have an important yet thus far unquantified impact on market performance. With n symmetric firms, equilibrium welfare losses are of order 1/n4, and thus vanish extremely quickly. Welfare losses are less than 5% for many empirically relevant market structures, despite significant firm asymmetry and industry concentration. They can be estimated using only basic information on market shares. These results also apply to oligopsonistic competition (e.g., for retail bank deposits) and strategic forward trading (e.g., in restructured electricity markets). Forthcoming in Journal of Industrial Economics.en
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.subjectmanagerial incentivesen
dc.subjectmarket structureen
dc.subjectwelfare losses.en
dc.titleOn welfare losses due to imperfect competitionen
dc.typeWorking Paperen
dc.identifier.doi10.17863/CAM.5738


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