Economics, Econometrics and Finance
5 years ago

Entry of Oligopolistic Firms Raises Wages and Improves Welfare.

2 views
The B E Journal of Theoretical Economics
The Effects of Entry when Monopolistic Competition and Oligopoly Coexist
Kenji Fujiwara

Paper Summary

The article explores how the entry of new companies affects industries with different levels of competition. When oligopolistic firms enter, wages go up, and monopolistically competitive firms may leave. Oligopolistic firms see lower profits, but overall welfare improves if the industries have similar substitution rates.

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