January 20, 2009
Competition Policy and Market Leaders
Posted by D. Daniel Sokol
ABSTRACT: We study the potential loss in social welfare and changes in incentives to invest in R&D that result when the market leading firm is deprived of its position. We show that under plausible assumptions like free entry or repeated market interactions there is a social value of market leadership and its mechanical removal by means of competition policy is likely to be harmful for society.
January 20, 2009 | Permalink
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