The contribution of general equilibrium models to the evaluation of competition policy.

Authors
  • MARTIN Helene
  • CRETTEZ Bertrand
  • HALMENSCHLAGER Christine
  • DELOCHE Regis
  • JULIEN Ludovic
Publication date
2013
Publication type
Thesis
Summary The purpose of this thesis is to analyze how competition policy can be used to improve purchasing power by generating price decreases and affecting income distribution. The evaluation of the welfare consequences of the entry of new competitors on a market has been the subject of a large literature. But it is based on partial equilibrium analyses and a complementary approach in terms of general equilibrium may be useful. Other analyses of competition policy in general equilibrium terms have been carried out for economies with increasing returns to scale, but since it seems questionable whether sectors with increasing returns to scale are the majority in real economies, it seems relevant to analyze the effects of entry in "convex" economies. We thus use simple general equilibrium models to study the consequences of competition policy - in terms of entry, mergers, etc. - on welfare. - on welfare. In order to analyze its distributional effects, we consider economies composed of agents that differ in the nature of the factors they offer. In particular, we assume that one of them provides an exogenous quantity of labor, which we then endogenize. We thus show that competition policy can be conflicting: it may not impact all consumers in the same way and may benefit some to the detriment of others.
Topics of the publication
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