Saturday, May 8, 2010
Posted by D. Daniel Sokol
Tim James and Jolian McHardy (both Department of Economics, University of Sheffield) provide An Elasticity Measure of Welfare Loss in Symmetric Oligopoly.
ABSTRACT: We derive a measure of welfare loss as a proportion of the value of sales under quantity-setting symmetric oligopoly in terms of the equilibrium industry price elasticity of demand, the number of firms in the industry and a conjectural variation term in the context of the standard linear model. This generalises the monopoly measure in James and McHardy (1997).