Local search markets and external competition

Arbeitspapier

Increased competition tends to benefit all buyers with increasing product variety and decreasing prices. However, if local and external market channels compete for the same class of products, increased competition from the external market crowds out local variety. Under local monopoly, local buyer surplus co-moves with external buyer surplus. Under local free entry oligopoly, buyer surplus is U-shaped. If buyer surplus in the external market is low, local surplus is better provided by local oligopoly, but moves against external surplus; if it is high, local and external surplus co-move, and local surplus is better provided by local monopoly.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7683

Classification and Topics

• Classification: Wirtschaft ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Monopoly; Monopolization Strategies ; Oligopoly and Other Imperfect Markets ; Retail and Wholesale Trade; e-Commerce
• Subject: global competition ; monopoly ; oligopoly ; search

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Legros, Patrick ; Stahl, Konrad O.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/201909
• Last update: 10.03.2025, 11:43 AM CET