Efficient Horizontal Mergers in Polluting Industries with Cournot Competition

Arbeitspapier

We compare a Bertrand with a Cournot duopoly in a setting where production is polluting and exploits natural resources, and firms bear convex production costs. We adopt Dastidar's (1995) approach, yielding a continuum of Bertrand-Nash equilibria ranging above marginal cost pricing also, to show that softening price competition may lead to a lower output production in a Bertrand rather than a Cournot industry. The market structure bringing about the lowest output determines the highest social welfare, given the fact that the negative environmental effects of production more than offset the gain in consumer surplus.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Quaderni - Working Paper DSE ; No. 813

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Monopolization; Horizontal Anticompetitive Practices ; Valuation of Environmental Effects

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lambertini, Luca ; Tampieri, Alessandro
• Event: Veröffentlichung
• (who): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (where): Bologna
• (when): 2012

Further information

• DOI: doi:10.6092/unibo/amsacta/4205
• Handle: http://hdl.handle.net/10419/159652
• Last update: 10.03.2025, 11:42 AM CET